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The following is an excerpt from a 10-K SEC Filing, filed by UNITED DOMINION REALTY TRUST INC on 3/15/2001.
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UDR, INC. - 10-K - 20010315 - SIGNATURES

SIGNATURES

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

United Dominion Realty Trust, Inc.

(registrant)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 9, 2001 by the following persons on behalf of the registrant and in the capacities indicated.

/s/ John P. McCann                      /s/ Robert C. Larson
----------------------------------      ------------------------------------
John P. McCann                          Robert C. Larson
Chairman of the Board                   Director


/s/ Thomas W. Toomey                    /s/ Lynne B. Sagalyn
----------------------------------      ------------------------------------
Thomas W. Toomey                        Lynne B. Sagalyn
President and Chief Executive           Director
  Officer


                                        /s/ Mark J. Sandler
----------------------------------      ------------------------------------
John S. Schneider                       Mark J. Sandler
Senior Executive Vice President         Director
  and Chief Operating Officer


                                        /s/ Robert W. Scharar
----------------------------------      ------------------------------------
R. Toms Dalton                          Robert W. Scharar
Director                                Director


/s/ Robert P. Freeman                   /s/ A. William Hamill
----------------------------------      ------------------------------------
Robert P. Freeman                       A. William Hamill
Director                                Executive Vice President and
                                          Chief Financial Officer


                                        /s/ Scott A. Shanaberger
----------------------------------      ------------------------------------
Jon A. Grove                            Scott A. Shanaberger
Director                                Vice President, Corporate Controller
                                          and Chief Accounting Officer

/s/ James D. Klingbeil
----------------------------------
James D. Klingbeil
Director

43

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

UNITED DOMINION REALTY TRUST, INC.

                                                                Page
                                                                ----
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT

Report of Ernst & Young LLP, Independent Auditors                45

Consolidated Balance Sheets at December 31, 2000
and 1999                                                         46

Consolidated Statements of Operations for each of
the three years in the period ended December 31, 2000            47

Consolidated Statements of Cash Flows for each of
the three years in the period ended December 31, 2000            48

Consolidated Statements of Shareholders' Equity for
each of the three years in the period ended December 31, 2000    49

Notes to Consolidated Financial Statements                       50

SCHEDULE FILED AS PART OF THIS REPORT

Schedule III - Summary of Real Estate Owned                      66

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 Auditors

The Board of Directors and Shareholders
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, 2000 and 1999, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2000. Our audits also included the financial statement schedule listed in the Index at Item 14(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 auditing standards generally accepted in the 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, 2000 and 1999, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects, the information set forth therein.

Ernst & Young LLP

Richmond, Virginia
January 31, 2001

45

UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)

December 31,                                                                                   2000                      1999
------------------------------------------------------------------------------------------------------------------------------------
ASSETS

Real estate owned:
    Real estate held for investment (Note 2)                                         $          3,758,974      $          3,577,848
         Less: accumulated depreciation                                                          (506,871)                 (373,164)
                                                                                         ----------------          ----------------
                                                                                                3,252,103                 3,204,684
    Real estate under development                                                                  60,366                    91,914
    Real estate held for disposition (net of accumulated depreciation of $2,534
    and $22,700) (Note 2)                                                                          14,446                   260,583
                                                                                         ----------------          ----------------
    Total real estate owned, net of accumulated depreciation                                    3,326,915                 3,557,181
Cash and cash equivalents                                                                          10,305                     7,678
Restricted cash                                                                                    44,943                    56,969
Deferred financing costs                                                                           14,271                    13,511
Investment in unconsolidated development joint venture (Note 3)                                     8,088                         -
Other assets                                                                                       49,435                    52,978
                                                                                         ----------------          ----------------
    Total assets                                                                     $          3,453,957      $          3,688,317
                                                                                         ================          ================

LIABILITIES AND SHAREHOLDERS' EQUITY

Secured debt (Note 4)                                                                $            866,115      $          1,000,136
Unsecured debt (Note 5)                                                                         1,126,215                 1,127,169
Real estate taxes payable                                                                          30,554                    30,887
Accrued interest payable                                                                           18,059                    17,867
Security deposits and prepaid rent                                                                 22,524                    20,738
Distributions payable                                                                              36,128                    36,020
Accounts payable, accrued expenses and other liabilities                                           47,144                    51,121
                                                                                         ----------------          ----------------
    Total liabilities                                                                           2,146,739                 2,283,938

Minority interests                                                                                 88,326                    94,167

Shareholders' equity: (Note 8)
    Preferred stock, no par value; $25 liquidation preference,
      25,000,000 shares authorized;
         3,969,120 shares 9.25% Series A Cumulative Redeemable issued and
            outstanding (4,168,560 in 1999)                                                        99,228                   104,214
         5,439,109 shares 8.60% Series B Cumulative Redeemable issued and
            outstanding (5,946,300 in 1999)                                                       135,978                   148,658
         8,000,000 shares 7.50% Series D Cumulative Convertible Redeemable issued
            and outstanding (8,000,000 in 1999)                                                   175,000                   175,000
    Common stock, $1 par value; 150,000,000 shares authorized
         102,219,250 shares issued and outstanding (102,740,777 in 1999)                          102,219                   102,741
    Additional paid-in capital                                                                  1,081,387                 1,083,687
    Distributions in excess of net income                                                        (366,531)                 (296,030)
    Notes receivable from officer-shareholders                                                     (7,561)                   (7,753)
    Deferred compensation - unearned restricted stock awards                                         (828)                     (305)
                                                                                         ----------------          ----------------
    Total shareholders' equity                                                                  1,218,892                 1,310,212
                                                                                         ----------------          ----------------
    Total liabilities and shareholders' equity                                       $          3,453,957      $          3,688,317
                                                                                         ================          ================

See accompanying notes to consolidated financial statements.

46

UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Year ended December 31,                                                           2000              1999             1998
-------------------------------------------------------------------------------------------------------------------------------
Revenues
    Rental income                                                                  $616,825          $618,749         $478,718
    Non-property income                                                               5,326             1,942            3,382
                                                                              --------------    --------------   --------------
          Total revenues                                                            622,151           620,691          482,100

Expenses
    Rental expenses:
          Real estate taxes and insurance                                            69,071            63,425           48,898
          Personnel                                                                  65,666            66,968           51,219
          Repair and maintenance                                                     36,469            41,339           36,827
          Utilities                                                                  25,791            30,106           26,361
          Administrative and marketing                                               23,771            25,410           19,066
          Property management                                                        18,392            18,475           16,945
          Other operating expenses                                                    1,426             1,539              244
    Real estate depreciation                                                        152,994           121,727           99,588
    Interest                                                                        156,040           153,748          106,238
    Impairment loss on real estate and investments (Note 2)                               -            19,300                -
    General and administrative                                                       19,444            13,850           10,139
    Other depreciation and amortization                                               4,367             4,425            3,645
    Loss on termination of interest rate risk management agreement (Note 6)               -                 -           15,591
                                                                              --------------    --------------   --------------
          Total expenses                                                            573,431           560,312          434,761
                                                                              --------------    --------------   --------------

Income before gains on sales of investments, minority interests
    and extraordinary item                                                           48,720            60,379           47,339
Gains on sales of depreciable property                                               30,618            37,995           26,672
Gains on sales of land                                                                  832                 -                -
                                                                              --------------    --------------   --------------
Income before minority interests and extraordinary item                              80,170            98,374           74,011
Minority interests of unitholders in operating partnership                           (2,885)           (4,434)          (1,430)
Minority interests in other partnerships                                             (1,501)           (1,245)            (111)
                                                                              --------------    --------------   --------------
Income before extraordinary item                                                     75,784            92,695           72,470
Extraordinary item - early extinguishment of debt                                       831               927             (138)
                                                                              --------------    --------------   --------------
Net income                                                                           76,615            93,622           72,332
Distributions to preferred shareholders - Series A and B                            (21,591)          (22,560)         (22,607)
Distributions to preferred shareholders - Series D (Convertible)                    (15,300)          (15,154)            (986)
Discount on preferred share repurchases                                               2,929                 -                -
                                                                              --------------    --------------   --------------
Net income available to common shareholders                                         $42,653           $55,908          $48,739
                                                                              ==============    ==============   ==============



Earnings per common share: (Note 1)

    Basic                                                                             $0.41             $0.54            $0.49
                                                                              ==============    ==============   ==============
    Diluted                                                                           $0.41             $0.54            $0.49
                                                                              ==============    ==============   ==============

Common distributions declared per share                                               $1.07             $1.06            $1.05
                                                                              ==============    ==============   ==============


Weighted average number of common shares outstanding-basic                          103,072           103,604           99,966
Weighted average number of common shares outstanding-diluted                        103,208           103,639          100,062

See accompanying notes to consolidated financial statements.

47

UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Year ended December 31,                                                             2000              1999                 1998
-----------------------------------------------------------------------------------------------------------------------------------
Operating Activities
   Net income                                                              $         76,615     $      93,622       $       72,332
   Adjustments to reconcile net income to cash provided
        by operating activities:
         Depreciation and amortization                                              157,361           126,152              103,233
         Impairment loss on real estate and investments                                   -            19,300                   --
         Gains on sales of investments                                              (31,450)          (37,995)             (26,672)
         Minority interests                                                           4,386             5,679                1,541
         Extraordinary item-early extinguishment of debt                               (831)             (927)                 138
         Amortization of deferred financing costs and other                           2,551             5,184                2,061
         Changes in operating assets and liabilities:
              (Decrease)/increase in operating liabilities                           (2,333)           (4,777)              30,682
              Decrease/(Increase) in operating assets                                17,861           (15,636)             (42,718)
                                                                              -------------      ------------        -------------
Net cash provided by operating activities                                           224,160           190,602              140,597

Investing Activities
   Proceeds from sales of real estate investments, net                              205,345           236,706              155,459
   Proceeds received for excess expenditures over investment contribution
     in development joint venture                                                    30,176                 -                    -
   Development of real estate assets                                                (80,131)         (114,028)             (97,222)
   Capital expenditures - real estate assets, net of escrow reimbursement           (45,796)          (74,049)             (88,120)
   Acquisition of real estate assets, net of liabilities assumed                     (4,635)          (75,719)            (169,808)
   Capital expenditures - non-real estate assets                                     (1,166)           (8,062)              (2,876)
   Net cash paid in mergers                                                               -                 -              (59,446)
   Other investing activities                                                             -             1,132               (1,851)
                                                                              -------------      ------------        -------------
Net cash provided by/(used in) investing activities                                 103,793           (34,020)            (263,864)

Financing Activities
   Proceeds from the issuance of secured notes payable                               67,285           207,611                7,700
   Scheduled principal payments on secured notes payable                            (62,575)          (19,100)             (18,255)
   Non-scheduled principal payments on secured notes payable                       (145,881)         (260,559)             (88,237)
   Proceeds from the issuance of unsecured notes payable                            248,035           197,345              212,500
   Payments on unsecured notes payable                                             (214,984)         (151,117)              (9,418)
   Net (repayment)/borrowing of short-term bank debt                                (33,200)           37,600              104,400
   Payment of financing costs                                                        (5,648)           (6,719)              (4,875)
   Proceeds from the issuance of common stock                                         7,660            17,250               76,686
   Distributions paid to minority interests                                         (10,272)           (9,200)              (2,413)
   Distributions paid to preferred shareholders                                     (36,909)          (34,958)             (22,611)
   Distributions paid to common shareholders                                       (110,098)         (109,608)            (103,074)
   Repurchase of operating partnership units                                           (341)          (11,967)              (3,528)
   Repurchase of common and preferred stock                                         (28,398)          (31,563)                   -
                                                                              -------------      ------------        -------------
Net cash (used in)/provided by financing activities                                (325,326)         (174,985)             148,875

Net increase (decrease) in cash and cash equivalents                                  2,627           (18,403)              25,608
Cash and cash equivalents, beginning of year                                          7,678            26,081                  473
                                                                              -------------      ------------        -------------
Cash and cash equivalents, end of year                                       $       10,305     $       7,678       $       26,081
                                                                              =============      ============        =============

Supplemental Information:
   Interest paid during the period                                         $        152,434     $     162,236       $      104,858
   Conversion of operating partnership units to common stock                            247             3,947                7,542
   Issuance of restricted stock awards                                                  830               460                    -
   Non-cash transactions associated with the acquisition of properties:
         Secured debt assumed                                                        10,130                 -              116,326
         Issuance of common stock                                                         -                 -                7,099
         Issuance of operating partnership units                                          -                 -               18,477
   Non-cash transactions associated with mergers:
         Real estate assets acquired                                                      -                 -            1,080,696
         Other operating assets acquired                                                  -                 -               26,845
         Issuance of preferred stock                                                      -                 -              175,000
         Issuance of common stock                                                         -                 -              108,456
         Issuance of operating partnership units                                          -                 -               88,831
         Secured debt assumed                                                             -                 -              637,188
         Operating liabilities assumed                                                    -                 -               36,026
         Minority interests in partnerships assumed                                       -                 -                5,382

See accompanying notes to consolidated financial statements.

48

UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except per share data)

Year ended December 31                                                                 2000               1999            1998
------------------------------------------------------------------------------------------------------------------------------------
Preferred Stock
Balance, beginning of year                                                           $   427,872      $   430,000     $   255,000
    Issuance of 7.50% Series D Cumulative Convertible Redeemable
       in connection with the acquisition of American Apartment Communities II                -                -          175,000
    Purchase of preferred stock                                                          (17,666)          (2,128)             -
                                                                                   --------------   --------------   -------------
Balance, end of year                                                                 $   410,206      $   427,872     $   430,000
                                                                                   ==============   ==============   =============

Common Stock, $1 Par Value
Balance, beginning of year                                                             $ 102,741        $ 103,639     $    89,168
    Issuance of common shares in public offerings                                             -                -            2,804
    Issuance of common shares in the acquisition of ASR Investment Corporation                -                -            7,743
    Issuance of common shares to employees, officers and director-shareholders                 5               72              78
    Issuance of common shares through dividend reinvestment
       and stock purchase plan                                                               767            1,598           2,825
    Issuance of common shares in connection with the acquisition of properties                -                -              482
    Purchase of common stock                                                              (1,399)          (2,688)             -
    Issuance of restricted stock awards                                                       86               46              -
    Adjustment for cash purchase and conversion of minority interests of
       unitholders in operating partnerships                                                  19               74             539
                                                                                   --------------   --------------   -------------
Balance, end of year                                                                 $   102,219      $   102,741     $   103,639
                                                                                   ==============   ==============   =============

Additional Paid-in Capital
Balance, beginning of year                                                           $ 1,083,687      $ 1,090,432     $   906,307
    Issuance of common shares in public offerings, net of issuance costs                      -                -           35,170
    Issuance of common shares in the acquisition of ASR Investment Corporation                -                -          100,713
    Issuance of common shares to employees, officers and director-shareholders               158              665             801
    Issuance of common shares through dividend reinvestment
       and stock purchase plan                                                             6,538           15,049          33,821
    Issuance of common shares in connection with the acquisition of properties                -                -            6,617
    Purchase of common and preferred stock                                                (9,333)         (26,746)             -
    Issuance of restricted stock awards                                                      744              414              -
    Adjustment for cash purchase and conversion of minority interests of
       unitholders in operating partnerships                                                (407)           3,873           7,003
                                                                                   --------------   --------------   -------------
Balance, end of year                                                                 $ 1,081,387      $ 1,083,687     $ 1,090,432
                                                                                   ==============   ==============   =============

Notes Receivable from Officer-Shareholders
Balance, beginning of year                                                           $    (7,753)     $    (7,619)    $    (8,806)
    Principal repayments                                                                     192              139           1,413
    Notes issued for common shares                                                            -              (273)           (226)
                                                                                   --------------   --------------   -------------
Balance, end of year                                                                 $    (7,561)     $    (7,753)    $    (7,619)
                                                                                   ==============   ==============   =============

Distributions in Excess of Net Income
Balance, beginning of year                                                           $  (296,030)     $  (242,331)    $  (183,312)
    Net income                                                                            76,615           93,622          72,332
    Common stock distributions declared ($1.07 per share for 2000,
       $1.06 per share for 1999 and $1.05 per share for 1998)                           (110,225)        (109,607)       (107,758)
    Preferred stock distributions declared-Series A ($2.31 per share for 2000,
       1999 and 1998)                                                                     (9,473)          (9,688)         (9,704)
    Preferred stock distributions declared-Series B ($2.15 per share for 2000,
       1999 and 1998)                                                                    (12,118)         (12,872)        (12,903)
    Preferred stock distributions declared-Series D ($1.91 per share for 2000,
       $1.89 per share for 1999 and $.12 per share for 1998)                             (15,300)         (15,154)           (986)
                                                                                   --------------   --------------   -------------
Balance, end of year                                                                 $  (366,531)     $  (296,030)    $  (242,331)
                                                                                   ==============   ==============   =============

Deferred Compensation - Unearned Restricted Stock Awards
Balance, beginning of year                                                           $      (305)     $        -      $        -
    Issuance of restricted stock awards                                                     (830)            (460)             -
    Amortization of deferred compensation                                                    307              155              -
                                                                                   --------------   --------------   -------------
Balance, end of year                                                                 $      (828)     $      (305)    $        -
                                                                                   ==============   ==============   =============

Total Shareholders' Equity                                                           $ 1,218,892      $ 1,310,212     $ 1,374,121
                                                                                   ==============   ==============   =============

See accompanying notes to consolidated financial statements.

49

UNITED DOMINION REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Formation United Dominion Realty Trust, Inc., a Virginia corporation, was formed in 1972. United Dominion operates within one defined business segment with activities related to the ownership, development, acquisition, renovation, management, marketing and strategic disposition of multifamily apartment communities nationwide. At December 31, 2000, United Dominion owned 277 communities with 77,219 completed apartment homes and had two communities and three additional phases to existing communities with 1,238 apartment homes under development.

Basis of presentation The accompanying consolidated financial statements include the accounts of United Dominion and its subsidiaries, including United Dominion Realty, L.P., (the "Operating Partnership"), and Heritage Communities L.P. (the "Heritage OP"), (collectively, "United Dominion"). As of December 31, 2000, there were 74,486,812 units in the Operating Partnership outstanding, of which 67,686,662 units or 90.9% were owned by United Dominion and 6,800,150 units or 9.1% were owned by non-affiliated limited partners. As of December 31, 2000, there were 4,535,845 units in the Heritage OP outstanding, of which 3,879,880 units or 85.5% were owned by United Dominion and 655,965 units or 14.5% were owned by non-affiliated limited partners. The consolidated financial statements of United Dominion include the minority interests of the unitholders in the operating partnerships. All significant inter-company accounts and transactions have been eliminated in consolidation.

Income taxes United Dominion 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 distributes at least 95% of its taxable income and will avoid and will not be subject to U.S. federal income taxes if it distributes 100% of its income. Accordingly, no provision has been made for federal income taxes. However, United Dominion is subject to certain state and local excise or franchise taxes.

The differences between net income available to common shareholders 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 temporary 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.

For income tax purposes, distributions paid to common shareholders consist of ordinary income, capital gains, return of capital or a combination thereof. For the three years ended December 31, 2000, distributions paid per common share were taxable as follows:

                             2000      1999      1998
                            ------    ------    ------
Ordinary income             $ .811    $ .620    $ .913
Long-term capital gain        .257      .129       ---
Return of capital              ---      .309      .127
                            ------    ------    ------
                            $1.068    $1.058    $1.040
                            ======    ======    ======

Use of estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications Certain reclassifications have been made to amounts in prior years' financial statements to conform with current year presentation.

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

Investments in Unconsolidated Joint Ventures The Company accounts for investments in unconsolidated joint ventures using the equity method when major business decisions require approval by the other partners. Investments are recorded at cost and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. United Dominion eliminates intercompany profits on sales of services that are capitalized by the venture. Differences between the carrying value of investments and the underlying equity in net assets of the

50

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

investee are due to capitalized interest on the investment balance and capitalized development and leasing costs that are recovered by the Company through fees during construction. Such differences are amortized on a straight- line basis over the estimated useful life of the investment. During 2000, United Dominion recognized development and general contractor fees from its venture of approximately $3.0 million.

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. Significant expenditures for improvements, renovations and replacements related to the acquisition and improvement of real estate assets are capitalized at cost and depreciated over their estimated useful lives.

United Dominion 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. 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.

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. Prior to 2000, properties were classified as real estate held for disposition when management had committed to sell and was actively marketing the property, and United Dominion expected to dispose of these properties within the next twelve months. Beginning in 2000, properties classified as real estate held for disposition represent properties that are under contract. 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. Depreciation is not recorded on real estate held for disposition and gains (losses) from initial and subsequent adjustments to the carrying value of the assets, if any, are recorded as a separate component of income from continuing operations.

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 20 years for furniture, fixtures, equipment and other assets.

All development projects and related carrying costs are capitalized and reported on the balance sheet as "real estate under development" until such time as the development project is completed. Upon completion, the total cost of the building and associated land 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 and real estate taxes incurred during the development period 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 2000, 1999 and 1998, total interest capitalized was $3.6 million, $5.2 million and $3.4 million, respectively.

Revenue recognition United Dominion's apartment homes are leased under operating leases with terms generally of one year or less. Rental income is recognized after it is earned and collectibility is reasonably assured.

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.

Advertising costs All costs are expensed as incurred.

51

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

Interest rate swap agreements United Dominion enters into interest rate swap agreements to alter the interest rate characteristics of outstanding debt instruments. Each interest rate swap agreement is designated with all or a portion of the principal balance and term of a specific debt obligation. The interest rate swaps involve the periodic exchange of payments over the life of the related agreements. Amounts received or paid on the interest rate swaps are recorded on an accrual basis as an adjustment to the related interest expense of the outstanding debt based on the accrual method of accounting. The related amounts payable to and receivable from counterparties are included in other liabilities and other assets, respectively. The fair value of and changes in the fair value as a result of changes in market interest rates for the interest rate swap agreements are not reflected in the basic financial statements.

Gains and losses on terminations of interest rate swap agreements are deferred as an adjustment to the carrying amount of the outstanding debt and amortized into interest expense over the remaining term of the original contract life of the terminated swap agreement. In the event of early extinguishment of a designated debt obligation, any realized or unrealized gain or loss from the swap would be recognized in income coincident with the extinguishment gain or loss. There were no gains or losses on terminations of interest rate swap agreements recognized by United Dominion for the periods presented.

Any interest rate swap agreements that are not designated with outstanding debt or notional amounts of interest rate swap agreements in excess of the original amounts of the underlying debt obligations are recorded as an asset or liability at fair value, with the changes in the fair value recorded in other income or expense (fair value method).

Interest rate risk management agreements United Dominion enters into interest rate futures contracts to hedge interest rate risk associated with anticipated debt transactions. United Dominion follows SFAS No. 80, "Accounting for Futures Contracts," which permits hedge accounting for anticipatory transactions meeting certain criteria. Gains and losses, if any, on these transactions are deferred as an adjustment to the carrying amount of the outstanding debt and amortized over the term of the related debt as an adjustment to interest expense. The fair values of interest rate risk management agreements are not recognized in the financial statements. At the time the anticipated transaction is no longer likely to occur, United Dominion would record the derivative instrument at its market value and would recognize any adjustment in the consolidated statement of operations.

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 on common 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 United Dominion's average stock price. The early extinguishment of debt does not have an effect on the earnings per share calculation for the periods presented. The following table sets forth the computation of basic and diluted earning per share (dollars in thousands, except per share amounts):

                                                  2000      1999      1998
----------------------------------------------------------------------------
Numerator for basic and diluted earnings
 per share-net income available to common
 shareholders                                   $ 42,653  $ 55,908  $ 48,739

Denominator:
 Denominator for basic earnings per share-
  weighted average shares                        103,072   103,604    99,966


Effect of dilutive securities:
  Employee stock options and awards                  136        35        96
                                                --------  --------  --------

Denominator for dilutive earnings per
 share                                           103,208   103,639   100,062
                                                ========  ========  ========

Basic earnings per share                        $    .41  $    .54  $    .49
                                                ========  ========  ========
Diluted earnings per share                      $    .41  $    .54  $    .49
                                                ========  ========  ========

52

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

The effect of the conversion of the operating partnership units and convertible preferred stock is not dilutive and is therefore not included as a dilutive security in the earnings per share computation. The weighted average effect of the conversion of the operating partnership units for the years ended December 31, 2000, 1999 and 1998 was 7,489,435 units, 8,180,409 units and 2,963,427 units, respectively. The weighted average effect of the conversion of the convertible preferred stock for the years ended December 31, 2000 and 1999 was 12,307,692 shares and 809,273 shares at December 31, 1998.

Minority interests 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 shareholders 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 United Dominion's common stock on a one-for-one basis, at the option of United Dominion. OP Units as a percentage of total OP Units and shares outstanding were 6.8% at December 31, 2000 and 1999 and 7.7% at December 31, 1998.

Minority interest in other partnerships United Dominion has limited partners in certain real estate partnerships acquired as part of the acquisition of American Apartment Communities II on December 7, 1998. Net income for these partnerships is allocated based on the percentage interest owned by these limited partners in each respective real estate partnership.

Stock based compensation United Dominion has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") in accounting for its employee stock options because the alternative fair value accounting provided for under SFAS No. 123, "Accounting for Stock Based Compensation," requires the use of option valuation models that were not developed for use in valuing employee stock options. Under APB 25, because the exercise price of United Dominion's employee stock options equals the market price of the underlying stock on the date of grant, no compensation cost has been recognized.

Impact of recently issued accounting standards United Dominion will adopt Statements of Financial Accounting Standards No. 133 and 138, "Accounting for Derivative Instruments and Hedging Activities" on January 1, 2001. The new accounting standards require companies to carry all derivative instruments, including certain embedded derivatives, in the consolidated balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, on the reason for holding it. If certain conditions are met, companies might elect to designate a derivative instrument as a hedge of exposures to changes in fair values or cash flows. If the hedged exposure is a cash flow exposure, the effective portion of the gain or loss on the derivative instrument is reported as a component of equity and reclassified into earnings when the hedged transaction affects earnings. If the hedged exposure is a fair value exposure, the gain or loss on the derivative is recognized in earnings in the period of change together with the offsetting loss or gain on the hedged item attributable to the risk being hedged. A gain or loss is recognized in earnings when a derivative is not designated as a hedge, or when any ineffectiveness is measured in the derivative when compared to the hedged item or anticipated transaction.

United Dominion estimates that upon adoption of Statements 133 and 138 in January 2001, the Company will record a $3.8 million net transition loss adjustment in accumulated other comprehensive income (equity). Adoption of the standards also will result in the Company recognizing $134.0 thousand of derivative instrument assets and $3.9 million of derivative instrument liabilities. In general, the amount of volatility will vary with the level of derivative activities during any period.

53

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

2. REAL ESTATE OWNED

United Dominion operates in over 32 major markets dispersed throughout 21 states. At December 31, 2000, the Company's largest apartment market was Houston, Texas, where it owned 5.9% of its apartment homes, based upon carrying value. Excluding Houston, United Dominion did not own more than 5.5% 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):

                                                      2000               1999
-----------------------------------------------------------------------------
Land and land improvements                      $  668,003         $  636,905
Buildings and improvements                       2,902,386          2,767,940
Furniture, fixtures and equipment                  188,321            166,826
Construction in progress                               264              6,177
                                               ------------------------------
Real estate held for investment                  3,758,974          3,577,848
Accumulated depreciation                          (506,871)          (373,164)
                                               ------------------------------
Real estate held for investment, net            $3,252,103         $3,204,684
                                               ==============================

The following is a summary of real estate held for investment by major market within each geographic region (in order of carrying value and excluding real estate under development) at December 31, 2000 (dollars in thousands):

                                             Initial
                              Number of    Acquisition          Carrying         Accumulated
                             Communities      Cost               Value          Depreciation         Encumbrances
-----------------------------------------------------------------------------------------------------------------
NORTHERN REGION:
Raleigh, NC                      9       $  123,071          $  140,725             $ 28,793             $ 31,327
Charlotte, NC                   10          109,961             133,652               24,942               12,267
Columbus, OH                     5           88,625             122,281               10,049               42,703
Greensboro, NC                   8           85,362             102,574               14,917                    -
Richmond, VA                     8           74,856              94,633               25,219               60,682  (a)
Wilmington, NC                   6           64,213              88,200               15,540                    -
Baltimore, MD                    6           58,846              66,380               14,752               28,657  (a)
Other Northern Markets          38          318,407             366,179               63,506               56,194  (a)

SOUTHERN REGION:
Orlando, FL                     14          167,524             198,761               32,513               76,736  (a)
Tampa, FL                       10          132,927             149,907               21,859               51,665  (a)
Nashville, TN                    8           83,987             117,978               13,012                    -
South Florida                    6           95,637             103,335               13,588               20,620  (a)
Memphis, TN                      6           88,467              95,752               11,727               32,724
Atlanta, GA                      6           57,669              69,964               13,307               17,714  (a)
Columbia, SC                     6           52,795              61,472               14,942                5,000
Other Southern Markets          16          168,885             220,993               35,955               43,696  (a)

54

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

                                             Initial
                              Number of    Acquisition          Carrying         Accumulated
                             Communities      Cost               Value          Depreciation         Encumbrances
-----------------------------------------------------------------------------------------------------------------
WESTERN REGION:
Houston, TX                     22           178,188             222,164           24,255                47,499
Dallas, TX                      14           177,414             208,238           23,930                10,349
Phoenix, AZ                     10           165,191             199,500           21,104                19,086
San Antonio, TX                 12           171,241             187,470           18,166                37,627
Fort Worth, TX                  11           134,671             145,046           17,511                18,711
San Francisco, CA                4           136,504             139,462            6,855                21,709
Monterey Peninsula, CA          11           102,442             104,041            5,574                     -  (a)
Southern California              5            87,442              89,863            6,752                 5,937
Seattle, WA                      3            31,953              33,473            2,694                16,661
Other Western Markets           22           279,699             290,068           25,376                66,178  (a)

Richmond - Corporate                           6,597               6,863               33                     -
                             ----------------------------------------------------------------------------------
                               276        $3,242,574          $3,758,974         $506,871              $859,285
                             ==================================================================================

The following is a summary of real estate held for disposition by major category at December 31, 2000 (dollars in thousands):

                             Initial
                 Number of  Acquisition   Carrying    Accumulated
                Properties     Cost         Value     Depreciation  Encumbrances
--------------------------------------------------------------------------------
 Apartments (b)        1     $    3,817   $    4,696      $  1,036      $  3,506
 Commercial (b)        4         10,482       12,284         1,498         3,324
                   -------------------------------------------------------------
                       5     $   14,299   $   16,980      $  2,534      $  6,830
                   =============================================================
 Total               281     $3,256,873   $3,775,954      $509,405      $866,115
                   =============================================================

(a) There are 88 communities encumbered by fixed rate debt aggregating $723.7 million. The amount of this debt is included in the encumbrances shown for the individual markets. There are 27 communities encumbered by fixed rate debt aggregating $135.5 million that is not included in the encumbrances shown for the individual markets or in real estate held for disposition.

(b) Real estate held for disposition included one apartment community with 132 homes, three commercial properties and one parcel of land totaling $14.5 million, which is net of $2.5 million of accumulated depreciation. Real estate held for disposition contributed property operating income (property rental income less property operating expense) of $1.7 million for the year ended December 31, 2000. The properties classified as held for disposition reflect properties that were under contract at December 31, 2000.

The management of United Dominion periodically reviews its divestiture program, which is designed to better position the Company for achieving more consistent earnings growth and increasing shareholder value over the long-term. The factors considered in these reviews include the age, quality and projected operating income of communities that might be sold, the expected market value for the communities, the estimated timing for completion of sales and the pro forma effect of sales upon United Dominion's earnings and financial position. After a review undertaken in the second quarter of 2000, management transferred approximately $197 million of assets from real estate held for disposition to real estate held for investment and, as a result, approximately $10 million in depreciation expense was recognized on the communities transferred in order to reflect depreciation on these properties while they were classified in real estate held for disposition.

For the year ended December 31, 1999, United Dominion recognized $18.3 million in impairment losses on its real estate owned. Through the review and analysis of communities targeted for strategic disposition, an aggregate $14.8 million impairment loss was recognized on assets held for disposition. An impairment loss was indicated as a result of the net book value of the assets held for disposition being greater than the estimated fair market value less the cost of disposal. In addition, United Dominion recorded a $3.5 million impairment loss on three communities acquired in the ASR merger in 1998 which were classified in real estate held for investment. An impairment loss

55

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

was indicated as the sum of the estimated future cash flows from the assets was deemed to be less than their carrying amounts.

The following is a reconciliation of the carrying amount of real estate held for investment at December 31, (dollars in thousands):

                                                                     2000                 1999                 1998
-------------------------------------------------------------------------------------------------------------------
Balance at January 1                                           $3,577,848           $3,643,245           $2,281,438
Real estate acquired                                               14,898               75,719            1,388,514
Capital expenditures                                               46,299               72,096               98,872
Transferred from development                                       68,025              116,787               23,350
Transferred from (to) real estate held for disposition             58,068             (326,499)            (148,929)
Impairment loss on real estate                                          -               (3,500)                   -
Disposal of fully depreciated assets                               (6,164)                   -                    -
                                                         ----------------------------------------------------------
Balance at December 31                                         $3,758,974           $3,577,848           $3,643,245
                                                         ==========================================================

The following is a reconciliation of accumulated depreciation for real estate held for investment at December 31, (dollars in thousands):

                                                                     2000                 1999                 1998
-------------------------------------------------------------------------------------------------------------------
Balance at January 1                                           $  373,164           $  280,663           $  200,506
Depreciation expense for the year*                                154,419              122,884              100,683
Transferred to held for disposition                               (14,548)             (30,383)             (20,526)
Disposal of fully depreciated assets                               (6,164)                   -                    -
                                                         ----------------------------------------------------------
Balance at December 31                                         $  506,871           $  373,164           $  280,663
                                                         ==========================================================

* Includes $1,425, $1,157 and $1,095 for 2000, 1999 and 1998, respectively, classified as "Other depreciation and amortization" in the consolidated statements of operations.

3. INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

At December 31, 2000, United Dominion's investment in an unconsolidated joint venture consisted of a 25% partnership interest in a development joint venture in which the Company is serving as the managing partner. No gain or loss was recognized on the Company's contribution to the development joint venture. The venture will develop five apartment communities with a total of 1,438 homes for an aggregate total cost of approximately $103 million. United Dominion serves as the developer, general contractor and property manager for the venture. The operating results for the joint venture were not material for the year ended December 31, 2000. The following is a summary of the financial position of the joint venture as of December 31, 2000 (dollars in thousands):

Assets:
Real estate, net                                     $85,644
Other assets                                           6,507
                                                 -----------
        Total assets                                 $92,151
                                                 ===========


Liabilities and partners' equity:
Mortgage notes payable                               $49,785
Other liabilities                                     11,436
Partners' equity                                      30,930
                                                 -----------
        Total liabilities and partners' equity       $92,151
                                                 ===========

56

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

4. SECURED DEBT

Secured debt, which encumbers $1.5 billion or 38.8% of United Dominion's real estate owned, ($2.3 billion or 61.2% of United Dominion's real estate owned is unencumbered) consists of the following at December 31, 2000 (dollars in thousands):

                                                                                                           No. of
                                                                      Weighted Avg.     Weighted Avg.    Communities
                                          Principal Outstanding       Interest Rate   Years to Maturity  Encumbered
                                      ----------------------------- ------------------------------------------------
                                               2000         1999            2000           2000           2000
------------------------------------------------------------------- ------------------------------------------------
Fixed Rate Debt
Mortgage Notes Payable (a)                    $513,962  $  555,414             7.96%                5.8           76
Tax-Exempt Secured Notes Payable                79,756      96,699             6.83%               13.1           13
REMIC Financings                                    --      59,167               --                  --           --
Secured Credit Facilities                       17,000      57,000             7.04%               13.0           --
                                      ----------------------------- ------------------------------------------------
Total Fixed Rate Secured Debt                  610,718     768,280             7.79%                7.0           89

Variable Rate Debt
Secured Credit Facilities                      216,960     138,675             7.22%               13.3           22
Tax-Exempt Secured Notes Payable                19,916      66,616             4.98%               24.5            3
Mortgage Notes Payable                          18,521      26,565             7.71%               11.7            5
                                      ----------------------------- ------------------------------------------------
Total Variable Rate Secured Debt               255,397     231,856             7.08%               14.1           30
                                      ----------------------------- ------------------------------------------------
Total Secured Debt                            $866,115  $1,000,136             7.58%                9.0          119
                                      ============================= ================================================

(a) Includes fair value adjustments aggregating $10.2 million in 2000 and $14.8 million in 1999 that were recorded in connection with two acquisitions consummated in 1998.

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 January 2001 through June 2034 and carry interest rates ranging from 7.13% to 9.58%.

Tax-Exempt Secured Notes Payable Fixed rate mortgage notes payable which secure tax-exempt housing bond issues mature at various dates through November 2025 and carry interest rates ranging from 6.13% to 8.10%. Interest on these notes is generally payable in semi-annual installments.

Secured Credit Facilities On December 31, 2000, United Dominion had $234.0 million outstanding under two revolving secured credit facilities with the Federal National Mortgage Association (the "FNMA Credit Facilities"). The FNMA Credit Facilities are for an initial term of five years, bear interest at a floating rate which can be fixed for periods of up to 270 days, and can be extended for an additional five or ten years at United Dominion's discretion. At December 31, 2000, the FNMA Credit Facilities had a weighted average floating rate of interest of 7.21%. In order to limit a portion of its interest rate exposure, United Dominion has two interest rate swap agreements associated with the FNMA Credit Facilities. These agreements have an aggregate notional value of $17 million under which United Dominion pays a fixed rate of interest and receives a variable rate on the notional amount. The interest rate swap agreements effectively change United Dominion's interest rate exposure on $17 million of secured debt from a variable rate to a weighted average fixed rate of 7.04% (Financial Instruments - Note 6).

Variable Rate Debt

Secured Credit Facilities Variable rate secured credit facilities consist of $217.0 million of the $234.0 million outstanding on the FNMA Credit Facilities.

Tax-Exempt Secured Notes Payable Variable rate mortgage notes payable which secure tax-exempt housing bond issues mature at various dates from December 2002 to October 2028. At December 31, 2000, these notes had interest rates ranging from 4.80% to 5.50%.

57

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

Mortgage Notes Payable Variable rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at various dates from July 2003 through September 2027. At December 31, 2000, these notes had interest rates ranging from 7.30% to 8.37%.

The extraordinary loss for the year ended December 31, 1998 resulted from the write-off of deferred financing costs on mortgage debt extinguished.

The aggregate maturities of secured debt for the five years subsequent to December 31, 2000 are as follows (dollars in thousands):

                                      Fixed Rate                                        Variable Rate
                ------------------------------------------------    ------------------------------------------------
                       Mortgage       Tax-Exempt       Secured             Secured        Tax-Exempt       Mortgage
    Year                Notes           Bonds           Notes               Notes           Notes           Notes         TOTAL
------------    ------------------------------------------------    ------------------------------------------------    -----------
2001                    $ 53,251         $ 1,062               -                   -               -         $   281      $ 54,594
2002                      47,446           1,215               -                   -         $ 2,200             302        51,163
2003                      40,855           1,246               -                   -               -           5,886        47,987
2004                     114,365           4,800               -                   -               -             205       119,370
2005                     119,406           1,236               -                   -               -           5,489       126,131
Thereafter               138,639          70,197         $17,000            $216,960          17,716           6,358       466,870
                ------------------------------------------------    ------------------------------------------------    -----------
                        $513,962         $79,756         $17,000            $216,960         $19,916         $18,521      $866,115
                ================================================    ================================================    ===========

5. UNSECURED DEBT

A summary of unsecured debt at December 31, 2000 and 1999 is as follows (dollars in thousands):

                                                             2000             1999
                                                          ----------       ----------
Commercial Banks
     Borrowings outstanding under an
      unsecured credit facility (a) (b)                   $  244,400       $  277,600

     Borrowings outstanding under an
      unsecured term loan (c)                                100,000               --

Senior Unsecured Notes - Other
     8.13% Senior Notes due November 2000                         --          146,150
     7.60% Medium-Term Notes due January 2002                 48,750           55,000
     7.65% Medium-Term Notes due January 2003 (d)             10,000           10,000
     7.22% Medium-Term Notes due February 2003                11,900           12,000
     5.05% City of Portland, OR Bonds due October 2003         7,345            7,345
     8.63% Notes due March 2003                               79,030               --
     7.98% Notes due March 2000-2003 (e)                      22,285           29,800
     7.67% Medium-Term Notes due January 2004                 54,000           54,000
     7.73% Medium-Term Notes due April 2005                   22,400           23,400
     7.02% Medium-Term Notes due November 2005                50,000           50,000
     7.95% Medium-Term Notes due July 2006                   107,398          120,340
     7.07% Medium-Term Notes due November 2006                25,000           25,000
     7.25% Notes due January 2007                            110,080          111,825
     ABAG Tax-Exempt Bonds due August 2008                    46,700               --
     8.50% Monthly Income Notes due November 2008             57,400           59,778
     8.50% Debentures due September 2024 (f)                 125,500          140,000
     Other (g)                                                 4,027            4,931
                                                          ----------       ----------
                                                             781,815          849,569
                                                          ----------       ----------
               Total Unsecured Debt                       $1,126,215       $1,127,169
                                                          ==========       ==========

58

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

(a) Weighted average interest rate of 7.5% and 6.7% at December 31, 2000 and 1999, respectively.
(b) As of December 31, 2000, United Dominion had seven interest rate swap agreements associated with commercial bank borrowings with an aggregate notional value of $120 million under which United Dominion pays a fixed rate of interest and receives a variable rate of interest on the notional amounts. The interest rate swaps effectively change United Dominion's interest rate exposure on these borrowings from a variable rate to a weighted average fixed rate of approximately 7.27%.
(c) As of December 31, 2000, United Dominion had five interest rate swap agreements associated with borrowings under the term loan with an aggregate notional value of $100 million under which United Dominion pays a fixed rate of interest and receives a variable rate of interest on the notional amounts. The interest rate swaps effectively change United Dominion's interest rate exposure on these borrowings from a variable rate to a weighted average fixed rate of approximately 7.53%.
(d) United Dominion has one interest rate swap agreement associated with these unsecured notes with an aggregate notional value of $10 million under which United Dominion pays a fixed rate of interest and receives a variable rate on the notional amount. The interest rate swap agreement effectively changes United Dominion's interest rate exposure on the $10 million from a variable rate to a fixed rate of 7.65%.
(e) Payable annually in three equal principal installments of $7.4 million.
(f) Includes an investor put feature which grants a one-time option to redeem the debentures in September 2004.
(g) Includes $3.8 million and $4.6 million at December 31, 2000 and 1999, respectively, of deferred gains from the termination of interest rate risk management agreements.

For the years ended December 31, 2000 and 1999, United Dominion recognized $831 thousand and $927 thousand in extraordinary gains related to the write-off of deferred financing costs and the repurchase of unsecured notes at less than face value, respectively.

Information concerning short-term bank borrowings is summarized in the table that follows (dollars in thousands):

                                                         2000      1999       1998
--------------------------------------------------------------------------------------
Total revolving credit facilities at December 31       $375,000   $310,000    $265,000
Borrowings outstanding at December 31                   244,400    277,600     240,000
Weighted average daily borrowings during the year       195,128    223,629     238,587
Maximum daily borrowings during the year                308,000    283,000     334,500   (a)
Weighted average daily interest rate during the year        7.3%       5.8%        6.1%  (a)
Weighted average daily interest rate at December 31         7.7%       6.7%        6.0%

(a) Includes balances on a $75 million bridge facility funded in July 1998 that matured in November 1998.

In June 2000, United Dominion closed on a $375 million three-year unsecured revolving credit facility (the "Credit Facility") with a consortium of banks. The Credit Facility, which extends until August 2003, replaces two lines of credit that allowed the Company to borrow in aggregate up to $310 million. Under the Credit Facility, the Company may borrow at a rate of LIBOR plus 100 basis points for LIBOR-based borrowings and pays a facility fee which is equal to 0.20% of the commitment. The Credit Facility is subject to customary financial covenants and limitations.

6. FINANCIAL INSTRUMENTS
Fair Value of Financial Instruments

The following estimated fair values of financial instruments were determined by United Dominion using available market information and appropriate valuation methodologies. Considerable judgement is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts United Dominion 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 United Dominion's financial instruments at December 31, 2000 and 1999, both on and off-balance sheet, are summarized as follows (dollars in thousands):

59

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

                                         2000                     1999
                                 ---------------------  ------------------------
                                  Carrying    Fair       Carrying       Fair
                                   Amount     Value       Amount        Value
                                 ---------------------  ------------------------
Secured debt                     $  866,115  $  887,430  $1,000,136   $1,031,074
Unsecured debt                    1,126,215   1,130,100   1,127,169    1,102,605
Interest rate swap agreements -
 (unfavorable) / favorable               --      (3,847)         --          626

The following methods and assumptions were used by United Dominion in estimating fair values:

Cash and cash equivalents  The carrying amount of cash and cash equivalents
-------------------------
approximates 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 United Dominion for the issuance of debt with similar terms and remaining lives. The carrying amount of United Dominion's variable rate secured debt approximates fair value at December 31, 2000 and 1999. The carrying amounts of United Dominion's borrowings under variable rate unsecured debt arrangements, short-term revolving credit agreements and lines of credit approximate their fair values at December 31, 2000 and 1999.

Interest rate swap agreements Fair value is based on external market quotations.

Derivative Instruments

The following table summarizes certain information pursuant to interest rate swap contracts at December 31, 2000 (dollars in thousands):

  Notional  Fixed  Type of        Underlying      Effective  Contract     Fair
   Amount   Rate  Contract         Debt             Date     Maturity   Value
--------------------------------------------------------------------------------
$  5,000  7.32%    Swap      Bank Credit Facility  06/26/95  07/01/04  $   (95)
  10,000  7.14%    Swap      Bank Credit Facility  10/18/95  10/03/02      (59)
   5,000  6.98%    Swap      Bank Credit Facility  11/21/95  10/03/02      (11)
  10,000  7.65%    Swap      Medium-Term Notes     01/26/99  01/27/03      134
   7,000  6.78%    Swap            FNMA            06/30/99  06/30/04      (44)
  10,000  7.22%    Swap            FNMA            12/01/99  04/01/04     (211)
  25,000  7.39%    Swap      Bank Credit Facility  11/01/00  08/01/03     (428)
  25,000  7.39%    Swap      Bank Credit Facility  11/01/00  08/01/03     (428)
  25,000  7.49%    Swap      Bank Term Loan        11/15/00  05/15/03     (433)
  20,000  7.49%    Swap      Bank Term Loan        11/15/00  05/15/03     (347)
  23,500  7.62%    Swap      Bank Term Loan        11/15/00  05/15/04     (602)
  23,000  7.62%    Swap      Bank Term Loan        11/15/00  05/15/04     (589)
  25,000  7.21%    Swap      Bank Credit Facility  12/01/00  08/01/03     (315)
   8,500  7.26%    Swap      Bank Term Loan        12/04/00  05/15/03     (103)
  25,000  7.21%    Swap      Bank Credit Facility  12/04/00  08/01/03     (316)
--------------------------------------------------------------------------------
$247,000                                                               $(3,847)
================================================================================

For all periods presented, United Dominion had no deferred gains or losses relating to terminated swap contracts.

Interest Rate Risk Management Agreements

In order to reduce the interest rate risk associated with the anticipated issuance of unsecured debt during 1998, United Dominion entered into a $100 million (notional amount) fixed pay forward starting swap agreement (interest rate risk management agreement) with an investment banking firm in July 1997. United Dominion settled the interest rate risk management agreement on November 9, 1998 by paying $15.6 million to the counterparty. United Dominion was unable to issue the unsecured debt contemplated by the interest rate risk management agreement, and

60

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

accordingly, the cost associated with this settlement is reflected in the 1998 statement of operations. United Dominion has no interest rate risk management agreements outstanding at December 31, 2000.

Risk of Counterparty Non-Performance

United Dominion has not obtained collateral or other security to support financial instruments. In the event of non-performance by the counterparty, United Dominion's credit loss on its derivative instruments is limited to the value of the derivative instruments that are favorable to United Dominion at December 31, 2000. However, such non-performance is not anticipated as the counterparties are highly rated credit quality U.S. financial institutions and management believes that the likelihood of realizing material losses from counterparty non-performance is remote.

7. EMPLOYEE BENEFIT PLANS

Profit Sharing Plan

The United Dominion Realty Trust, Inc. Profit Sharing Plan (the "Plan") is a defined contribution plan covering all eligible full-time employees. Under the Plan, United Dominion makes discretionary profit sharing and matching contributions to the Plan as determined by the Compensation Committee of the Board of Directors. Aggregate contributions, both matching and discretionary, which are included in United Dominion's consolidated statements of operations for the three years ended December 31, 2000, 1999 and 1998 were $1.3 million, $2.2 million and $550,000, respectively.

Stock Option Plan

United Dominion's 1985 Stock Option Plan, (the "Option Plan"), authorizes the grant of options, at the discretion of the Board of Directors, to certain officers, directors and key employees of United Dominion, for up to ten million shares of United Dominion's common stock which is limited to 8% of the number of shares of common stock issued and outstanding. The Option Plan generally provides, among other things, that options be granted at exercise prices not lower than the market value of the shares on the date of grant. Shares under options which expire or are canceled are available for subsequent grant. For options granted prior to December 12, 1995, the optionee has up to five years from the date on which the options first become exercisable during which to exercise the options. For options granted on or after December 12, 1995, the options have a ten-year term. Options granted prior to December 9, 1997 vest on December 31 of the year subsequent to grant while options granted on and after this date vest ratably over a three-year period beginning on December 31 of the year subsequent to grant. On December 8, 1998, United Dominion canceled 1,047,165 options which were granted on December 9, 1997 at $14.25. United Dominion subsequently issued options on December 8, 1998, which vest over a three-year period, at United Dominion's then market price of $10.875.

Pro forma information regarding net income and earnings per share is required by SFAS No. 123 "Accounting for Stock Based Compensation" ("SFAS No. 123"), and has been determined as if United Dominion had accounted for its employee stock options under the fair value method of accounting as defined in SFAS No. 123. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for 2000, 1999 and 1998:

                                           2000     1999     1998
                                           ----     ----     ----
Risk free interest rate                    5.2%     6.7%     4.9%
Dividend yield                             7.2%     6.9%     6.6%

Volatility factor                         .164     .144     .150
Weighted average expected life (years)       7        9        9

The weighted average fair value of options granted during 2000, 1999 and 1998 was $.65, $.76 and $.66, respectively.

61

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

For purposes of the pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. United Dominion's pro forma information is as follows (dollars in thousands, except per share amounts):

                                       2000       1999       1998
                                      -------    -------    -------
Net income available
 to common shareholders
  As reported                         $42,653    $55,908     $48,739
  Pro forma                            41,705     54,847      47,841
Earnings per common share-diluted
  As reported                         $   .41    $   .54     $   .49
  Pro forma                               .40        .53         .48

A summary of United Dominion's stock option activity during the three years ended December 31, 2000 is provided in the following table (dollars in thousands, except per share amounts):

                                                                                   Options Outstanding
                                                                -------------------------------------------------------
                                        Shares Available                             Weighted Average       Range of
                                        For Future Grant             Options          Exercise Price    Exercise Prices
----------------------------------------------------------      -----------------   ----------------    ---------------
Balance, December 31, 1997                        180,040              3,448,721              $13.89       $7.44-$15.38
Granted                                        (1,137,665)             1,137,665               11.16        10.88-14.13
Exercised                                              --                (73,490)              11.47         7.44-13.88
Forfeited                                       1,153,883             (1,153,883)              14.28         7.44-15.38
Additional shares authorized (a)                4,735,858                     --                  --                 --
                                               ----------             ----------              ------       ------------
Balance, December 31, 1998                      4,932,116              3,359,013               12.89         7.44-15.38
Granted                                        (1,192,333)             1,192,333               10.02         9.63-11.19
Exercised                                              --                (46,998)               9.87         9.19-10.25
Forfeited                                         288,756               (288,756)              13.46        10.88-15.38
                                               ----------             ----------              ------       ------------
Balance, December 31, 1999                      4,028,539              4,215,592               12.09         9.19-15.38
Granted                                          (653,300)               653,300                9.91         9.88-10.75
Exercised                                              --                (11,584)               9.19               9.19
Forfeited                                         364,363               (364,363)              12.95         9.63-15.25
Reduction in shares authorized (a)                (55,007)                    --                  --                 --
                                               ----------             ----------              ------       ------------
Balance, December 31, 2000                      3,684,595              4,492,945              $11.71       $9.19-$15.38
                                               ==========             ==========              ======       ============

(a) The number of shares of common stock issuable upon the exercise of options outstanding is limited to 8% of the number of shares of common stock issued and outstanding.

Exercisable at December 31,

1998                       1,691,863    $13.79    $7.44-$15.38
1999                       2,042,505     13.28      9.19-15.38
2000                       2,692,997     12.35      9.19-15.38

The weighted average remaining contractual life on all options outstanding is 7.2 years. 1,270,835 of share options had exercise prices between $13.94 and $15.38, 1,783,008 of share options had exercise prices between $10.75 and $13.50 and 1,439,102 of share options had exercise prices between $9.19 and $10.25.

8. SHAREHOLDERS' EQUITY

Preferred Stock Both Series A and Series B Preferred Stock have no stated par value and a liquidation preference of $25 per share. With no voting rights and no stated maturity, the preferred stock in both series is not subject to any sinking fund or mandatory redemption and is not convertible into any other securities of United Dominion. The Series A Preferred Stock could not be redeemed prior to April 24, 2000 and the Series B Preferred Stock is not redeemable prior to May 29, 2007. On or after these dates, the Series A and Series B Preferred Stock may be redeemed for cash at the option of United Dominion, 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 sales proceeds of other capital

62

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

stock of United Dominion. No Series A Preferred Stock was redeemed during 2000. All dividends due and payable on the Series A and Series B Preferred Stock have been accrued or paid as of the end of each fiscal year.

On December 7, 1998, in connection with the AAC merger, United Dominion issued eight million shares of newly created Series D Convertible Redeemable Preferred Stock (Series D), with a liquidation preference of $25 per share. The Series D has no voting rights, no stated maturity and is not subject to any sinking fund or mandatory redemption. Series D is convertible into 1.5385 shares of common stock at the option of the holder of Series D at any time at $16.25 per share. The Series D is not redeemable prior to December 7, 2003. On or after this date, United Dominion may, at its option, redeem at any time all or part of the Series D at a price per share of $25, payable in cash, plus all accrued and unpaid dividends, provided that the current market price of the common stock at least equals the conversion price, initially set at $16.25 per share. The redemption is payable solely out of the sale proceeds of other capital stock. In addition, United Dominion may not redeem in any consecutive twelve-month period a number of shares of Series D having an aggregate liquidation preference of more than $100 million.

Officers' Stock Purchase and Loan Plan Under the Officer Stock Purchase and Loan Plan (the "Loan Plan"), certain officers have purchased common stock at the then current market price with financing provided by United Dominion at an interest rate of 7%. The underlying notes mature between November 2001 and October 2006. A total of 858,500 shares have been issued and 556,500 shares are available for future issuance under the Loan Plan.

Dividend Reinvestment and Stock Purchase Plan United Dominion's Dividend Reinvestment and Stock Purchase Plan (the "Stock Purchase Plan") allows common and preferred shareholders the opportunity to purchase, through the reinvestment of cash dividends and through optional cash purchases, additional shares of United Dominion's common stock. As of December 31, 2000, 9,105,474 shares of common stock had been issued under the Stock Purchase Plan. Shares in the amount of 4,894,526 were reserved for further issuance under the Stock Purchase Plan at December 31, 2000. During 2000, 767,513 shares were issued under the Stock Purchase Plan for a total consideration of approximately $7.3 million.

Restricted Stock Awards United Dominion's 1999 Restricted Stock Awards Plan authorizes the granting of restricted stock awards to employees, officers and directors of United Dominion. The shares of common stock vest ratably over a three-year period. Deferred compensation expense is recorded over the vesting period and is based upon the value of the common stock on the date of issuance. A total of 132,000 shares of restricted stock have been issued under the Restricted Stock Awards Plan as of December 31, 2000.

Purchase Rights On January 27, 1998, the Board of Directors authorized a Shareholders Rights Plan (the "Rights Plan") which will become exercisable only if a person or group (the "Acquiring Person") acquires or announces a tender offer for more than 15% of the outstanding common stock of United Dominion. Upon exercise, United Dominion may issue one share of common stock in exchange for each right. Each right will entitle the holder to purchase for $45 one thousandth of a share of Series C Preferred stock or, at the option of United Dominion, common stock of United Dominion having a value of $90.

9. COMMITMENTS AND CONTINGENCIES

Land and Other Leases

United Dominion is party to several ground leases relating to operating communities. In addition, United Dominion is party to various other operating leases related to the operation of its regional offices. Future minimum lease payments for non-cancelable land and other leases at December 31, 2000 are as follows (dollars in thousands):

2001                       $ 1,860
2002                         1,809
2003                         1,627
2004                         1,506
2005                         1,358
Thereafter                  25,289
                       -----------
  Total                    $33,449
                       ===========

63

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

United Dominion incurred $2.6 million, $2.8 million and $1.6 million, respectively, of rent expense for the years ended December 31, 2000, 1999, and 1998.

Contingencies

United Dominion and its subsidiaries are engaged in various litigations and have a number of unresolved claims pending. The ultimate liability in respect of such litigations and claims cannot be determined at this time. United Dominion is of the opinion that such liability, to the extent not provided for through insurance or otherwise, is not likely to be material in relation to the consolidated financial statements of United Dominion.

During the third quarter of 2000, the Company agreed to settle a class action lawsuit concerning water usage billing in Texas in the amount of $2.7 million. The settlement is subject to final court approval. As a result of the settlement, the Company accrued $2.7 million for the settlement amount and estimated fees. The Company will pay the settlement amount when court approval is final. Individuals may opt out of the settlement and in the event that more than 125 persons opt out, United Dominion may elect to withdraw the settlement agreement. Management believes that the litigation will be resolved in accordance with the settlement agreement.

Commitments

United Dominion is committed to completing its real estate currently under development which has an estimated cost to complete of $63.5 million at December 31, 2000. For the joint venture development projects, United Dominion is committed to pay for all costs in excess of each individual project's budgeted costs. United Dominion does not anticipate any of the projects' costs to be in excess of their budget.

10. ACQUISITIONS

On March 27, 1998, United Dominion completed the acquisition of ASR Investments Corporation in a statutory merger (the "ASR Merger"). In connection with the ASR Merger, United Dominion acquired 39 communities with 7,550 apartment homes. Each share of ASR's common stock was exchanged for 1.575 shares of United Dominion's common stock. The acquisition was structured as a tax-free transaction and was treated as a purchase for accounting purposes. In connection with the acquisition, United Dominion acquired primarily real estate assets totaling $313.7 million. Consideration given by United Dominion included 7,742,839 shares of United Dominion's common stock valued at $14 per share for an aggregate equity value of $108.4 million plus the issuance of 1,529,990 units in the ASR Operating Partnership valued at $21.4 million. In addition, United Dominion assumed, at fair value, mortgage debt totaling $179.4 million and other liabilities of $13.6 million.

On December 7, 1998, United Dominion completed the acquisition of American Apartment Communities II ("AAC") in a statutory merger (the "AAC Merger"). In connection with the acquisition of AAC, United Dominion acquired 53 communities with 14,001 apartment homes. The AAC Merger was structured as a tax-free merger and exchange of partnership units and was treated as a purchase for accounting purposes. In connection with the AAC Merger, United Dominion acquired primarily real estate assets totaling $766.9 million. The aggregate purchase price consisted of the following: (i) 8,000,000 shares of United Dominion's 7.5% Series D Convertible Preferred Stock ($25 liquidation preference value) which is convertible into United Dominion's common stock at $16.25 per share with a fair market value of $175 million; (ii) the issuance of 5,614,035 units of limited partnership interest in the Partnership with an aggregate fair market value of $67.4 million; (iii) the assumption of $457.7 million of secured notes payable at fair market value; (iv) the assumption of liabilities and minority interest aggregating $27.8 million and; (v) $59.8 million of cash.

The ASR Merger and the AAC Merger were accounted for as purchases of real estate and the operating results for those communities are reflected in the accompanying consolidated financial statements from their respective dates of acquisition.

11. INDUSTRY SEGMENTS

United Dominion owns and operates multifamily apartment communities throughout the United States which generates rental and other property related income through the leasing of apartment units to a diverse base of tenants. United Dominion separately evaluates the performance of each of its apartment communities. However, because each of the apartment communities have similar economic characteristics, facilities, services and tenants,

64

UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000

the apartment communities have been aggregated into a single apartment communities segment. All segment disclosure is included in or can be derived from United Dominion's consolidated financial statements.

There is no tenant who contributed 10% or more of United Dominion's total revenues during 2000, 1999 or 1998.

12. UNAUDITED SUMMARIZED CONSOLIDATED QUARTERLY FINANCIAL DATA

Summarized consolidated quarterly financial data for the year ended December 31, 2000 is as follows (dollars in thousands, except per share amounts):

                                                                          Three Months Ended
                                                  ---------------------------------------------------------------
                                                     March 31      June 30(a)     September 30(b)  December 31
                                                     --------      ----------     ---------------  -----------
Rental income                                        $154,057        $155,144         $154,645       $152,979
Income before gains on sales of investments,
     minority interests and extraordinary item         17,120           7,617           10,199         13,784
Gains on the sales of investments                       2,533           5,928           11,261         11,728
Net income available to common shareholders             9,172           6,233           11,161         16,087

Earnings per common share:
Basic                                                $    .09         $   .06         $    .11        $   .16
Diluted                                              $    .09         $   .06         $    .11        $   .16

(a) The second quarter of 2000 includes $9.9 million of catch-up depreciation expense related to the transfer of properties from real estate held for disposition to real estate held for investment.
(b) The third quarter of 2000 includes a $2.7 million charge related to water usage billing litigation and a $1.0 million charge for changes to executive employment agreements.


Summarized consolidated quarterly financial data for the year ended December 31, 1999 is as follows (dollars in thousands, except per share amounts):

                                                                          Three Months Ended
                                                  ---------------------------------------------------------------
                                                     March 31      June 30(a)     September 30     December 31b)
                                                     --------      ----------     ------------     -------------
Rental income                                        $153,791        $154,430         $155,523       $155,005
Income before gains on sales of investments,
     minority interests and extraordinary item         20,941          11,389           20,521          7,528
Gains on the sales of investments                         191          32,214               48          5,542
Net income available to common shareholders            10,643          31,360           10,435          3,470

Earnings per common share:
Basic                                                $    .10        $    .30         $    .10       $    .03
Diluted                                              $    .10        $    .30         $    .10       $    .03

(a) The second quarter of 1999 includes $32.2 million of gains on the sales of investments and a $7.1 million impairment loss on real estate and investments.
(b) The fourth quarter of 1999 includes $5.5 million of gains on the sales of investments and a $12.2 million impairment loss on real estate and investments.

65

SCHEDULE III
Summary of Real Estate Owned

                                                                                         Initial Costs                   Total
                                                                         -------------------------------------------
                                                                              Land and             Buildings           Initial
                                                                                Land                  and            Acquisition
                                                 Encumbrances (a) (b)        Improvements         Improvements         Costs (c)
                                              ------------------------------------------------------------------------------------
APARTMENTS
REAL ESTATE HELD FOR INVESTMENT

Northern Region:
RALEIGH-DURHAM-CHAPEL HILL, NC
Dominion On Spring Forest                       $           -           $ 1,257,500          $ 8,586,255          $ 9,843,755
Dominion Park Green                                         -               500,000            4,321,872            4,821,872
Dominion On Lake Lynn                              16,250,000             1,723,363            5,303,760            7,027,123
Dominion Courtney Place                                     -             1,114,600            5,119,259            6,233,859
Dominion Walnut Ridge                                       -             1,791,215           11,968,852           13,760,067
Dominion Walnut Creek                                       -             3,170,290           21,717,407           24,887,697
Dominion Ramsgate                                           -               907,605            6,819,154            7,726,759
Harbour Pointe                                              -             1,898,740            7,101,260            9,000,000
Copper Mill                                                 -             1,548,280           16,066,720           17,615,000
Trinity Park                                       15,076,889             4,579,648           17,575,712           22,155,360

RICHMOND-PETERSBURG, VA
Dominion Olde West                                          -             1,965,097           12,203,965           14,169,062
Dominion Creekwood                                          -                     -                    -                    -
Dominion Laurel Springs                                     -               464,480            3,119,716            3,584,196
Dominion English Hills                             16,640,000             1,979,174           11,524,313           13,503,487
Dominion Gayton Crossing                           10,400,000               825,760            5,147,968            5,973,728
Dominion West End                                  14,597,100             2,059,252           15,049,088           17,108,340
Courthouse Green                                    7,410,000               732,050            4,702,353            5,434,403
Waterside At Ironbridge                            11,635,000             1,843,819           13,238,590           15,082,409

CHARLOTTE-GASTONIA-ROCK HILL
The Highlands                                               -               321,400            2,830,346            3,151,746
Emerald Bay                                                 -               626,070            4,722,862            5,348,932
Dominion Peppertree                                         -             1,546,267            7,699,221            9,245,488
Dominion Crown Point                                        -             2,122,179           22,338,577           24,460,756
Dominion Harris Pond                                        -               886,788            6,728,097            7,614,885
Dominion Mallard Creek                                  4,962               698,860            6,488,061            7,186,921
Chateau Village                                             -             1,046,610            6,979,555            8,026,164
Dominion At Sharon                                          -               667,368            4,856,103            5,523,471
Providence Court                                            -                     -           22,047,803           22,047,803
Stoney Pointe                                      12,262,385             1,499,650           15,855,610           17,355,260

GREENSBORO-WINSTON-SALEM-H PNT
Beechwood                                                   -             1,409,377            6,086,677            7,496,054
Steeplechase                                                -             3,208,108           11,513,978           14,722,086
Northwinds                                                  -             1,557,654           11,735,787           13,293,441
Deerwood Crossings                                          -             1,539,901            7,989,043            9,528,944
Dutch Village                                               -             1,197,593            4,826,266            6,023,858
Lake Brandt                                                 -             1,546,950           13,489,466           15,036,416
Park Forest                                               378               679,671            5,770,413            6,450,084
Deep River Pointe                                           -             1,670,648           11,140,329           12,810,977

WILMINGTON NC
Cape Harbor                                                 -             1,891,671           18,113,109           20,004,780
Mill Creek                                                  -             1,404,498            4,489,398            5,893,895
The Creek                                                   -               417,500            2,506,206            2,923,706
Forest Hills                                                -             1,028,000            5,420,478            6,448,478
Clear Run                                                   -               874,830            8,740,602            9,615,432
Crosswinds                                                  -             1,096,196           18,230,236           19,326,432

BALTIMORE
Gatewater Landing                                           -             2,078,422            6,084,526            8,162,948
Dominion Kings Place                                4,525,000             1,564,942            7,006,574            8,571,516
Dominion At Eden Brook                              7,730,000             2,361,167            9,384,171           11,745,339
Dominion Great Oaks                                10,652,042             2,919,481            9,099,691           12,019,172

                                                        Cost of
                                                     Improvements               Gross Amount at
                                                      Capitalized         Which Carried at Close of Period
                                                                        --------------------------------------
                                                      Subsequent            Land and             Buildings             Total
                                                   to Acquisition            Land                  and               Carrying
                                                  (Net of Disposals)      Improvements          Improvements         Value (d)
                                              -----------------------------------------------------------------------------------
APARTMENTS
REAL ESTATE HELD FOR INVESTMENT

Northern Region:
RALEIGH-DURHAM-CHAPEL HILL, NC
Dominion On Spring Forest                             $ 2,942,976          $ 1,620,092          $ 11,166,639         $ 12,786,731
Dominion Park Green                                     1,298,146              686,991             5,433,027            6,120,017
Dominion On Lake Lynn                                   2,712,747            2,237,052             7,502,818            9,739,870
Dominion Courtney Place                                 2,809,359            1,435,467             7,607,752            9,043,218
Dominion Walnut Ridge                                   2,092,322            2,166,192            13,686,197           15,852,389
Dominion Walnut Creek                                   3,109,641            3,693,110            24,304,228           27,997,338
Dominion Ramsgate                                         799,858            1,028,925             7,497,692            8,526,617
Harbour Pointe                                            127,062            1,898,796             7,228,266            9,127,062
Copper Mill                                               872,794            1,760,775            16,727,019           18,487,794
Trinity Park                                              888,403            4,696,853            18,346,911           23,043,763

RICHMOND-PETERSBURG, VA
Dominion Olde West                                      1,784,328            2,378,396            13,574,994           15,953,390
Dominion Creekwood                                        453,599               45,423               408,176              453,599
Dominion Laurel Springs                                 1,040,630              632,047             3,992,779            4,624,826
Dominion English Hills                                  4,912,176            2,804,705            15,610,959           18,415,663
Dominion Gayton Crossing                                6,252,057            1,164,893            11,060,892           12,225,785
Dominion West End                                       2,600,429            2,646,527            17,062,242           19,708,769
Courthouse Green                                        2,107,203            1,078,454             6,463,152            7,541,606
Waterside At Ironbridge                                   627,216            1,970,316            13,739,309           15,709,625

CHARLOTTE-GASTONIA-ROCK HILL
The Highlands                                           2,551,906              690,791             5,012,860            5,703,652
Emerald Bay                                             2,722,321            1,179,772             6,891,482            8,071,253
Dominion Peppertree                                     1,487,446            1,844,832             8,888,102           10,732,934
Dominion Crown Point                                    1,653,268            3,802,672            22,311,352           26,114,024
Dominion Harris Pond                                    1,233,852            1,225,463             7,623,274            8,848,737
Dominion Mallard Creek                                    603,947              776,615             7,014,252            7,790,868
Chateau Village                                         2,067,104            1,405,669             8,687,599           10,093,268
Dominion At Sharon                                        965,963              897,820             5,591,614            6,489,433
Providence Court                                        9,281,912            7,409,295            23,920,420           31,329,715
Stoney Pointe                                           1,123,359            1,733,721            16,744,898           18,478,619

GREENSBORO-WINSTON-SALEM-H PNT
Beechwood                                                 930,458            1,614,690             6,811,822            8,426,512
Steeplechase                                           12,155,379            3,748,136            23,129,330           26,877,465
Northwinds                                                933,359            1,738,394            12,488,407           14,226,800
Deerwood Crossings                                        973,787            1,670,816             8,831,915           10,502,731
Dutch Village                                             567,861            1,282,479             5,309,240            6,591,719
Lake Brandt                                               720,578            1,782,363            13,974,632           15,756,994
Park Forest                                               555,165              859,257             6,145,992            7,005,249
Deep River Pointe                                         375,283            1,799,007            11,387,253           13,186,260

WILMINGTON NC
Cape Harbor                                               950,768            2,265,135            18,690,413           20,955,549
Mill Creek                                             13,360,826            1,892,237            17,362,484           19,254,721
The Creek                                               1,632,568              488,728             4,067,546            4,556,275
Forest Hills                                            1,876,920            1,201,540             7,123,858            8,325,398
Clear Run                                               5,179,423            1,251,932            13,542,922           14,794,855
Crosswinds                                                987,071            1,202,881            19,110,623           20,313,503

BALTIMORE
Gatewater Landing                                       1,259,919            2,175,367             7,247,500            9,422,867
Dominion Kings Place                                      853,607            1,645,423             7,779,700            9,425,123
Dominion At Eden Brook                                  1,204,443            2,462,172            10,487,609           12,949,782
Dominion Great Oaks                                     3,242,222            3,744,845            11,516,549           15,261,394

                                                                                                                  Depreciable
                                                                                                                    Life of
                                                  Accumulated            Date of                Date               Building
                                                  Depreciation          Construction           Acquired           Component (e)
                                              -----------------------------------------------------------------------------------
APARTMENTS
REAL ESTATE HELD FOR INVESTMENT

Northern Region:
RALEIGH-DURHAM-CHAPEL HILL, NC
Dominion On Spring Forest                          $ 4,848,738            1978/81              05/21/91             35 Years
Dominion Park Green                                  2,174,275             1987                09/27/91             35 Years
Dominion On Lake Lynn                                2,529,733             1986                12/01/92             35 Years
Dominion Courtney Place                              2,313,698            1979/81              07/08/93             35 Years
Dominion Walnut Ridge                                3,590,871            1982/84              03/04/94             35 Years
Dominion Walnut Creek                                5,949,152            1985/86              05/17/94             35 Years
Dominion Ramsgate                                    1,289,101             1988                08/15/96             35 Years
Harbour Pointe                                       1,039,246             1984                12/31/96             35 Years
Copper Mill                                          2,442,624             1997                12/31/96             35 Years
Trinity Park                                         2,615,545             1987                02/28/97             35 Years

RICHMOND-PETERSBURG, VA
Dominion Olde West                                   5,803,922       1978/82/84/85/87     12/31/84 & 8/27/91        35 Years
Dominion Creekwood                                      64,594             1984                08/27/91             35 Years
Dominion Laurel Springs                              1,563,229             1972                09/06/91             35 Years
Dominion English Hills                               5,912,461            1969/76              12/06/91             35 Years
Dominion Gayton Crossing                             3,650,677             1973                09/28/95             35 Years
Dominion West End                                    3,563,759             1989                12/28/95             35 Years
Courthouse Green                                     3,003,466            1974/78              12/31/84             35 Years
Waterside At Ironbridge                              1,656,472             1987                09/30/97             35 Years

CHARLOTTE-GASTONIA-ROCK HILL
The Highlands                                        3,335,723             1970                01/17/84             35 Years
Emerald Bay                                          3,760,153             1972                02/06/90             35 Years
Dominion Peppertree                                  2,699,442             1987                12/14/93             35 Years
Dominion Crown Point                                 2,898,158           1987/2000             07/01/94             35 Years
Dominion Harris Pond                                 1,925,529             1987                07/01/94             35 Years
Dominion Mallard Creek                               1,663,639             1989                08/16/94             35 Years
Chateau Village                                      1,806,472             1974                08/15/96             35 Years
Dominion At Sharon                                   1,040,435             1984                08/15/96             35 Years
Providence Court                                     3,296,574             1997                09/30/97             35 Years
Stoney Pointe                                        2,515,970             1991                02/28/97             35 Years

GREENSBORO-WINSTON-SALEM-H PNT
Beechwood                                            2,016,469             1985                12/22/93             35 Years
Steeplechase                                         3,385,125            1990/97              03/07/96             35 Years
Northwinds                                           2,167,287            1989/97              08/15/96             35 Years
Deerwood Crossings                                   1,586,060             1973                08/15/96             35 Years
Dutch Village                                        1,009,162             1970                08/15/96             35 Years
Lake Brandt                                          2,295,729             1995                08/15/96             35 Years
Park Forest                                            987,884             1987                09/26/96             35 Years
Deep River Pointe                                    1,469,221             1997                10/01/97             35 Years

WILMINGTON NC
Cape Harbor                                          3,132,026             1996                08/15/96             35 Years
Mill Creek                                           2,291,769            1986/98              09/30/91             35 Years
The Creek                                            1,686,047             1973                06/30/92             35 Years
Forest Hills                                         2,454,927            1964/69              06/30/92             35 Years
Clear Run                                            3,098,749            1987/89              07/22/94             35 Years
Crosswinds                                           2,876,364             1990                02/28/97             35 Years

BALTIMORE
Gatewater Landing                                    2,420,401             1970                12/16/92             35 Years
Dominion Kings Place                                 2,287,161             1983                12/29/92             35 Years
Dominion At Eden Brook                               3,116,140             1984                12/29/92             35 Years
Dominion Great Oaks                                  3,586,816             1974                07/01/94             35 Years


                                                                                        Initial Costs                    Total
                                                                          --------------------------------------
                                                                               Land and             Buildings           Initial
                                                                                 Land                  and            Acquisition
                                                    Encumbrances (a) (b)     Improvements         Improvements         Costs (c)
                                                   ------------------------------------------------------------------------------
Dominion Constant Friendship                                    -               903,122            4,668,956            5,572,078
Lakeside Mill                                           5,750,000             2,665,869           10,109,175           12,775,044

COLUMBUS OH
Sycamore Ridge                                         13,702,434             4,067,900           15,433,285           19,501,185
Heritage Green                                                  -             2,990,199           11,391,797           14,381,996
Alexander Court                                                 -             1,573,412                    -            1,573,412
Governour's Square                                     29,000,003             7,512,513           28,695,050           36,207,563
Hickory Creek                                                   -             3,421,413           13,539,402           16,960,815

OTHER MARKETS
Forest Lake At Oyster Point, Newport News, VA                   -               780,117            8,861,878            9,641,995
Woodscape, Newport News, VA                                     -               798,700            7,209,525            8,008,225
Eastwind, Virginia Beach, VA                                    -               155,000            5,316,738            5,471,738
Dominion Waterside At Lynnhaven, Virginia Beach, VA             -             1,823,983            4,106,710            5,930,693
Heather Lake, Hampton, VA                                       -               616,800            3,400,672            4,017,472
Dominion Yorkshire Downs, Yorktown, VA                  6,825,000             1,088,887            8,581,771            9,670,658
Dominion Middle Ridge, Woodbridge. VA                  13,192,977             3,311,468           13,283,047           16,594,515
Dominion Lake Ridge, Lake Ridge, VA                     8,970,000             2,366,061            8,386,439           10,752,500
Knolls At Newgate, Centreville, VA                              -             1,725,725            3,530,134            5,255,859
Greens At Falls Run, Fredericksburg, VA                         -             2,730,722            5,300,203            8,030,925
Manor At England Run, Fredericksburg, VA                        -             1,168,810            7,006,464            8,175,274
Greens At Hollymead, Charlottesville, VA                        -               965,114            5,250,374            6,215,488
Brittingham Square, Salisbury, MD                               -               650,143            4,962,246            5,612,389
Greens At Schumaker Pond, Salisbury, MD                         -               709,559            6,117,582            6,827,141
Greens At Cross Court, Easton, MD                               -             1,182,414            4,544,012            5,726,426
Greens At Hilton Run, Lexington Park, MD               11,520,000             2,754,447           10,482,579           13,237,026
Dover Country, Dover, DE                                        -             2,007,878            6,365,053            8,372,931
Greens At Cedar Chase, Dover, DE                        4,150,000             1,528,667            4,830,738            6,359,405
Washington Park, Centerville, OH                                -             2,011,520            7,565,279            9,576,799
Fountainhead, Dayton, OH                                1,521,711               390,542            1,420,166            1,810,708
Jamestown Of Toledo, Toledo, OH                                 -             1,800,271            7,053,585            8,853,856
Colony Village, New Bern, NC                                    -               346,330            3,036,956            3,383,286
Brynn Marr, Jacksonville, NC                                    -               432,974            3,821,508            4,254,482
Liberty Crossing, Jacksonville, NC                              -               840,000            3,873,139            4,713,139
Bramblewood, Goldsboro, NC                                      -               401,538            3,150,912            3,552,450
Cumberland Trace, Fayetteville, NC                              -               632,281            7,895,674            8,527,955
Village At Cliffdale, Fayetteville, NC                 10,014,218               941,284           15,498,216           16,439,501
Morganton Place, Fayetteville, NC                               -               819,090           13,217,086           14,036,176
Woodberry, Asheville, NC                                        -               388,699            6,380,899            6,769,598
Sunset Village, Flint, MI                                       -               796,994            1,829,226            2,626,220
2900 Place, East Lansing, MI                                    -             1,818,957            5,593,327            7,412,284
Brandywine Creek, East Lansing, MI                              -             4,665,991           17,514,466           22,180,457
Lakewood, Haslett, MI                                           -             1,113,126            3,877,503            4,990,629
Nemoke Trail, Haslett, MI                                       -             3,430,631           12,222,526           15,653,157
American Heritage, Waterford, MI                                -             1,021,412            3,958,146            4,979,558
Ashton Pines, Waterford, MI                                     -             1,822,351            8,013,902            9,836,253
Kings Gate, Sterling Heights, MI                                -             1,180,664            4,828,504            6,009,168
Lancaster Lake, Clarkston, MI                                   -             4,237,887           14,662,797           18,900,684

Southern Region:
ORLANDO
Fisherman's Village                                             -             2,387,368            7,458,897            9,846,265
Seabrook                                                        -             1,845,853            4,155,275            6,001,128
Dover Village                                                   -             2,894,702            6,456,100            9,350,802
Lakeside North                                         12,440,000             1,532,700           11,076,062           12,608,762
Regatta Shore                                                   -               757,008            6,607,367            7,364,375
Alafaya Woods                                          10,000,000             1,653,000            9,042,256           10,695,256
Vinyards                                                8,795,000             1,840,230           11,571,625           13,411,855
Andover Place                                          13,405,000             3,692,187            7,756,919           11,449,106
Los Altos                                              11,440,000             2,803,805           12,348,464           15,152,270
Lotus Landing                                                   -             2,184,723            8,638,664           10,823,387

                                                           Cost of
                                                         Improvements                 Gross Amount at
                                                         Capitalized          Which Carried at Close of Period
                                                                            ----------------------------------
                                                         Subsequent           Land and             Buildings         Total
                                                       to Acquisition           Land                  and            Carrying
                                                     (Net of Disposals)     Improvements          Improvements       Value (d)
                                                   ------------------------------------------------------------------------------
Dominion Constant Friendship                               693,335            1,043,201             5,222,212         6,265,413
Lakeside Mill                                              280,575            2,673,914            10,381,705        13,055,619

COLUMBUS OH
Sycamore Ridge                                             849,659            4,172,041            16,178,802        20,350,844
Heritage Green                                           9,228,112            3,093,476            20,516,631        23,610,107
Alexander Court                                         21,342,176            1,642,866            21,272,723        22,915,588
Governour's Square                                       1,589,518            7,663,518            30,133,563        37,797,081
Hickory Creek                                              646,837            3,452,749            14,154,904        17,607,652

OTHER MARKETS
Forest Lake At Oyster Point, Newport News, VA            1,897,758            1,166,789            10,372,964        11,539,752
Woodscape, Newport News, VA                              2,357,904            1,103,568             9,262,561        10,366,129
Eastwind, Virginia Beach, VA                             1,214,815              368,372             6,318,181         6,686,553
Dominion Waterside At Lynnhaven, Virginia Beach, VA      1,170,854            2,009,683             5,091,864         7,101,547
Heather Lake, Hampton, VA                                3,429,085            1,015,545             6,431,012         7,446,557
Dominion Yorkshire Downs, Yorktown, VA                     672,743            1,248,510             9,094,892        10,343,401
Dominion Middle Ridge,  Woodbridge. VA                     962,754            3,423,239            14,134,030        17,557,269
Dominion Lake Ridge, Lake Ridge, VA                        760,043            2,511,181             9,001,362        11,512,543
Knolls At Newgate, Centreville, VA                       1,637,046            1,846,268             5,046,637         6,892,905
Greens At Falls Run, Fredericksburg, VA                    818,868            2,876,643             5,973,149         8,849,792
Manor At England Run, Fredericksburg, VA                13,178,991            2,794,885            18,559,380        21,354,265
Greens At Hollymead, Charlottesville, VA                   638,962            1,056,498             5,797,953         6,854,451
Brittingham Square, Salisbury, MD                          597,661              784,733             5,425,316         6,210,050
Greens At Schumaker Pond, Salisbury, MD                    861,372              857,168             6,831,345         7,688,513
Greens At Cross Court, Easton, MD                          985,831            1,362,893             5,349,364         6,712,257
Greens At Hilton Run, Lexington Park, MD                 1,343,556            3,083,093            11,497,489        14,580,582
Dover Country, Dover, DE                                 2,369,190            2,359,250             8,382,870        10,742,121
Greens At Cedar Chase, Dover, DE                           722,150            1,722,356             5,359,199         7,081,555
Washington Park, Centerville, OH                           972,360            2,100,912             8,448,248        10,549,159
Fountainhead, Dayton, OH                                    68,744              390,542             1,488,910         1,879,452
Jamestown Of Toledo, Toledo, OH                            499,396            1,874,443             7,478,809         9,353,252
Colony Village, New Bern, NC                             1,865,002              552,767             4,695,521         5,248,288
Brynn Marr, Jacksonville, NC                             2,528,323              723,818             6,058,987         6,782,805
Liberty Crossing, Jacksonville, NC                       2,782,941            1,418,632             6,077,448         7,496,080
Bramblewood, Goldsboro, NC                               1,453,075              576,414             4,429,111         5,005,525
Cumberland Trace, Fayetteville, NC                         657,116              664,579             8,520,492         9,185,071
Village At Cliffdale, Fayetteville, NC                   1,081,762            1,118,152            16,403,110        17,521,262
Morganton Place, Fayetteville, NC                          584,479              886,825            13,733,830        14,620,655
Woodberry, Asheville, NC                                   983,036              554,427             7,198,206         7,752,634
Sunset Village, Flint, MI                                   59,350              796,994             1,888,576         2,685,570
2900 Place, East Lansing, MI                               170,664            1,819,883             5,763,065         7,582,948
Brandywine Creek, East Lansing, MI                      (2,752,066)           4,691,285            14,737,106        19,428,391
Lakewood, Haslett, MI                                      114,808            1,162,755             3,942,683         5,105,437
Nemoke Trail, Haslett, MI                                  118,676            3,430,631            12,341,201        15,771,833
American Heritage, Waterford, MI                            76,712            1,028,097             4,028,174         5,056,270
Ashton Pines, Waterford, MI                                187,150            1,838,608             8,184,796        10,023,403
Kings Gate, Sterling Heights, MI                           115,509            1,193,949             4,930,729         6,124,677
Lancaster Lake, Clarkston, MI                              584,959            4,292,759            15,192,885        19,485,643

Southern Region:
ORLANDO
Fisherman's Village                                      2,945,691            3,090,614             9,701,343        12,791,956
Seabrook                                                 2,674,836            2,241,118             6,434,846         8,675,964
Dover Village                                            3,334,730            3,359,514             9,326,019        12,685,532
Lakeside North                                           3,521,173            2,232,375            13,897,560        16,129,935
Regatta Shore                                            2,493,119            1,503,406             8,354,088         9,857,494
Alafaya Woods                                            1,993,331            2,097,999            10,590,589        12,688,588
Vinyards                                                 2,735,670            2,379,143            13,768,382        16,147,525
Andover Place                                            2,947,660            4,456,793             9,939,973        14,396,766
Los Altos                                                2,426,454            3,306,774            14,271,949        17,578,724
Lotus Landing                                            1,793,437            2,384,771            10,232,053        12,616,824

                                                                                                                    Depreciable
                                                                                                                      Life of
                                                              Accumulated        Date of              Date            Building
                                                              Depreciation     Construction         Acquired        Component (e)
                                                        --------------------------------------------------------------------------
Dominion Constant Friendship                                   1,201,822         1990                05/04/95          35 Years
Lakeside Mill                                                  2,140,095         1989                12/10/99          35 Years

COLUMBUS OH
Sycamore Ridge                                                 1,522,763         1997                07/02/98          35 Years
Heritage Green                                                 1,544,562         1998                07/02/98          35 Years
Alexander Court                                                3,680,423         1999                07/02/98          35 Years
Governour's Square                                             2,249,997         1967                12/07/98          35 Years
Hickory Creek                                                  1,050,874         1988                12/07/98          35 Years

OTHER MARKETS
Forest Lake At Oyster Point, Newport News, VA                  2,433,357         1986                08/15/95          35 Years
Woodscape, Newport News, VA                                    3,897,754        1974/76              12/29/87          35 Years
Eastwind, Virginia Beach, VA                                   2,567,744         1970                04/04/88          35 Years
Dominion Waterside At Lynnhaven, Virginia Beach, VA            1,115,488         1966                08/15/96          35 Years
Heather Lake, Hampton, VA                                      4,246,120        1972/74              03/01/80          35 Years
Dominion Yorkshire Downs, Yorktown, VA                         1,101,616         1987                12/23/97          35 Years
Dominion Middle Ridge,  Woodbridge. VA                         2,427,325         1990                06/25/96          35 Years
Dominion Lake Ridge, Lake Ridge, VA                            1,807,529         1987                02/23/96          35 Years
Knolls At Newgate, Centreville, VA                             1,596,876         1972                07/01/94          35 Years
Greens At Falls Run, Fredericksburg, VA                        1,356,223         1989                05/04/95          35 Years
Manor At England Run, Fredericksburg, VA                       2,903,977         1990                05/04/95          35 Years
Greens At Hollymead, Charlottesville, VA                       1,265,020         1990                05/04/95          35 Years
Brittingham Square, Salisbury, MD                              1,209,075         1991                05/04/95          35 Years
Greens At Schumaker Pond, Salisbury, MD                        1,500,105         1988                05/04/95          35 Years
Greens At Cross Court, Easton, MD                              1,211,651         1987                05/04/95          35 Years
Greens At Hilton Run, Lexington Park, MD                       2,502,809         1988                05/04/95          35 Years
Dover Country, Dover, DE                                       2,501,838         1970                07/01/94          35 Years
Greens At Cedar Chase, Dover, DE                               1,273,486         1988                05/04/95          35 Years
Washington Park, Centerville, OH                                 795,173         1998                12/07/98          35 Years
Fountainhead, Dayton, OH                                         113,397         1966                12/07/98          35 Years
Jamestown Of Toledo, Toledo, OH                                  556,014         1965                12/07/98          35 Years
Colony Village, New Bern, NC                                   2,794,741        1972/74              12/31/84          35 Years
Brynn Marr, Jacksonville, NC                                   3,324,316        1973/77              12/31/84          35 Years
Liberty Crossing, Jacksonville, NC                             3,284,032        1972/74              11/30/90          35 Years
Bramblewood, Goldsboro, NC                                     2,627,219        1980/82              12/31/84          35 Years
Cumberland Trace, Fayetteville, NC                             1,463,266         1973                08/15/96          35 Years
Village At Cliffdale, Fayetteville, NC                         2,653,591         1992                08/15/96          35 Years
Morganton Place, Fayetteville, NC                              2,130,664         1994                08/15/96          35 Years
Woodberry, Asheville, NC                                       1,328,960         1987                08/15/96          35 Years
Sunset Village, Flint, MI                                        263,559         1940                12/07/98          35 Years
2900 Place, East Lansing, MI                                     395,404         1966                12/07/98          35 Years
Brandywine Creek, East Lansing, MI                             1,276,029         1974                12/07/98          35 Years
Lakewood, Haslett, MI                                            323,424         1974                12/07/98          35 Years
Nemoke Trail, Haslett, MI                                        959,233         1978                12/07/98          35 Years
American Heritage, Waterford, MI                                 298,729         1968                12/07/98          35 Years
Ashton Pines, Waterford, MI                                      517,080         1987                12/07/98          35 Years
Kings Gate, Sterling Heights, MI                                 339,160         1973                12/07/98          35 Years
Lancaster Lake, Clarkston, MI                                  1,144,008         1988                12/07/98          35 Years

Southern Region:
ORLANDO
Fisherman's Village                                            2,571,996         1984                12/29/95          35 Years
Seabrook                                                       1,922,830         1984                02/20/96          35 Years
Dover Village                                                  3,391,517         1981                03/31/93          35 Years
Lakeside North                                                 3,917,847         1984                04/14/94          35 Years
Regatta Shore                                                  2,673,048         1988                06/30/94          35 Years
Alafaya Woods                                                  2,941,398        1988/90              10/21/94          35 Years
Vinyards                                                       3,754,574        1984/86              10/31/94          35 Years
Andover Place                                                  2,609,490         1988          09/29/95 & 09/30/96     35 Years
Los Altos                                                      2,546,376         1990                10/31/96          35 Years
Lotus Landing                                                  1,408,858         1985                07/01/97          35 Years


SCHEDULE III
Summary of Real Estate Owned

                                                                                      Initial Costs                  Total
                                                                             -------------------------------
                                                                                Land and         Buildings          Initial
                                                                                  Land              and           Acquisition
                                                      Encumbrances (a) (b)    Improvements     Improvements        Costs (c)
                                                     ---------------------------------------------------------------------------
Seville On The Green                                                      -        1,282,616       6,498,062          7,780,678
Arbors @ Lee Vista                                               14,350,000        3,975,679      16,920,454         20,896,133
Heron Lake                                                        6,306,389        1,446,553       9,287,878         10,734,431
Ashton @ Waterford                                                        -        3,871,744      17,537,879         21,409,623

TAMPA-ST PETERSBURG-CLEARWATER
Bay Cove                                                                  -        2,928,847       6,578,257          9,507,104
Summit West                                                               -        2,176,500       4,709,970          6,886,470
Pinebrook                                                                 -        1,780,375       2,458,172          4,238,547
Lakewood Place                                                   10,250,000        1,395,051      10,647,377         12,042,428
Hunters Ridge                                                    10,000,000        2,461,548      10,942,434         13,403,982
Bay Meadow                                                                -        2,892,526       9,253,525         12,146,051
Cambridge                                                                 -        1,790,804       7,166,329          8,957,133
Laurel Oaks                                                               -        1,361,553       6,541,980          7,903,533
Parker's Landing                                                 31,415,281       10,178,355      37,868,669         48,047,024
Sugar Mill Creek                                                          -        2,241,880       7,552,520          9,794,400

COLUMBIA SC
Gable Hill                                                                -          824,847       5,307,194          6,132,041
St. Andrews Commons                                                       -        1,428,826       9,371,378         10,800,204
Forestbrook                                                       5,000,000          395,516       2,902,040          3,297,556
Waterford                                                                 -          957,980       6,947,939          7,905,919
Hampton Greene                                                            -        1,363,046      10,118,453         11,481,499
Rivergate                                                                 -        1,122,500      12,055,625         13,178,125

NASHVILLE TN
Legacy Hill                                                               -        1,147,660       5,867,567          7,015,227
Hickory Run                                                               -        1,468,727      11,583,786         13,052,513
Carrington Hills                                                          -        2,117,244               -          2,117,244
Brookridge                                                                -          707,508       5,461,251          6,168,760
Club At Hickory Hollow                                                    -        2,139,774      15,231,201         17,370,975
Breckenridge                                                              -          766,428       7,713,862          8,480,290
Williamsburg                                                              -        1,376,190      10,931,309         12,307,498
Colonnade                                                                 -        1,459,754      16,014,857         17,474,612

MEMPHIS TN
Briar Club                                                                -        1,214,400       6,928,959          8,143,359
Hunters Trace                                                     5,412,083          888,440       6,676,552          7,564,992
Cinnamon Trails                                                           -        1,886,632       7,644,522          9,531,154
The Trails                                                       27,311,519       10,387,416      34,394,843         44,782,259
Dogwood Creek                                                             -        2,771,868      15,673,846         18,445,714

ATLANTA GA
Stanford Village                                                          -          884,500       2,807,839          3,692,339
Griffin Crossing                                                          -        1,509,633       7,544,018          9,053,651
Gwinnett Square                                                   7,150,000        1,924,325       7,376,454          9,300,779
Dunwoody Pointe                                                   5,580,829        2,763,324       6,902,996          9,666,320
Riverwood                                                         4,983,254        2,985,599      11,087,903         14,073,502
Waterford Place                                                           -        1,579,478      10,302,679         11,882,157

SOUTH FLORIDA
Copperfield                                                      12,300,000        4,424,128      20,428,969         24,853,097
Mediterranean Village                                             8,320,000        2,064,788      11,939,113         14,003,901
Cleary Court                                                              -        2,399,848       7,913,450         10,313,298
University Club                                                           -        1,390,220       6,992,620          8,382,840
Polo Chase                                                                -        3,675,276      13,301,853         16,977,129
Pembroke Bay                                                              -        4,442,492      16,664,469         21,106,962

OTHER MARKETS
Jamestown Of St. Matthews, St. Matthews, KY                      11,235,576        3,865,596      14,422,383         18,287,979
Patriot Place, Florence, SC                                       2,200,000          212,500       1,600,757          1,813,257

                                                            Cost of
                                                         Improvements                Gross Amount at
                                                         Capitalized        Which Carried at Close of Period
                                                                           ----------------------------------
                                                          Subsequent            Land and        Buildings          Total
                                                        to Acquisition            Land              and           Carrying
                                                      (Net of Disposals)      Improvements     Improvements      Value (d)
                                                     --------------------------------------------------------------------------
Seville On The Green                                            1,763,132         1,442,318        8,101,492      9,543,810
Arbors @ Lee Vista                                              1,579,430         4,364,804       18,110,760     22,475,563
Heron Lake                                                        921,005         1,591,825       10,063,611     11,655,436
Ashton @ Waterford                                                106,854         3,871,744       17,644,733     21,516,477

TAMPA-ST PETERSBURG-CLEARWATER
Bay Cove                                                        2,759,652         3,272,710        8,994,046     12,266,756
Summit West                                                     2,380,213         2,446,995        6,819,689      9,266,683
Pinebrook                                                       2,917,886         2,001,756        5,154,677      7,156,433
Lakewood Place                                                  1,247,664         1,613,593       11,676,500     13,290,092
Hunters Ridge                                                   1,384,461         2,948,973       11,839,470     14,788,443
Bay Meadow                                                      2,463,507         3,424,786       11,184,772     14,609,557
Cambridge                                                       1,367,588         2,069,587        8,255,134     10,324,721
Laurel Oaks                                                     1,150,392         1,534,328        7,519,597      9,053,925
Parker's Landing                                                  947,078         9,214,278       39,779,824     48,994,102
Sugar Mill Creek                                                  362,264         2,383,861        7,772,803     10,156,664

COLUMBIA SC
Gable Hill                                                      1,347,428         1,184,326        6,295,143      7,479,469
St. Andrews Commons                                             1,615,500         1,851,322       10,564,382     12,415,704
Forestbrook                                                     1,840,654           627,056        4,511,154      5,138,210
Waterford                                                       1,404,693         1,253,454        8,057,158      9,310,612
Hampton Greene                                                  1,362,842         1,871,519       10,972,822     12,844,341
Rivergate                                                       1,105,359         1,430,844       12,852,639     14,283,484

NASHVILLE TN
Legacy Hill                                                     2,733,132         1,419,924        8,328,435      9,748,359
Hickory Run                                                     1,446,005         1,638,812       12,859,706     14,498,518
Carrington Hills                                               24,316,537         2,719,118       23,714,662     26,433,781
Brookridge                                                      1,206,524           922,455        6,452,829      7,375,284
Club At Hickory Hollow                                          1,884,544         2,681,185       16,574,334     19,255,519
Breckenridge                                                      727,711           955,284        8,252,717      9,208,001
Williamsburg                                                    1,240,439         1,537,718       12,010,219     13,547,938
Colonnade                                                         435,493         1,601,222       16,308,882     17,910,104

MEMPHIS TN
Briar Club                                                      1,955,591         1,560,279        8,538,670     10,098,950
Hunters Trace                                                   1,366,817         1,179,599        7,752,210      8,931,809
Cinnamon Trails                                                   (86,708)        2,054,103        7,390,342      9,444,446
The Trails                                                      3,327,549        11,072,164       37,037,644     48,109,808
Dogwood Creek                                                     721,652         2,937,407       16,229,959     19,167,366

ATLANTA GA
Stanford Village                                                1,130,143         1,164,766        3,657,716      4,822,482
Griffin Crossing                                                1,445,351         1,805,742        8,693,260     10,499,002
Gwinnett Square                                                 1,546,548         2,138,004        8,709,323     10,847,327
Dunwoody Pointe                                                 4,394,708         3,305,952       10,755,076     14,061,028
Riverwood                                                       3,396,877         3,340,776       14,129,603     17,470,379
Waterford Place                                                   381,663         1,645,910       10,617,910     12,263,820

SOUTH FLORIDA
Copperfield                                                     1,741,384         4,976,042       21,618,439     26,594,481
Mediterranean Village                                           1,491,518         2,280,874       13,214,545     15,495,419
Cleary Court                                                    1,590,125         2,633,617        9,269,806     11,903,423
University Club                                                 1,710,713         1,758,874        8,334,678     10,093,553
Polo Chase                                                        553,282         3,761,446       13,768,966     17,530,411
Pembroke Bay                                                      610,308         4,630,954       17,086,316     21,717,270

OTHER MARKETS
Jamestown Of St. Matthews, St. Matthews, KY                       716,366         3,941,427       15,062,918     19,004,345
Patriot Place, Florence, SC                                     5,669,543         1,481,436        6,001,363      7,482,800

                                                                                                           Depreciable
                                                                                                             Life of
                                                        Accumulated         Date of         Date             Building
                                                       Depreciation      Construction     Acquired        Component (e)
                                                     ---------------------------------------------------------------------
Seville On The Green                                       1,122,278         1986         10/21/97           35 Years
Arbors @ Lee Vista                                         2,123,136         1991         12/31/97           35 Years
Heron Lake                                                 1,091,328         1989         03/27/98           35 Years
Ashton @ Waterford                                           438,672         2000         05/28/98           35 Years

TAMPA-ST PETERSBURG-CLEARWATER
Bay Cove                                                   3,348,738         1972         12/16/92           35 Years
Summit West                                                2,519,809         1972         12/16/92           35 Years
Pinebrook                                                  2,228,633         1977         09/28/93           35 Years
Lakewood Place                                             3,014,713         1986         03/10/94           35 Years
Hunters Ridge                                              2,765,425         1992         06/30/95           35 Years
Bay Meadow                                                 1,996,174         1985         12/09/96           35 Years
Cambridge                                                  1,293,086         1985         06/06/97           35 Years
Laurel Oaks                                                1,141,059         1986         07/01/97           35 Years
Parker's Landing                                           2,900,441         1991         12/07/98           35 Years
Sugar Mill Creek                                             651,092         1988         12/07/98           35 Years

COLUMBIA SC
Gable Hill                                                 2,650,059         1985         12/04/89           35 Years
St. Andrews Commons                                        3,306,427         1986         05/20/93           35 Years
Forestbrook                                                1,875,622         1974         07/01/93           35 Years
Waterford                                                  2,167,790         1985         07/01/94           35 Years
Hampton Greene                                             2,735,675         1990         08/19/94           35 Years
Rivergate                                                  2,205,971         1989         08/15/96           35 Years

NASHVILLE TN
Legacy Hill                                                2,158,124         1977         11/06/95           35 Years
Hickory Run                                                2,632,416         1989         12/29/95           35 Years
Carrington Hills                                              69,320         1999         12/06/95           35 Years
Brookridge                                                 1,455,483         1986         03/28/96           35 Years
Club At Hickory Hollow                                     2,689,207         1987         02/21/97           35 Years
Breckenridge                                               1,260,622         1986         03/27/97           35 Years
Williamsburg                                               1,477,333         1986         05/20/98           35 Years
Colonnade                                                  1,269,212         1998         01/07/99           35 Years

MEMPHIS TN
Briar Club                                                 2,395,205         1987         10/14/94           35 Years
Hunters Trace                                              2,067,346         1986         10/14/94           35 Years
Cinnamon Trails                                              916,584         1989         01/09/98           35 Years
The Trails                                                 4,280,014         1990         01/09/98           35 Years
Dogwood Creek                                              2,067,610         1997         02/06/98           35 Years

ATLANTA GA
Stanford Village                                           1,912,758         1985         09/26/89           35 Years
Griffin Crossing                                           2,389,006        1987/89       06/08/94           35 Years
Gwinnett Square                                            1,971,405         1985         03/29/95           35 Years
Dunwoody Pointe                                            2,831,981         1980         10/24/95           35 Years
Riverwood                                                  3,141,457         1980         06/26/96           35 Years
Waterford Place                                            1,060,557         1985         04/15/98           35 Years

SOUTH FLORIDA
Copperfield                                                4,576,456         1991         09/21/94           35 Years
Mediterranean Village                                      3,079,124         1989         09/30/94           35 Years
Cleary Court                                               2,258,407        1984/85       11/30/94           35 Years
University Club                                            1,759,178         1988         09/26/95           35 Years
Polo Chase                                                 1,099,810         1991         12/07/98           35 Years
Pembroke Bay                                                 815,485         1989         07/26/99           35 Years

OTHER MARKETS
Jamestown Of St. Matthews, St. Matthews, KY                1,129,765         1968         12/07/98           35 Years
Patriot Place, Florence, SC                                3,644,528         1974         10/23/85           35 Years


                                                                                   Initial Costs
                                                                       -----------------------------------

                                                                          Land and             Buildings              Initial
                                                                            Land                  and               Acquisition
                                             Encumbrances (a) (b)        Improvements         Improvements           Costs (c)
                                             -------------------------------------------------------------------------------------
River Place, Macon, GA                                 5,000,000             1,097,280            7,492,385            8,589,665
Mallards Of Wedgewood, Lakeland, FL                            -               959,284            6,864,666            7,823,950
Greentree, Jacksonville, FL                           12,455,000             1,634,330           11,226,990           12,861,320
Westland, Jacksonville, FL                            12,805,000             1,834,535           14,864,742           16,699,276
Antlers, Jacksonville, FL                                      -             4,034,039           11,192,842           15,226,880
Brantley Pines, Ft. Myers, FL                                  -             1,892,888            8,247,621           10,140,509
Santa Barbara, Naples, FL                                      -             1,134,120            8,019,814            9,153,934
Ashlar, Ft. Myers, FL                                          -             3,952,234           11,718,186           15,670,420
The Groves, Port Orange, FL                                    -               789,953            4,767,055            5,557,008
Lakeside, Port Orange, FL                                      -             2,404,305            6,420,160            8,824,465
Mallards Of Brandywine, Deland, FL                             -               765,949            5,407,683            6,173,632
Lake Washington Downs, Melbourne, FL                           -             1,434,450            4,940,166            6,374,616
International Village, Speedway, IN                            -             3,934,102           11,478,908           15,413,010
Regency Park South, Indianapolis, IN                           -             2,643,025            7,632,098           10,275,123

Western Region:
DALLAS TEXAS
Preston Oaks                                                   -             1,783,626            6,416,374            8,200,000
Preston Trace                                                  -             2,195,500            8,304,500           10,500,000
Rock Creek                                                     -             4,076,680           15,823,320           19,900,000
Windridge                                                      -             3,414,311           14,027,310           17,441,621
Catalina                                                       -             1,543,321            5,631,679            7,175,000
Wimbledon Court                                                -             1,809,183           10,930,306           12,739,489
Lakeridge                                                      -             1,631,350            5,668,650            7,299,999
Summergate                                                     -             1,171,300            3,928,700            5,100,000
Oak Forest                                                     -             5,630,740           23,293,922           28,924,662
Oaks Of Lewisville                                             -             3,726,795           13,563,181           17,289,976
Kelly Crossing                                                 -             2,496,701            9,156,355           11,653,056
Highlands Of Preston                                           -             2,151,056            8,167,630           10,318,686
The Summit                                             5,182,107             1,932,195            9,041,301           10,973,496
Springfield                                            5,167,275             3,074,511            6,823,120            9,897,631

HOUSTON
Woodtrail                                                      -             1,543,000            5,457,000            7,000,000
Park Trails                                                    -             1,144,750            4,105,250            5,250,000
Green Oaks                                                     -             5,313,920           19,626,181           24,940,101
Sky Hawk                                                       -             2,297,741            7,157,965            9,455,706
South Grand At Pecan Grove                            10,418,907             4,058,090           14,755,809           18,813,899
Breakers                                                       -             1,527,467            5,297,930            6,825,397
Braesridge                                             9,092,367             3,048,212           10,961,749           14,009,961
Skylar Pointe                                                  -            3,604,483            11,592,432           15,196,915
Stone Canyon                                                   -               899,515                    -              899,515
Briar Park                                             1,391,437               329,002            2,794,131            3,123,133
Chelsea Park                                           3,192,625             1,991,478            5,787,626            7,779,104
Clear Lake Falls                                       3,054,749             1,090,080            4,534,335            5,624,415
Country Club Place                                     3,475,061               498,632            6,520,172            7,018,804
Arbor Ridge                                            3,734,476             1,688,948            6,684,229            8,373,177
London Park                                            4,455,643             2,018,478            6,667,450            8,685,928
Marymont                                                       -             1,150,696            4,155,411            5,306,107
Nantucket Square                                       2,688,551             1,067,617            4,833,402            5,901,019
Riverway                                               1,181,322               523,457            2,828,282            3,351,739
Riviera Pines                                          3,274,452             1,413,851            6,453,847            7,867,698
The Gallery                                            1,538,994               768,708            3,358,484            4,127,192
Towne Lake                                                     -             1,333,958            5,308,884            6,642,842
The Legend at Park 10                                          -             1,995,011                    -            1,995,011

PHOENIX-MESA AZ
Paradise Falls                                                 -             1,622,700            6,170,800            7,793,500
Vista Point                                                    -             1,587,400            5,612,600            7,200,000
Sierra Palms                                                   -             4,638,950           17,361,050           22,000,000
Northpark Village                                              -             1,519,314           13,536,707           15,056,021

                                                     Cost of                      Gross Amount at
                                                   Improvements           Which Carried at Close of Period
                                                   Capitalized          -----------------------------------
                                                    Subsequent            Land and             Buildings               Total
                                                  to Acquisition            Land                  and                Carrying
                                                (Net of Disposals)      Improvements          Improvements           Value (d)
                                               -----------------------------------------------------------------------------------
River Place, Macon, GA                                 1,898,820            1,717,042             8,771,442           10,488,485
Mallards Of Wedgewood, Lakeland, FL                    1,643,276            1,249,320             8,217,906            9,467,226
Greentree, Jacksonville, FL                            3,575,811            2,270,802            14,166,330           16,437,131
Westland, Jacksonville, FL                             3,506,505            2,607,242            17,598,540           20,205,782
Antlers, Jacksonville, FL                              5,385,491            4,782,830            15,829,541           20,612,372
Brantley Pines, Ft. Myers, FL                          4,861,958              820,127            14,182,340           15,002,467
Santa Barbara, Naples, FL                              1,643,083            1,714,318             9,082,699           10,797,017
Ashlar, Ft. Myers, FL                                 16,111,886            7,593,378            24,188,928           31,782,306
The Groves, Port Orange, FL                            1,725,606            1,443,512             5,839,102            7,282,614
Lakeside, Port Orange, FL                              1,268,820            2,574,381             7,518,904           10,093,285
Mallards Of Brandywine, Deland, FL                     1,099,309              980,636             6,292,306            7,272,941
Lake Washington Downs, Melbourne, FL                   2,039,249            1,750,997             6,662,868            8,413,865
International Village, Speedway, IN                      465,769            3,976,199            11,902,580           15,878,779
Regency Park South, Indianapolis, IN                     496,876            2,688,317             8,083,682           10,771,999

Western Region:
DALLAS TEXAS
Preston Oaks                                             613,050            1,897,501             6,915,549            8,813,050
Preston Trace                                            761,953            2,349,946             8,912,007           11,261,953
Rock Creek                                             4,051,565            4,486,002            19,465,563           23,951,565
Windridge                                              2,568,127            4,001,213            16,008,534           20,009,748
Catalina                                                 609,896            1,648,194             6,136,703            7,784,896
Wimbledon Court                                        2,010,590            2,825,054            11,925,025           14,750,079
Lakeridge                                                845,732            1,776,336             6,369,395            8,145,731
Summergate                                               701,529            1,380,065             4,421,464            5,801,529
Oak Forest                                            10,000,318            6,354,384            32,570,596           38,924,980
Oaks Of Lewisville                                     3,485,698            4,497,320            16,278,354           20,775,674
Kelly Crossing                                         1,442,413            2,965,259            10,130,210           13,095,469
Highlands Of Preston                                   1,607,813            2,463,053             9,463,446           11,926,499
The Summit                                             1,133,379            2,302,119             9,804,756           12,106,875
Springfield                                              992,593            3,260,450             7,629,774           10,890,224

HOUSTON
Woodtrail                                              2,078,334            1,728,597             7,349,737            9,078,334
Park Trails                                              767,844            1,208,921             4,808,923            6,017,844
Green Oaks                                             2,383,195            5,758,011            21,565,285           27,323,296
Sky Hawk                                               1,872,546            2,698,250             8,630,002           11,328,252
South Grand At Pecan Grove                             3,662,938            4,437,828            18,039,009           22,476,837
Breakers                                               2,038,067            1,873,522             6,989,942            8,863,464
Braesridge                                             1,705,322            3,349,650            12,365,633           15,715,283
Skylar Pointe                                          3,757,921            3,657,880            15,296,956           18,954,836
Stone Canyon                                           9,437,829              899,515             9,437,829           10,337,344
Briar Park                                               102,280              333,748             2,891,665            3,225,413
Chelsea Park                                           1,243,271            2,289,122             6,733,253            9,022,375
Clear Lake Falls                                        (308,399)           1,106,162             4,209,854            5,316,016
Country Club Place                                       821,606              643,066             7,197,344            7,840,410
Arbor Ridge                                              148,635            2,029,720             6,492,092            8,521,812
London Park                                            1,374,895            2,299,585             7,761,238           10,060,823
Marymont                                                 378,980            1,158,696             4,526,391            5,685,087
Nantucket Square                                        (686,315)           1,070,242             4,144,462            5,214,704
Riverway                                                 110,364              529,666             2,932,437            3,462,103
Riviera Pines                                            139,734            1,418,444             6,588,988            8,007,432
The Gallery                                               81,922              776,004             3,433,110            4,209,114
Towne Lake                                             1,106,694            1,563,625             6,185,911            7,749,536
The Legend at Park 10                                 11,758,419            2,018,039            11,735,391           13,753,430

PHOENIX-MESA AZ
Paradise Falls                                         2,886,523            1,828,963             8,851,060           10,680,023
Vista Point                                            1,312,937            1,717,158             6,795,779            8,512,937
Sierra Palms                                             437,202            4,733,068            17,704,134           22,437,202
Northpark Village                                      1,565,066            1,819,190            14,801,897           16,621,087

                                                                                                                     Depreciable
                                                                                                                       Life of
                                                     Accumulated            Date of                Date               Building
                                                    Depreciation          Construction           Acquired           Component (e)
                                             ------------------------------------------------------------------------------------
River Place, Macon, GA                               2,642,789                 1988               04/08/94            35 Years
Mallards Of Wedgewood, Lakeland, FL                  2,014,027                 1985               07/27/95            35 Years
Greentree, Jacksonville, FL                          3,822,480                 1986               07/22/94            35 Years
Westland, Jacksonville, FL                           3,723,824                 1990               05/09/96            35 Years
Antlers, Jacksonville, FL                            3,680,912                 1985               05/28/96            35 Years
Brantley Pines, Ft. Myers, FL                        3,813,602                 1986               08/11/94            35 Years
Santa Barbara, Naples, FL                            2,497,039                 1987               09/01/94            35 Years
Ashlar, Ft. Myers, FL                                1,057,966               1999/2000            12/24/97            35 Years
The Groves, Port Orange, FL                          1,541,419                 1989               12/13/95            35 Years
Lakeside, Port Orange, FL                            1,134,518                 1985               07/01/97            35 Years
Mallards Of Brandywine, Deland, FL                     995,046                 1985               07/01/97            35 Years
Lake Washington Downs, Melbourne, FL                 2,289,531                 1984               09/24/93            35 Years
International Village, Speedway, IN                  1,181,011                 1968               12/07/98            35 Years
Regency Park South, Indianapolis, IN                   787,026                 1968               12/07/98            35 Years

Western Region:
DALLAS TEXAS
Preston Oaks                                         1,094,475                 1980               12/31/96            35 Years
Preston Trace                                        1,349,446                 1984               12/31/96            35 Years
Rock Creek                                           3,126,426                 1979               12/31/96            35 Years
Windridge                                            2,697,391                 1980               12/31/96            35 Years
Catalina                                               991,890                 1982               12/31/96            35 Years
Wimbledon Court                                      1,709,266                 1983               12/31/96            35 Years
Lakeridge                                            1,088,847                 1984               12/31/96            35 Years
Summergate                                             742,151                 1984               12/31/96            35 Years
Oak Forest                                           3,492,985                1996/98             12/31/96            35 Years
Oaks Of Lewisville                                   2,872,774                 1983               03/27/97            35 Years
Kelly Crossing                                       1,525,524                 1984               06/18/97            35 Years
Highlands Of Preston                                 1,138,410                 1985               03/27/98            35 Years
The Summit                                           1,148,319                 1983               03/27/98            35 Years
Springfield                                            951,962                 1985               03/27/98            35 Years

HOUSTON
Woodtrail                                            1,531,754                 1978               12/31/96            35 Years
Park Trails                                            806,361                 1983               12/31/96            35 Years
Green Oaks                                           3,160,374                 1985               06/25/97            35 Years
Sky Hawk                                             1,459,437                 1984               05/08/97            35 Years
South Grand At Pecan Grove                           2,486,549                 1985               09/26/97            35 Years
Breakers                                             1,094,679                 1985               09/26/97            35 Years
Braesridge                                           1,744,605                 1982               09/26/97            35 Years
Skylar Pointe                                        2,208,604                 1979               11/20/97            35 Years
Stone Canyon                                            92,201                 1998               12/17/97            35 Years
Briar Park                                             293,683                 1987               03/27/98            35 Years
Chelsea Park                                           838,680                 1983               03/27/98            35 Years
Clear Lake Falls                                       478,335                 1980               03/27/98            35 Years
Country Club Place                                     760,109                 1985               03/27/98            35 Years
Arbor Ridge                                            775,659                 1983               03/27/98            35 Years
London Park                                            983,269                 1983               03/27/98            35 Years
Marymont                                               489,885                 1983               03/27/98            35 Years
Nantucket Square                                       448,369                 1983               03/27/98            35 Years
Riverway                                               365,345                 1985               03/27/98            35 Years
Riviera Pines                                          633,214                 1979               03/27/98            35 Years
The Gallery                                            297,475                 1968               03/27/98            35 Years
Towne Lake                                             799,194                 1984               03/27/98            35 Years
The Legend at Park 10                                2,507,695                 1998               05/19/98            35 Years

PHOENIX-MESA AZ
Paradise Falls                                       1,325,764                 1986               12/31/96            35 Years
Vista Point                                          1,149,554                 1986               12/31/96            35 Years
Sierra Palms                                         2,552,849                 1996               12/31/96            35 Years
Northpark Village                                    1,801,053                 1983               03/27/98            35 Years


SCHEDULE III
Summary of Real Estate Owned

                                                         Initial Costs
                                                ------------------------------
                                                                                                       Cost of
                                                                                                     Improvements
                                                                                   Total              Capitalized
                                                    Land and       Buildings      Initial            Subsequent of
                                                      Land            and        Acquisition      to Acquisitioning
                           Encumbrances (a) (b)  Improvements    Improvements    Costs (c)        (Net of Disposals)
                           -------------------------------------------------------------------------------------------------
Stonegate                            3,703,436         735,036       7,939,875     8,674,911           688,203
Finisterra                                   -       1,273,798      26,392,207    27,666,005           307,400
La Privada                          15,382,899       7,303,161      18,507,617    25,810,778         1,774,951
Terracina                                    -       3,757,224      34,780,779    38,538,002         5,632,594
Woodland Park                                -       3,016,907       6,706,473     9,723,380           909,752
Sierra Foothills                             -       2,728,172               -     2,728,172        18,794,624

FORT WORTH-ARLINGTON TEXAS
Autumnwood                                   -       2,412,180       8,687,820    11,100,000           915,690
Cobblestone                                  -       2,925,372      10,527,738    13,453,110         1,895,732
Pavillion                                    -       4,428,258      19,032,881    23,461,139         1,016,798
Oak Park                                     -       3,966,129      22,227,701    26,193,830          (385,559)
Southern Oaks                                -       1,565,000       5,335,000     6,900,000           754,590
Hunter's Ridge                               -       1,613,000       5,837,000     7,450,000           790,643
Parc Plaza                                   -       1,683,531       5,279,123     6,962,654         1,339,056
Summit Ridge                         4,810,550       1,725,508       6,308,032     8,033,540         1,367,077
Greenwood Creek                      4,768,424       1,958,378       8,551,018    10,509,396         1,127,672
Derby Park                           7,218,225       3,121,153      11,764,974    14,886,127           773,887
Aspen Court                          1,913,309         776,587       4,944,947     5,721,534           779,032

SAN ANTONIO
Promontory Pointe                            -       7,548,219      28,051,781    35,600,000         2,431,666
The Bluffs                                   -       1,901,146       6,898,854     8,800,000         1,340,666
Ashley Oaks                                  -       4,590,782      16,809,218    21,400,000           471,484
Sunflower                                    -       2,209,000       7,891,000    10,100,000           582,262
Escalante                            3,913,340       2,701,992      24,033,196    26,735,188         1,581,401
Cimarron City                        3,097,104         487,906       4,534,793     5,022,699           683,210
Kenton                               7,288,859       2,344,962       8,917,376    11,262,338         1,676,573
Peppermill                           4,306,088         773,405       6,873,146     7,646,551         2,034,322
Sunset Canyon                        8,753,297       3,201,039      10,669,680    13,870,720         3,780,981
Audubon                              4,550,997         771,037       6,123,917     6,894,953         2,189,611
Grand Cypress                        5,717,531         749,341       8,609,353     9,358,694           945,959
Inn @ Los Patios                             -       3,005,300      11,544,700    14,550,000        (1,489,487)

SAN FRANCISO-SAN JOSE, CA
2000 Post Street                             -       9,860,627      44,577,506    54,438,133           418,708
Birch Creek                          7,670,278       4,365,315      16,695,509    21,060,824           943,028
Highlands Of Marin                           -       5,995,838      24,868,350    30,864,188           485,151
Marina Playa                        14,038,935       6,224,383      23,916,283    30,140,666         1,111,432

MONTEREY PENINSULA SALINAS CA
Boronda Manor                                -       1,946,423       8,981,742    10,928,165           160,447
Garden Court                                 -         888,038       4,187,950     5,075,988            96,563
Glenridge                                    -         415,284       1,952,934     2,368,218            23,297
Harding Park Townhomes                       -         549,393       2,051,322     2,600,715            43,215
Cambridge Court                              -       2,020,384       9,226,038    11,246,422           357,691
Laurel Tree                                  -       1,303,902       5,115,356     6,419,258            86,900
Pine Grove                                   -       1,383,161       5,783,993     7,167,154            55,604
Santanna                                     -         957,079       4,026,117     4,983,196            72,924
The CaprI                                    -       1,018,493       3,657,274     4,675,767            10,620
The Pointe At Harden Ranch                   -       6,388,446      23,853,534    30,241,980           418,154
The Pointe At Northridge                     -       2,043,736       8,028,443    10,072,179           176,828
The Pointe At Westlake                       -       1,329,064       5,334,004     6,663,068            96,931

SOUTHERN CALIFORNIA
Pine Avenue                          5,936,948       2,158,423       8,887,744    11,046,167           205,027
The Grand Resort                             -       8,884,151      35,706,606    44,590,757           592,157
Grand Terrace                                -       2,144,340       6,594,615     8,738,955         1,106,879
Windward Point                               -       1,767,970       7,117,879     8,885,849           209,105
Rancho Vallecitos                            -       3,302,967      10,877,286    14,180,254           307,466

                                      Gross Amount at
                             Which Carried at Close of Period
                           ------------------------------------                                                      Depreciable
                                   Land and       Buildings        Total                                               Life of
                                     Land            and         Carrying      Accumulated      Date of       Date     Building
                                  Improvements   Improvements    Value (d)    Depreciation    Construction  Acquired Component (e)
                           --------------------------------------------------------------------------------------------------------
Stonegate                              882,503      8,480,611     9,363,114        962,027       1978       03/27/98      35 Years
Finisterra                           1,323,764     26,649,641    27,973,405      2,609,099       1997       03/27/98      35 Years
La Privada                           7,837,148     19,748,581    27,585,729      2,123,550       1987       03/27/98      35 Years
Terracina                            4,518,578     39,652,018    44,170,597      4,269,616       1984       05/28/98      35 Years
Woodland Park                        3,224,377      7,408,755    10,633,132        949,074       1979       06/09/98      35 Years
Sierra Foothills                     2,790,490     18,732,306    21,522,796      3,361,015       1998       02/18/98      35 Years

FORT WORTH-ARLINGTON TEXAS
Autumnwood                           2,651,258      9,364,432    12,015,690      1,529,956       1984       12/31/96      35 Years
Cobblestone                          3,133,873     12,214,969    15,348,842      1,981,408       1984       12/31/96      35 Years
Pavillion                            4,636,529     19,841,408    24,477,937      2,920,587       1979       12/31/96      35 Years
Oak Park                             4,819,330     20,988,942    25,808,271      3,487,599      1982/98     12/31/96      35 Years
Southern Oaks                        1,611,548      6,043,043     7,654,590      1,016,813       1982       12/31/96      35 Years
Hunter's Ridge                       1,804,518      6,436,124     8,240,643      1,083,635       1992       12/31/96      35 Years
Parc Plaza                           2,105,315      6,196,395     8,301,710      1,007,442       1986       10/30/97      35 Years
Summit Ridge                         2,185,547      7,215,071     9,400,618      1,054,202       1983       03/27/98      35 Years
Greenwood Creek                      2,112,719      9,524,349    11,637,068      1,127,923       1984       03/27/98      35 Years
Derby Park                           3,516,461     12,143,553    15,660,014      1,636,578       1984       03/27/98      35 Years
Aspen Court                          1,064,382      5,436,185     6,500,566        664,644       1986       03/27/98      35 Years

SAN ANTONIO
Promontory Pointe                    7,799,506     30,232,160    38,031,666      4,623,781       1997       12/31/96      35 Years
The Bluffs                           2,083,860      8,056,806    10,140,666      1,587,336       1978       12/31/96      35 Years
Ashley Oaks                          4,682,717     17,188,767    21,871,484      2,467,545       1993       12/31/96      35 Years
Sunflower                            2,323,773      8,358,488    10,682,262      1,338,170       1980       12/31/96      35 Years
Escalante                            2,740,785     25,576,804    28,316,589        863,882     1986/2000    04/16/98      35 Years
Cimarron City                          584,930      5,120,979     5,705,909        534,650       1983       04/16/98      35 Years
Kenton                               2,446,157     10,492,755    12,938,912      1,131,061       1983       04/16/98      35 Years
Peppermill                             938,875      8,741,998     9,680,873      1,014,174       1984       04/16/98      35 Years
Sunset Canyon                        3,554,592     14,097,108    17,651,701      1,752,202       1984       04/16/98      35 Years
Audubon                              1,014,250      8,070,314     9,084,564      1,064,677       1985       04/16/98      35 Years
Grand Cypress                          797,794      9,506,858    10,304,653        969,564       1995       04/16/98      35 Years
Inn @ Los Patios                     3,005,300     10,055,213    13,060,513        819,281       1990       08/15/98      35 Years

SAN FRANCISO-SAN JOSE, CA
2000 Post Street                     9,914,645     44,942,195    54,856,841      2,402,441       1987       12/07/98      35 Years
Birch Creek                          4,606,705     17,397,147    22,003,852      1,184,643       1968       12/07/98      35 Years
Highlands Of Marin                   6,072,433     25,276,906    31,349,339      1,534,986       1991       12/07/98      35 Years
Marina Playa                         6,438,679     24,813,419    31,252,098      1,732,828       1971       12/07/98      35 Years

MONTEREY PENINSULA SALINAS
Boronda Manor                        1,960,729      9,127,883    11,088,612        545,192       1979       12/07/98      35 Years
Garden Court                           891,220      4,281,331     5,172,551        261,684       1973       12/07/98      35 Years
Glenridge                              415,744      1,975,771     2,391,515         84,998       1989       12/07/98      35 Years
Harding Park Townhomes                 553,422      2,090,508     2,643,930        145,868       1984       12/07/98      35 Years
Cambridge Court                      2,073,342      9,530,771    11,604,113        623,208       1974       12/07/98      35 Years
Laurel Tree                          1,311,767      5,194,391     6,506,158        372,825       1977       12/07/98      35 Years
Pine Grove                           1,387,287      5,835,471     7,222,758        365,774       1963       12/07/98      35 Years
Santanna                               958,195      4,097,925     5,056,120        258,888       1989       12/07/98      35 Years
The CaprI                            1,018,544      3,667,843     4,686,387        273,774       1973       12/07/98      35 Years
The Pointe At Harden Ranch           6,407,856     24,252,278    30,660,134      1,705,826       1986       12/07/98      35 Years
The Pointe At Northridge             2,052,115      8,196,892    10,249,007        565,569       1979       12/07/98      35 Years
The Pointe At Westlake               1,330,060      5,429,939     6,759,999        370,779       1975       12/07/98      35 Years

SOUTHERN CALIFORNIA
Pine Avenue                          2,165,035      9,086,159    11,251,194        590,361       1987       12/07/98      35 Years
The Grand Resort                     8,929,646     36,253,268    45,182,914      2,624,356       1971       12/07/98      35 Years
Grand Terrace                        2,225,774      7,620,061     9,845,834        399,479       1986       06/30/99      35 Years
Windward Point                       1,797,416      7,297,537     9,094,954        484,513       1983       12/07/98      35 Years
Rancho Vallecitos                    3,359,502     11,128,217    14,487,719      2,652,866       1988       10/13/99      35 Years


                                                                                   Initial Costs                     Total
                                                                    ------------------------------------------
                                                                          Land and             Buildings             Initial
                                                                            Land                  and              Acquisition
                                              Encumbrances (a) (b)      Improvements         Improvements           Costs (c)
                                            ----------------------------------------------------------------------------------
SEATTLE-BELLEVUE-EVERETT, WA
Arbor Terrace                                      7,310,472             1,453,342           11,994,972           13,448,314
Crowne Pointe                                      4,849,763             2,486,252            6,437,256            8,923,508
Hilltop                                            4,500,269             2,173,969            7,407,628            9,581,597

OTHER MARKETS
Pecan Grove, Austin, TX                                    -             1,406,750            5,293,250            6,700,000
Anderson Mill, Austin, TX                                  -             3,134,669           11,170,376           14,305,045
Turtle Creek, Little Rock, AR                              -             1,913,177            7,086,823            9,000,000
Shadow Lake, Little Rock, AR                               -             2,523,670            8,976,330           11,500,000
Desert Springs, Tuscon, AZ                         4,503,289             1,118,402            7,094,431            8,212,833
Posada Del Rio, Tucson, AZ                                 -               843,748            4,288,097            5,131,845
Sunset Point, Las Vegas., NV                               -             4,295,050           15,704,950           20,000,000
Alvarado, Albuquerque, NM                                  -             1,930,229            5,969,771            7,900,000
Dorado Heights, Albuquerque, NM                    5,094,107             1,567,762            6,555,395            8,123,157
Greensview, Aurora, CO                                     -             2,974,024           12,489,598           15,463,622
Mountain View, Aurora, CO                                  -             6,401,851           21,569,403           27,971,254
Lancaster Commons, Salem, OR                               -             2,485,291            7,451,165            9,936,456
Tualatin Heights, Tualatin, OR                     8,815,206             3,272,585            9,134,089           12,406,674
University Park, Portland, OR                              -             3,007,202            8,191,307           11,198,509
Evergreen Park Apartments, Vancouver, WA           5,221,064             3,878,138            9,973,051           13,851,189
Aspen Creek, Puyallup, WA                          6,911,618             1,177,714            9,115,789           10,293,503
Beaumont, Tacoma, WA                              10,029,283             2,339,132           12,559,224           14,898,356
Campus Commons North, Pullman, WA                  6,395,923               305,143            9,867,157           10,172,300
Campus Commons South, Pullman, WA                  2,789,726               838,324            3,005,784            3,844,108
Foothills Tennis Village, Roseville, CA                    -             3,617,507           14,542,028           18,159,535
Woodlake Village, Sacramento, CA                  16,417,907             6,772,438           26,966,750           33,739,188
Silk Oak, Fresno, CA                                       -             2,324,562            4,566,446            6,891,008

                                            --------------------------------------------------------------------------------
                                                 723,741,843         $ 593,021,296      $ 2,642,956,043      $ 3,235,977,339
                                            ================================================================================

REAL ESTATE UNDER DEVELOPMENT
NEW APARTMENT COMMUNITIES
Kildaire Farms Land, Cary, NC                              -             2,846,027            8,520,815           11,366,841
Red Stone Ranch, Cedar Park, TX                            -             1,896,723            6,699,073            8,595,796

ADDITIONS TO EXISTING COMMUNITIES
Meridian II, Carrollton, TX                                -             1,547,129            1,111,644            2,658,773
Manor At England Run III, Fredericksburg, VA               -                     -              369,673              369,673
Greensview Phase II, Aurora, CO                            -               540,915            2,654,551            3,195,466

LAND HELD FOR FUTURE DEVELOPMENT                           -            33,632,506                    -           33,632,506


                                            --------------------------------------------------------------------------------
                                               $           -         $  40,463,300      $    19,355,756      $    59,819,056
                                            ================================================================================

COMMERCIAL PROPERTY
Richmond Corporate                                         -               245,332            6,351,847            6,597,179

COMMERCIAL PROPERTY HELD FOR DISPOSITION
Hanover Village, Richmond, VA                              -             1,623,910                    -            1,623,910
Gloucester Exchange, Gloucester, VA                        -               403,688            2,278,553            2,682,241
Tri-County, Bristol, TN                                    -               275,580              900,281            1,175,861
Pacific South Center, Seattle, WA                  3,323,349             1,000,000            4,000,000            5,000,000

APARTMENTS HELD FOR DISPOSITION
Twin Coves, Glen Burnie, MD                        3,506,254               912,771            2,904,304            3,817,075

                                            --------------------------------------------------------------------------------
                                               $   6,829,603         $   4,461,281      $    16,434,985      $    20,896,266
                                            ================================================================================

        TOTAL REAL ESTATE OWNED                $ 866,114,652         $ 637,945,877      $ 2,678,746,784      $ 3,316,692,661
                                            ================================================================================

                                                      Cost of
                                                   Improvements                 Gross Amount at
                                                   Capitalized           Which Carried at Close of Period
                                                                    -------------------------------------------
                                                    Subsequent            Land and             Buildings               Total
                                                  to Acquisition            Land                  and                Carrying
                                                (Net of Disposals)      Improvements          Improvements           Value (d)
                                            ----------------------------------------------------------------------------------
SEATTLE-BELLEVUE-EVERETT, WA
Arbor Terrace                                         500,291            1,478,876            12,469,729           13,948,605
Crowne Pointe                                         696,326            2,513,293             7,106,541            9,619,834
Hilltop                                               322,600            2,240,945             7,663,252            9,904,197

OTHER MARKETS
Pecan Grove, Austin, TX                               361,436            1,454,170             5,607,266            7,061,436
Anderson Mill, Austin, TX                           2,804,234            3,468,727            13,640,552           17,109,279
Turtle Creek, Little Rock, AR                         914,589            2,185,212             7,729,378            9,914,589
Shadow Lake, Little Rock, AR                        1,220,904            2,743,019             9,977,885           12,720,904
Desert Springs, Tuscon, AZ                            572,830            1,133,669             7,651,994            8,785,663
Posada Del Rio, Tucson, AZ                           (390,935)             938,382             3,802,529            4,740,910
Sunset Point, Las Vegas., NV                        1,117,716            4,443,738            16,673,978           21,117,716
Alvarado, Albuquerque, NM                             477,067            1,968,286             6,408,781            8,377,067
Dorado Heights, Albuquerque, NM                       534,807            1,626,546             7,031,418            8,657,964
Greensview, Aurora, CO                                415,868            2,450,457            13,429,033           15,879,490
Mountain View, Aurora, CO                           1,028,829            6,268,502            22,731,581           29,000,083
Lancaster Commons, Salem, OR                          266,092            2,504,452             7,698,096           10,202,548
Tualatin Heights, Tualatin, OR                        636,663            3,368,922             9,674,414           13,043,337
University Park, Portland, OR                         251,868            3,012,564             8,437,813           11,450,377
Evergreen Park Apartments, Vancouver, WA              487,162            3,911,688            10,426,663           14,338,351
Aspen Creek, Puyallup, WA                             210,308            1,262,651             9,241,160           10,503,811
Beaumont, Tacoma, WA                                  269,726            2,378,591            12,789,491           15,168,082
Campus Commons North, Pullman, WA                  (1,833,580)             328,100             8,010,620            8,338,720
Campus Commons South, Pullman, WA                    (615,842)             895,743             2,332,524            3,228,266
Foothills Tennis Village, Roseville, CA               382,482            3,698,804            14,843,214           18,542,017
Woodlake Village, Sacramento, CA                    1,068,668            6,945,744            27,862,112           34,807,856
Silk Oak, Fresno, CA                                  188,467            2,365,843             4,713,631            7,079,475

                                            ---------------------------------------------------------------------------------
                                                $ 516,133,397       $  667,754,240       $ 3,084,357,496      $ 3,752,110,736
                                            =================================================================================

REAL ESTATE UNDER DEVELOPMENT
NEW APARTMENT COMMUNITIES
Kildaire Farms Land, Cary, NC                               -            2,846,027             8,520,815           11,366,841
Red Stone Ranch, Cedar Park, TX                             -            1,896,723             6,699,073            8,595,796

ADDITIONS TO EXISTING COMMUNITIES
Meridian II, Carrollton, TX                                 -            1,547,129             1,111,644            2,658,773
Manor At England Run III, Fredericksburg, VA          548,058              541,667               376,064              917,731
Greensview Phase II, Aurora, CO                             -              540,915             2,654,551            3,195,466

LAND HELD FOR FUTURE DEVELOPMENT                            -           33,632,506                     -           33,632,506


                                            ---------------------------------------------------------------------------------
                                                $     548,058       $   41,004,967       $    19,362,147      $    60,367,114
                                            =================================================================================

COMMERCIAL PROPERTY
Richmond Corporate                                    265,542              248,554             6,614,167            6,862,721

COMMERCIAL PROPERTY HELD FOR DISPOSITION
Hanover Village, Richmond, VA                               -            1,103,600               520,310            1,623,910
Gloucester Exchange, Gloucester, VA                   513,391              602,442             2,593,190            3,195,632
Tri-County, Bristol, TN                             1,280,670              364,123             2,092,408            2,456,531
Pacific South Center, Seattle, WA                       7,772            1,000,000             4,007,772            5,007,772

APARTMENTS HELD FOR DISPOSITION
Twin Coves, Glen Burnie, MD                           878,599            1,025,146             3,670,528            4,695,674

                                            ---------------------------------------------------------------------------------
                                                $   2,945,975       $    4,343,864       $    19,498,376      $    23,842,241
                                            =================================================================================

        TOTAL REAL ESTATE OWNED                 $ 519,627,429       $  713,103,071       $ 3,123,218,020      $ 3,836,320,090
                                            =================================================================================

                                                                                                               Depreciable
                                                                                                                 Life of
                                                      Accumulated      Date of                Date              Building
                                                     Depreciation    Construction           Acquired           Component (e)
                                                 ---------------------------------------------------------------------------
SEATTLE-BELLEVUE-EVERETT, WA
Arbor Terrace                                         1,362,540         1996                03/27/98             35 Years
Crowne Pointe                                           715,809         1987                12/07/98             35 Years
Hilltop                                                 615,624         1985                12/07/98             35 Years

OTHER MARKETS
Pecan Grove, Austin, TX                                 748,248         1984                12/31/96             35 Years
Anderson Mill, Austin, TX                             2,722,711         1984                03/27/97             35 Years
Turtle Creek, Little Rock, AR                         1,273,301         1985                12/31/96             35 Years
Shadow Lake, Little Rock, AR                          1,679,685         1984                12/31/96             35 Years
Desert Springs, Tuscon, AZ                              773,792         1985                03/27/98             35 Years
Posada Del Rio, Tucson, AZ                              525,779         1980                03/27/98             35 Years
Sunset Point, Las Vegas., NV                          2,417,657         1990                12/31/96             35 Years
Alvarado, Albuquerque, NM                             1,039,555         1984                12/31/96             35 Years
Dorado Heights, Albuquerque, NM                         755,411         1986                03/27/98             35 Years
Greensview, Aurora, CO                                  859,321         1987                12/07/98             35 Years
Mountain View, Aurora, CO                             1,857,474         1973                12/07/98             35 Years
Lancaster Commons, Salem, OR                            732,532         1992                12/07/98             35 Years
Tualatin Heights, Tualatin, OR                          930,089         1989                12/07/98             35 Years
University Park, Portland, OR                           778,197         1987                03/27/98             35 Years
Evergreen Park Apartments, Vancouver, WA              1,106,331         1988                03/27/98             35 Years
Aspen Creek, Puyallup, WA                               684,955         1996                12/07/98             35 Years
Beaumont, Tacoma, WA                                  1,366,911         1996                06/14/00             35 Years
Campus Commons North, Pullman, WA                     1,323,144         1972                03/27/98             35 Years
Campus Commons South, Pullman, WA                       173,657         1972                03/27/98             35 Years
Foothills Tennis Village, Roseville, CA                 986,712         1988                12/07/98             35 Years
Woodlake Village, Sacramento, CA                      1,953,472         1979                12/07/98             35 Years
Silk Oak, Fresno, CA                                    687,450         1985                12/07/98             35 Years

                                            -------------------
                                                 $  506,838,438
                                            ===================

REAL ESTATE UNDER DEVELOPMENT
NEW APARTMENT COMMUNITIES
Kildaire Farms Land, Cary, NC                                 -         2000                05/25/00
Red Stone Ranch, Cedar Park, TX                               -         2000                06/14/00

ADDITIONS TO EXISTING COMMUNITIES
Meridian II, Carrollton, TX                                   -         2000                01/27/98
Manor At England Run III, Fredericksburg, VA                  -         2000                05/04/95
Greensview Phase II, Aurora, CO                            (849)        2000                12/07/98

LAND HELD FOR FUTURE DEVELOPMENT                            962            -                       -


                                            -------------------
                                                 $          114
                                            ===================

COMMERCIAL PROPERTY
Richmond Corporate                                       33,177         1999                11/30/99             35 Years

COMMERCIAL PROPERTY HELD FOR DISPOSITION
Hanover Village, Richmond, VA                                 -            -                06/30/86             35 Years
Gloucester Exchange, Gloucester, VA                     764,072         1974                11/12/87             35 Years
Tri-County, Bristol, TN                                 733,831        1976/79              01/21/81             35 Years
Pacific South Center, Seattle, WA                           227         1965                08/28/86             35 Years

APARTMENTS HELD FOR DISPOSITION
Twin Coves, Glen Burnie, MD                           1,035,753         1974                08/16/94             35 Years

                                            -------------------
                                                 $    2,567,060
                                            ===================

        TOTAL REAL ESTATE OWNED                  $  509,405,611
                                            ===================


SCHEDULE III
Summary of Real Estate Owned

(a) There are 88 communities encumbererd by fixed rate debt aggregating $723.7 million. The amount of this debt is included in the encumbrances shown for the individual markets. There are 27 communities encumbered by fixed rate debt aggregating $135.5 million that is not included in the encumbrances shown for the individual markets or in real estate held for disposition.
(b) Includes a fair market value adjustment of $10.2 milion.
(c) Includes a purchase price reallocation of $8.5 million.
(d) The aggregate cost for federal income tax purposes was approximately $3.0 billion at December 31, 2000.

(e) The depreciable life for all buildings is 35 years.


EXHIBIT 3(b)
UNITED DOMINION REALTY TRUST, INC.

RESTATEMENT OF BYLAWS

1. The name of the corporation is UNITED DOMINION REALTY TRUST, INC..

2. The text of the restated Bylaws is attached hereto and is incorporated herein by reference.

3. The restatement does not contain an amendment to the Bylaws requiring shareholder approval.

4. The Board of Directors of the corporation adopted the restatement by a unanimous vote at its meeting held on February 12, 2001.

UNITED DOMINION REALTY TRUST, INC.

                         By:        /s/ Katheryn E. Surface
                              ----------------------------------
                                    Katheryn E. Surface
                                    Senior Vice President

Dated: February 15, 2001

1

AMENDED AND RESTATED BYLAWS
of
UNITED DOMINION REALTY TRUST, INC.

ARTICLE I

Stockholders= and Directors= Meetings

The annual meeting of the stockholders of the corporation shall be held in May of each year on the date and at the time and place fixed by the Board of Directors. The date, time and place of all meetings of stockholders shall be stated in the notice of the meeting. Meetings of the stockholders shall be held whenever called by the Chairman of the Board, the President, a majority of the directors or stockholders holding at least 1/10 of the number of shares of stock entitled to vote then outstanding.

The holders of a majority of the outstanding shares of stock entitled to vote shall constitute a quorum at any meeting of the stockholders. Less than a quorum may adjourn the meeting to a fixed time and place, no further notice of any adjourned meting being required. Each stockholder shall be entitled to one vote in person or by proxy for each share entitled to vote then outstanding in his name on the books of the corporation.

The transfer books for shares of stock of the corporation may be closed by order of the Board of Directors for not exceeding 70 days for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof or entitled to receive payment of any dividend or in order to make a determination of stockholders for any other purpose. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of stockholders, such date to be not more than 70 days preceding the date on which the particular action requiring such determination of the stockholders is to be taken.

The Chairman of the Board shall preside over all meetings of the stockholders. If he is not present, the Vice Chairman of the Board shall preside. If neither the Chairman of the Board nor the Vice Chairman of the Board is present, the President shall preside, or, if none be present, a Chairman shall be elected by the meeting. The Secretary of the corporation shall act as Secretary of all the meetings, if he be present. If he is not present, the Chairman shall appoint a Secretary of the meeting. The Chairman of the meeting may appoint one or more inspectors of the election to determine the qualification of voters, the validity of proxies and the results of ballots.

2

ARTICLE II

Board of Directors

The Board of Directors shall be chosen at the annual meeting of the stockholders or any special meeting held in lieu thereof. The number of directors shall be eleven. This number may be increased or decreased at any time by amendment of these Bylaws, but shall always be a number of not less than three. Directors need not be stockholders. Directors shall hold office until removed or until the next annual meeting of the stockholders or until their successors are elected. A majority of the directors shall constitute a quorum. Less than a quorum may adjourn the meeting to a fixed time and place, no further notice of any adjourned meeting being required. A director may not stand for re-election if he has attained age 70 on or before the date of the annual meeting at which directors are elected.

The stockholders at any meeting, by a vote of the holders of a majority of all the shares of stock at the time outstanding and having voting power, may remove any director and fill the vacancy. Any vacancy arising among the directors, including a vacancy resulting from an increase by not more than two in the number of directors, may be filled by the remaining directors unless sooner filed by the stockholders in meeting.

Meetings of the Board of Directors shall be held at times fixed by resolution of the Board upon the call of the Chairman of the Board of Directors, the President or a majority of the members of the Board. Notice of any meeting not held at a time fixed by a resolution of the Board shall be given to each director at least two days before the meeting at his residence or business address or by delivering such notice to him or by telephoning or telegraphing it to him at least one day before the meeting. Any such notice shall contain the time and place of the meeting. Meetings may be held without notice if all of the directors are present or those not present waive notice before or after the meeting.

ARTICLE III

Executive Committee

The Board of Directors may designate by resolution adopted by a majority of all the directors two or more of the directors to constitute an Executive Committee. The Executive Committee, when the Board of Directors is not in session, may to the extent permitted by law exercise all of the powers of the Board of Directors. The Executive Committee may make rules for the holding and conduct of its meetings, the notice thereof required and the keeping of its records. Directors who are not members of the Executive committee shall be entitled to notice of and to attend meetings of the Executive Committee but shall not be entitled to vote or otherwise participate in the proceedings at such meetings.

3

ARTICLE IV

Officers

The Board of Directors, promptly after its election in each year, shall appoint a Chairman of the Board of Directors, a Vice Chairman of the Board of Directors and a President (all of whom shall be directors) and a Secretary, and may appoint a Treasurer and one or more Vice Presidents and such other officers or assistant officers as it may deem proper. Any officer may hold more than one office. The term of an officer or assistant officer expires at the first meeting of the Board of Directors held after the annual meeting of the stockholders next following such officer's or assistant officer's appointment, but notwithstanding expiration of his term, an officer or assistant officer continues to serve until removed or until his successor is appointed. Any officer or assistant officer may be removed at any time with or without cause by the Board of Directors. Vacancies among the officers and assistant officers shall be filled by the Board of Directors. The President shall be the chief executive officer of the corporation. All officers and assistant officers shall have such duties as generally pertain to their respective offices as well as such powers and duties as from time to time may be delegated to them by the Board of Directors.

ARTICLE V

Stock Certificates

Each stockholder shall be entitled to a certificate or certificates of stock in such form as may be approved by the Board of Directors, which shall be signed manually or by facsimile by the Chairman of the Board, the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and which may bear the seal of the corporation or a facsimile thereof.

All transfers of stock of the corporation shall be made upon its books by surrender of the certificate for the shares transferred accompanied by an assignment in writing by the holder and may be accomplished either by the holder in person or by a duly authorized attorney in fact.

In case of the loss, mutilation or destruction of a certificate of stock, a duplicate certificate may be issued upon such terms not in conflict with law as the Board of Directors may prescribe.

The Board of Directors may also appoint one or more transfer agents and registrars and may require stock certificates to be countersigned by a transfer agent or registered by a registrar or may require stock certificates to be both countersigned by a transfer agent and registered by a registrar. If certificates for stock of the corporation are signed by a transfer agent or by a registrar (other than the corporation itself or one of its employees), the signature thereon of the officers of the corporation and the seal of the corporation thereon may be facsimiles, engraved or printed. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the corporation, such certificate or certificates may nevertheless be issued and

4

delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers of the corporation.

ARTICLE VI

Seal

The seal of the corporation shall be a flat-faced circular die, of which there may be any number of counterparts, with the word "SEAL" and the name of the corporation engraved thereon.

ARTICLE VII

Voting of Stock Held

Unless otherwise provided by a vote of the Board of Directors, the Chairman of the Board, the President or any Vice President may appoint attorneys to vote any stock in any other corporation owned by the corporation or may attend any meeting of the holders of stock of such corporation and vote such shares in person.

ARTICLE VIII

Fiscal Year

The fiscal year of the corporation shall be the calendar year.

5

EXHIBIT 4(ii)(g)

CREDIT AGREEMENT

Dated as of November 14, 2000

among

UNITED DOMINION REALTY TRUST, INC.,
as Borrower,

UNITED DOMINION REALTY, L.P.

and Certain Other Subsidiaries and Affiliates of the Borrower, as Guarantors,

THE LENDERS NAMED HEREIN

and

FIRST UNION NATIONAL BANK,
as Administrative Agent


FIRST UNION SECURITIES, INC.
as Joint Lead Arranger and Sole Book Manager

BANC OF AMERICA SECURITIES LLC
as Joint Lead Arranger

BANK OF AMERICA, N.A.
as Syndication Agent

KEYBANK NATIONAL ASSOCIATION
as Documentation Agent


TABLE OF CONTENTS

SECTION 1 DEFINITIONS...................................................   1
          -----------
       1.1 Definitions..................................................   1
           -----------
       1.2 Computation of Time Periods..................................  18
           ---------------------------
       1.3 Accounting Terms.............................................  18
            ----------------

SECTION 2 CREDIT FACILITIES.............................................  19
          -----------------
      2.1  Loans........................................................  19
           -----
      2.2  [Intentionally Omitted]......................................  20
      2.3  [Intentionally Omitted]......................................  20
      2.4  [Intentionally Omitted]......................................  20

SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES................  20
          ----------------------------------------------
      3.1  Default Rate.................................................  20
           ------------
      3.2  Extension and Conversion.....................................  20
           ------------------------
      3.3  Prepayments..................................................  21
           -----------
      3.4  [Intentionally Omitted]......................................  21
      3.5  Fees.........................................................  21
           ----
      3.6  Capital Adequacy.............................................  22
           ----------------
      3.7  Inability To Determine Interest Rate.........................  22
           ------------------------------------
      3.8  Illegality...................................................  22
           ----------
      3.9  Requirements of Law..........................................  23
           -------------------
      3.10 Taxes........................................................  24
           -----
      3.11 Indemnity....................................................  25
           ---------
      3.12 Pro Rata Treatment...........................................  25
           ------------------
      3.13 Sharing of Payments..........................................  26
           -------------------
      3.14 Payments, Computations, Etc..................................  26
           ---------------------------
      3.15 Evidence of Debt.............................................  28
           ----------------
      3.16 Extension of Termination Date................................  28
           -----------------------------

SECTION 4 GUARANTY......................................................  29
          --------
      4.1  The Guarantee................................................  29
           -------------
      4.2  Obligations Unconditional....................................  29
           -------------------------
      4.3  Reinstatement................................................  30
           -------------
      4.4  Certain Additional Waivers...................................  31
           --------------------------
      4.5  Remedies.....................................................  31
           --------
      4.6  Rights of Contribution.......................................  31
           ----------------------
      4.7  Continuing Guarantee.........................................  32
           --------------------
      4.8  Release of Guarantors by Administrative Agent................  32
           ---------------------------------------------

SECTION 5 CONDITIONS....................................................  32
          ----------
      5.1  Conditions to Closing........................................  32
           ---------------------
      5.2  Conditions to All Extensions of Credit.......................  34
           --------------------------------------
SECTION 6 REPRESENTATIONS AND WARRANTIES................................  34
          ------------------------------

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      6.1   Financial Condition.........................................  35
            -------------------
      6.2   No Material Adverse Changes.................................  35
            ---------------------------
      6.3   Organization; Existence; Compliance with Law................  35
            --------------------------------------------
      6.4   Power; Authorization; Enforceable Obligations...............  35
            ---------------------------------------------
      6.5   No Legal Bar................................................  36
            ------------
      6.6   No Material Litigation......................................  36
            ----------------------
      6.7   No Default..................................................  36
            ----------
      6.8   Ownership of Property; Liens................................  36
            ----------------------------
      6.9   Taxes.......................................................  36
            -----
      6.10  ERISA.......................................................  37
            -----
      6.11  Governmental Regulations, Etc...............................  38
            -----------------------------
      6.12  Subsidiaries................................................  39
            ------------
      6.13  Purpose of Extensions of Credit.............................  39
            -------------------------------
      6.14  Environmental Matters.......................................  39
            ---------------------

SECTION 7 AFFIRMATIVE COVENANTS.........................................  40
          ---------------------
      7.1   Financial Statements........................................  40
            --------------------
      7.2   Certificates; Other Information.............................  41
            -------------------------------
      7.3   Notices.....................................................  42
            -------
      7.4   Payment of Obligations......................................  43
            ----------------------
      7.5   Conduct of Business and Maintenance of Existence............  43
            ------------------------------------------------
      7.6   Maintenance of Property; Insurance..........................  43
            ----------------------------------
      7.7   Inspection of Property; Books and Records; Discussions......  43
            ------------------------------------------------------
      7.8   Environmental Laws..........................................  44
            ------------------
      7.9   Financial Covenants.........................................  44
            -------------------
      7.10  Agency Fees.................................................  46
            -----------
      7.11  Additional Guaranties.......................................  46
            ---------------------
      7.12  Ownership of Subsidiaries...................................  47
            -------------------------
      7.13  Use of Proceeds.............................................  47
            ---------------

SECTION 8 NEGATIVE COVENANTS............................................  47
          ------------------
      8.1   Limitations on Debt.........................................  47
            -------------------
      8.2   Restriction on Liens........................................  47
            --------------------
      8.3   Consolidations, Mergers and Sales and Purchases of Assets...  48
            ---------------------------------------------------------
      8.4   Loans and Investments.......................................  49
            ---------------------
      8.5   Transactions with Affiliates................................  49
            ----------------------------
      8.6   Transactions with Other Persons regarding this Agreement....  50
            --------------------------------------------------------
      8.7   Limitation on Certain Restrictions on Subsidiaries..........  50
            --------------------------------------------------

SECTION 9 EVENTS OF DEFAULT.............................................  50
          -----------------
      9.1   Events of Default...........................................  50
            -----------------
      9.2   Acceleration; Remedies......................................  53
            ----------------------

SECTION 10 AGENCY PROVISIONS............................................  53
           -----------------
      10.1  Appointment.................................................  53
            -----------
      10.2  Delegation of Duties........................................  54
            --------------------
      10.3  Exculpatory Provisions......................................  54
            ----------------------

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     10.4   Reliance on Communications..................................  54
            --------------------------
     10.5   Notice of Default...........................................  55
            -----------------
     10.6   Non-Reliance on Administrative Agent and Other Lenders......  55
            ------------------------------------------------------
     10.7   Indemnification.............................................  56
            ---------------
     10.8   Administrative Agent in its Individual Capacity.............  56
            -----------------------------------------------
     10.9   Successor Administrative Agent..............................  56
            ------------------------------

SECTION 11 MISCELLANEOUS................................................  57
           -------------
     11.1   Notices.....................................................  57
            -------
     11.2   Right of Set-Off............................................  58
            ----------------
     11.3   Benefit of Agreement........................................  58
            --------------------
     11.4   No Waiver; Remedies Cumulative..............................  60
            ------------------------------
     11.5   Payment of Expenses, etc....................................  61
            ------------------------
     11.6   Amendments, Waivers and Consents............................  61
            --------------------------------
     11.7   Counterparts................................................  63
            ------------
     11.8   Headings....................................................  63
            --------
     11.9   Survival....................................................  63
            --------
     11.10  Governing Law; Submission to Jurisdiction; Venue............  63
            ------------------------------------------------
     11.11  Severability................................................  64
            ------------
     11.12  Entirety....................................................  64
            --------
     11.13  Binding Effect; Termination.................................  64
            ---------------------------
     11.14  Source of Funds.............................................  64
            ---------------
     11.15  Conflict....................................................  65
            --------

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SCHEDULES

Schedule 2.1(a)          Schedule of Lenders and Commitments
Schedule 2.1(b)(i)       Form of Notice of Borrowing
Schedule 2.1(e)          Form of Note
Schedule 3.2             Form of Notice of Extension/Conversion
Schedule 5.1(e)(v)       Officer's Certificate
Schedule 6.3             Qualifications Concerning Organization, Existence and
                           Compliance with Law
Schedule 6.6             Material Litigation
Schedule 6.12            Subsidiaries
Schedule 7.2(b)          Form of Officer's Compliance Certificate
Schedule 7.11            Form of Joinder Agreement
Schedule 8.7             REMICs and Other Special Subsidiaries
Schedule 11.1            Schedule of Lender's Addresses
Schedule 11.3(b)         Form of Assignment and Acceptance

-iv-

CREDIT AGREEMENT

THIS CREDIT AGREEMENT dated as of November 14, 2000 (the "Credit Agreement"), is by and among UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (the "Borrower"), UNITED DOMINION REALTY, L.P., a Virginia limited partnership and the other subsidiaries and affiliates identified on the signature pages hereto and such other subsidiaries and affiliates as may from time to time become Guarantors hereunder in accordance with the provisions hereof (the "Guarantors"), the lenders named herein and such other lenders as may become a party hereto (the "Lenders") and FIRST UNION NATIONAL BANK, as Administrative Agent (in such capacity, the "Administrative Agent").

W I T N E S S E T H

WHEREAS, the Borrower has requested that the Lenders provide $100 million in aggregate amount of term loans to the Borrower for the purposes hereinafter set forth;

WHEREAS, the Guarantors acknowledge that such term loans inure to the mutual benefit of the Borrower and the Guarantors;

WHEREAS, the Lenders have agreed to make the requested term loans available to the Borrower on the terms and conditions hereinafter set forth;

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1 DEFINITIONS

1.1 Definitions.

As used in this Credit Agreement, the following terms shall have the meanings specified below unless the context otherwise requires:

"Additional Credit Party" means each Person that becomes a Guarantor after the Closing Date by execution of a Joinder Agreement.

"Administrative Agent" means First Union National Bank and its successors and assigns.

"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.

"Applicable Percentage" means for any day, the rate per annum set forth below opposite the applicable rating for the Borrower's senior unsecured (non-credit enhanced) long term debt then in effect, it being understood that the Applicable Percentage for (i) Base Rate Loans shall be the percentage set forth under the column "Base Rate Margin", and (ii) Eurodollar Loans shall be the percentage set forth under the column "Eurodollar Margin":

Pricing           S&P              Moody's      Eurodollar     Base Rate
 Level          Rating              Rating        Margin        Margin
 -----          ------              ------        ------      ---------
  I               A-                  A3          0.750%         0%
  II             BBB+                Baa1         0.925%         0%
  III             BBB                Baa2          1.05%         0%
  IV             BBB-                Baa3          1.20%         0%
  V           below BBB-          below Baa3       1.80%         0%
              or unrated          or unrated

The numerical classification set forth under the column "Pricing Level" shall be established based on the better of ratings by S&P and Moody's for the Borrower's senior unsecured (non-credit enhanced) long term debt; provided, however, that if the ratings of S&P and Moody's are two or more pricing levels apart, then the Applicable Percentage shall be the average of the two Applicable Percentages corresponding to the Pricing Levels for the applicable ratings of S&P and Moody's. The Applicable Percentage shall be determined and adjusted on the date five (5) Business Days after each change in debt rating. Adjustments in the Applicable Percentage shall be effective as to all Loans from the date of adjustment. The Administrative Agent shall promptly notify the Lenders of changes in the Applicable Percentage. Adjustments in the Applicable Percentage shall be effective as to existing Extensions of Credit as well as new Extensions of Credit made thereafter.

"Attributed Principal Amount" means, on any day, with respect to any Securitization Transaction entered into by any member of the Consolidated Group, the aggregate amount (with respect to any such transaction, the "Invested Amount") paid to, or borrowed by, such Person as of such date under such Securitization Transaction, minus the aggregate amount received by the applicable Receivables Financier and applied to the reduction of the Invested Amount under such Securitization Transaction.

"Bank of America Credit Agreement" means that certain Credit Agreement dated as of June 1, 2000 by and among the Borrower, United Dominion Realty, L.P. and certain other subsidiaries and affiliates of the Borrower, the lenders party thereto, and Bank of America, N.A., as Administrative Agent.

"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

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"Bankruptcy Event" means, with respect to any Person, the occurrence of any of the following with respect to such Person: (i) a court or governmental agency having jurisdiction in the premises shall enter a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or ordering the winding up or liquidation of its affairs; or (ii) there shall be commenced against such Person an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or any case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or for the winding up or liquidation of its affairs, and such involuntary case or other case, proceeding or other action shall remain undismissed, undischarged or unbonded for a period of ninety (90) consecutive days; or (iii) such Person shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or make any general assignment for the benefit of creditors; or (iv) such Person shall be unable to, or shall admit in writing its inability to, pay its debts generally as they become due.

"Base Rate" means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1%

or (b) the Prime Rate in effect on such day. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable after due inquiry to ascertain the Federal Funds Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms hereof, the Base Rate shall be determined without regard to clause (a) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively.

"Base Rate Loan" means any Loan bearing interest at a rate determined by reference to the Base Rate.

"Borrower" means the Person identified as such in the heading hereof, together with any permitted successors and assigns.

"Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by law to close, except that, when used in connection with a Eurodollar Loan, such day shall also be a day on which dealings between banks are carried on in U.S. dollar deposits in London, England.

"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

-3-

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 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).

"Change of Control" means the occurrence of any of the following events: (i) any Person or two or more Persons acting in concert shall have acquired beneficial ownership, directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, or control over, voting stock of the Borrower (or other securities convertible into such voting stock) representing 35% or more of the combined voting power of all voting stock of the Borrower, or (ii) during any period of up to 24 consecutive months, commencing after the Closing Date, individuals who at the beginning of such 24 month period were directors of the Borrower (together with any new director whose election by the Borrower's Board of Directors or whose nomination for election by the Borrower's shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors of the Borrower then in office. As used herein, "beneficial ownership" shall have the meaning provided in Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934.

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"Closing Date" means the date hereof.

"Code" means the Internal Revenue Code of 1986, as amended, and any

successor statute thereto, as interpreted by the rules and regulations issued thereunder, in each case as in effect from time to time. References to Sections of the Code shall be construed also to refer to any successor sections.

"Commitment" means, with respect to each Lender, the commitment of such Lender to make a Loan to the Borrower on the Effective Date in the principal amount specified with respect to such Lender in Schedule 2.1(a) in accordance with the provisions of Section 2.1(a).

"Commitment Percentage" means, for each Lender, a fraction (expressed as a decimal) the numerator of which is the Commitment of such Lender at such time and the denominator of which is the aggregate amount of the Commitments of all Lenders at such time. The initial Commitment Percentage of each Lender is set out on Schedule 2.1(a).

"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 Adjusted Tangible Net Worth" means at any date:

(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 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,

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 credits 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 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 (i) the aggregate rental and other income from the operation of such Realty during such period; minus (ii) 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 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.

"Consolidated Net Operating Income from Unencumbered Realty" means, for any period, an amount equal to (i) the aggregate rental and other income from the operation of Consolidated Unencumbered Realty during such period; minus (ii) all expenses and other proper charges incurred in connection with the operation of Consolidated Unencumbered Realty
(including, without limitation, real estate taxes 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; minus (iii) a reserve equal to $62.50 per apartment unit per quarter ($250 per apartment unit per year) for such period.

"Consolidated Net Worth" means total stockholders' equity for the Consolidated Group on a consolidated basis determined in accordance with GAAP applied on a consistent basis.

"Consolidated REO" shall have the meaning ascribed to such term in Section 7.11(a) hereof.

"Consolidated Secured Debt" means for the Consolidated Group on a consolidated basis, all secured Consolidated Funded Debt.

"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

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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 Total Realty" means, for the Consolidated Group on a consolidated basis, the undepreciated cost of all Realty, whether improved or not.

"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 contained in Section 7.9(f), 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. Notwithstanding the foregoing, the value of Consolidated Unencumbered Realty shall be determined without including (or otherwise giving credit to) any Realty owned by a Non- Guarantor Subsidiary if (A) the inclusion of such Realty would cause the portion of Consolidated Unencumbered Realty represented by Non-Guarantor Subsidiaries, as of the relevant date of determination, to exceed five percent (5%) of Consolidated Unencumbered Realty or (B) such Non-Guarantor Subsidiary is an obligor, as of the relevant date of determination, with respect to any unsecured Debt (other than those items of Debt set forth in clauses (iii) and (iv) of the definition of Debt).

"Consolidated Unimproved Realty" means, for the Consolidated Group on a consolidated basis, all raw unimproved land held for current or future development. For purposes hereof, property under development where construction and development is in progress shall not be considered to be unimproved to the extent that completed buildings are available for rent and are at least 75% leased.

"Consolidated Unsecured Debt" means, for the Consolidated Group on a consolidated basis, all unsecured Consolidated Funded Debt.

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"Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any material agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.

"Credit Documents" means a collective reference to this Credit Agreement, the Notes, each Joinder Agreement, and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto.

"Credit Party" means any of the Borrower and the Guarantors.

"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 the 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 or which arise in connection with forward equity transactions, (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 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).

"Default" means any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

"Defaulting Lender" means, at any time, any Lender that, at such time,
(i) has failed to make an Extension of Credit required pursuant to the terms of this Credit Agreement, (ii) has failed to pay to the Administrative Agent or any Lender an amount owed by such Lender pursuant to the terms of the Credit Agreement or any other of the Credit Documents, or (iii) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar proceeding.

"Dollars" and "$" means dollars in lawful currency of the United

States of America.

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"Domestic Credit Party" means any Credit Party which is incorporated or organized under the laws of any State of the United States or the District of Columbia.

"Domestic Subsidiary" means any Subsidiary which is incorporated or organized under the laws of any State of the United States or the District of Columbia.

"Effective Date" means the later of: (a) the Closing Date; and (b) the date on which all of the conditions precedent set forth in Section 5.1 and 5.2 shall have been fulfilled or waived in writing by the Required Lenders.

"Eligible Assignee" means (i) a Lender; (ii) an affiliate of a Lender; and (iii) any other commercial bank, financial institution, institutional lender or "accredited investor" (as defined in Regulation D of the Securities and Exchange Commission) with (a) total assets of at least $10 billion; (b) a long term unsecured debt rating of BBB+ or better from S&P or its equivalent and (c) an office in the United States. Neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.

"Environmental Laws" means any and all lawful and applicable Federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

"Equity Transaction" means, with respect to any member of the Consolidated Group, any issuance of shares of its capital stock or other equity interest, other than an issuance (i) to a member of the Consolidated Group or (ii) in connection with exercise by a present or former employee, officer or director under a stock incentive plan, stock option plan or other equity-based compensation plan or arrangement.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. References to Sections of ERISA shall be construed also to refer to any successor sections.

"ERISA Affiliate" means an entity which is under common control with any Credit Party within the meaning of Section 4001(a)(14) of ERISA, or is a member of a group which includes the Borrower and which is treated as a single employer under Sections 414(b) or (c) of the Code.

"ERISA Event" means (i) with respect to any Plan, the occurrence of a Reportable Event or the substantial cessation of operations (within the meaning of Section 4062(e) of ERISA); (ii) the withdrawal by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a substantial

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employer (as such term is defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan; (iii) the distribution of a notice of intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to terminate or the actual termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan;
(vi) the complete or partial withdrawal of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for imposition of a lien under Section 302(f) of ERISA exist with respect to any Plan; or (viii) the adoption of an amendment to any Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA.

"Eurodollar Loan" means any Loan bearing interest at a rate determined by reference to the Eurodollar Rate.

"Eurodollar Rate" means, for the Interest Period for each Eurodollar Loan comprising part of the same borrowing (including conversions, extensions and renewals), a per annum interest rate determined pursuant to the following formula:

Eurodollar Rate = Interbank Offered Rate


1 - Eurodollar Reserve Percentage

"Eurodollar Reserve Percentage" means for any day, that percentage (expressed as a decimal) which is in effect from time to time under Regulation D as the maximum reserve requirement (including, without limitation, any basic, supplemental, emergency, special, or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Loans is determined), whether or not Lender has any Eurocurrency liabilities subject to such reserve requirement at that time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and as such shall be deemed subject to reserve requirements without benefits of credits for proration, exceptions or offsets that may be available from time to time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Eurodollar Reserve Percentage.

"Event of Default" means such term as defined in Section 9.1.

"Extension of Credit" means, as to any Lender, the making of a Loan by such Lender.

"Facility Fee" shall have the meaning given such term in Section 3.5(a).

"Federal Funds Rate" means, for any day, the rate of interest per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (A) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate

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on such transactions on the next preceding Business Day and (B) if no such rate is so published on such next preceding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

"Fees" means all fees payable pursuant to Section 3.5.

"First Union" means First Union National Bank and its successors.

"Foreign Credit Party" means a Credit Party which is not a Domestic

Credit Party.

"Foreign Subsidiary" means a Subsidiary which is not a Domestic

Subsidiary.

"Funds From Operations" for any period, with respect to any Person, shall have the meaning given to such term in, and shall be calculated in accordance with, the "white paper" issued in March 1995 by the National Association of Real Estate Investment Trusts.

"GAAP" means generally accepted accounting principles in the United

States applied on a consistent basis and subject to the terms of Section 1.3 hereof.

"Governmental Authority" means any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

"Guarantee" by any Person, means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or- pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning.

"Guaranteed Obligations" means, as to each Guarantor, without duplication, all obligations of the Borrower to the Lenders and the Administrative Agent, whenever arising, under this Credit Agreement, the Notes or the Credit Documents (including interest accruing after a Bankruptcy Event, regardless of whether such interest is allowed as a claim under the Bankruptcy Code).

"Guarantor" means each of those Persons identified as a "Guarantor" on the signature pages hereto, and each other Person which may hereafter become a Guarantor by execution of a Joinder Agreement, together with their successors and permitted assigns.

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"Insurance Company Debt" means Debt owed by the Borrower with respect to the 7.98% Notes due March 2000 - 2003 pursuant to that certain Indenture dated as of February 24, 1993 among the Borrower, CIGNA Principal Mutual Life Insurance Co., and Aid Association for Lutherans, 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.

"Interbank Offered Rate" means, for the Interest Period for each Eurodollar Loan comprising part of the same borrowing (including conversions, extensions and renewals), a per annum interest rate (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the rate of interest, determined by the Administrative Agent on the basis of the offered rates for deposits in dollars for a period of time corresponding to such Interest Period (and commencing on the first day of such Interest Period), appearing on Telerate Page 3750 (or, if, for any reason, Telerate Page 3750 is not available, the Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London time) two (2) Business Days before the first day of such Interest Period. As used herein, "Telerate Page 3750" means the display designated as page 3750 by Dow Jones Telerate, Inc. (or such other page as may replace such page on that service for the purpose of displaying the British Bankers Association London interbank offered rates) and "Reuters Screen LIBO Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks).

"Interest Payment Date" means (i) as to any Base Rate Loan, the last day of each calendar month and the Termination Date and (ii) as to any Eurodollar Loan, the last day of each Interest Period for such Loan, the date of repayment of principal of such Loan and the Termination Date, and in addition where the applicable Interest Period is more than three months, then also the date three months from the beginning of the Interest Period, and each three months thereafter. If an Interest Payment Date falls on a date which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day.

"Interest Period" means as to any Eurodollar Loan, a period of one, two, three, four or six month's duration, as the Borrower may elect, commencing in each case, on the date of the borrowing (including conversions, extensions and renewals); provided, however, (A) if any Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then such Interest Period shall end on the next preceding Business Day), (B) no Interest Period shall extend beyond the Termination Date, and (C) in the case of Eurodollar Loans,

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where an Interest Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Interest Period is to end, such Interest Period shall end on the last day of such calendar month.

"Invested Amount" shall have the meaning given such term in the definition of Attributed Principal Amount.

"Investment", in any Person, means any loan or advance to such Person, any purchase or other acquisition of any capital stock, warrants, rights, options, obligations or other securities of, or equity interest in, such Person, any capital contribution to such Person or any other investment in such Person, including, without limitation, any Guarantee incurred for the benefit of such Person.

"Joinder Agreement" means a Joinder Agreement substantially in the form of Schedule 7.11 hereto, executed and delivered by an Additional Credit Party in accordance with the provisions of Section 7.11.

"Lenders" means each of the Persons identified as a "Lender" on the signature pages hereto, and their successors and assigns.

"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" or "Loans" shall have the meaning given such term in Section 2.1.

"Material Adverse Effect" means a material adverse effect on (i) the condition (financial or otherwise), operations, business, assets, liabilities or prospects of the Consolidated Group taken as a whole, (ii) the ability of the Credit Parties taken as a whole to perform any material obligation under the Credit Documents to which they are parties or (iii) the rights and remedies of the Lenders or the Borrower under the Credit Documents.

"Materials of Environmental Concern" means any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Laws, including, without limitation, polychlorinated biphenyls and urea-formaldehyde insulation.

"Minority Interests" 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, if necessary,

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to reflect any changes from the book value of such common stock required by the foregoing method of valuing Minority Interests in preferred stock.

"Moody's" means Moody's Investors Service, Inc., or any successor or assignee of the business of such Borrower in the business of rating securities.

"Mortgage Debt" of any Person means at any date the aggregate principal amount of all Debt of such Person secured by a Lien on any real property owned or leased by it.

"Multiemployer Plan" means a Plan which is a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.

"Multiple Employer Plan" means a Plan which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate and at least one employer other than the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate are contributing sponsors.

"Non-Excluded Taxes" means such term as is defined in Section 3.10.

"Note" or "Notes" means the promissory notes of the Borrower in favor of each of the Lenders evidencing the Loans in substantially the form attached as Schedule 2.1(e), individually or collectively, as appropriate, as such promissory notes may be amended, modified, supplemented, extended, renewed or replaced from time to time.

"Notice of Borrowing" means a written notice of borrowing in substantially the form of Schedule 2.1(b)(i), as required by Section 5.1.

"Notice of Extension/Conversion" means the written notice of extension or conversion in substantially the form of Schedule 3.2, as required by Section 3.2.

"Operating Partnership" means United Dominion Realty, L.P., together with any permitted successors and assigns.

"PBGC" means the Pension Benefit Guaranty Corporation established

pursuant to Subtitle A of Title IV of ERISA and any successor thereof.

"Permitted Investments" means Investments which are either (i) cash and Cash Equivalents; (ii) Investments consisting of stock, obligations, securities or other property received in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors; (iii)
acquisitions and other Investments permitted by Section 8.3(c)(ii) or which do not cause a Default or Event of Default under Section 7.9(i)(ii), as appropriate; (iv) Investments by a member of the Consolidated Group or an Affiliate of a member of the Consolidated Group in connection with a Permitted Securitization Transaction; and (v) Investments by a member of the Consolidated Group in and to a Credit Party.

"Permitted Securitization Transaction" means any Securitization Transaction which (i) the structure and documentation for such Securitization Transaction are reasonably satisfactory to the Administrative Agent and the Required Lenders, (ii) the terms of such

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Securitization Transaction, including the discount applicable to the Receivables which are subject of such financing and any termination events, are (in the good faith understanding of the Administrative Agent and the Required Lenders) consistent with those prevailing in the market at the time of commitment thereto for similar transactions involving a receivables originator/servicer of similar credit quality and a receivables pool or other similar characteristics and (iii) the documentation for such Securitization Transaction shall not be amended or modified in any manner which is materially adverse to the interests of the Lenders without the prior written consent of the Administrative Agent and the Required Lenders.

"Person" means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise (whether or not incorporated) or any Governmental Authority.

"Plan" means any employee benefit plan (as defined in Section 3(3) of

ERISA) which is covered by ERISA and with respect to which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of Section 3(5) of ERISA.

"Prime Rate" means the rate of interest per annum publicly announced from time to time by First Union as its prime rate in effect at its principal office in Charlotte, North Carolina, with each change in the Prime Rate being effective on the date such change is publicly announced as effective (it being understood and agreed that the Prime Rate is a reference rate used by First Union in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit by First Union to any debtor).

"Pro Forma Basis" means, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the four fiscal-quarter period ending as of the most recent fiscal quarter end preceding the date of such transaction with respect to which the Administrative Agent and the Lenders have received the officer's certificate in accordance with the provisions of Section 7.2(b). As used herein, "transaction" means and includes (i) any corporate merger or consolidation as referred to in Section 8.3(a), and (ii) any acquisition of capital stock or securities or any purchase, lease or other acquisition of property as referred to in Section 8.3(c).

"Property" means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

"Realty" means all real property and interests therein, together with all improvements thereon.

"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

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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.

"Receivables Financier" means, in connection with a Securitization Transaction, the Person which provides financing for such transaction whether by purchase, loan or otherwise in respect of Receivables.

"Register" shall have the meaning given such term in Section 11.3(c).

"Regulation T, U, or X" means Regulation T, U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

"REIT" means a real estate investment trust as defined in Sections

856-860 of the Code.

"Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Materials of Environmental Concern).

"REMIC" means a real estate mortgage investment conduit as defined in Section 7701 of the Code.

"Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the notice requirement has been waived by regulation.

"Required Lenders" means Lenders having at least sixty-six and two- thirds percent (66 2/3%) of the aggregate principal amount of the Loans outstanding; provided that outstanding principal amount of Loans owing to, a Defaulting Lender shall be excluded for purposes hereof in making a determination of Required Lenders.

"Requirement of Law" means, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or Regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its material property is subject.

"Responsible Officer" means the Chief Financial Officer, the

Controller, the Senior Vice President of Finance or the Treasurer.

"S&P" means Standard & Poor's Ratings Group, a division of The McGraw

Hill Companies, Inc., or any successor or assignee of the business of such division in the business of rating securities.

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"Securitization Subsidiary" shall have the meaning provided in the definition of "Securitization Transaction".

"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 interests 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.

"Single Employer Plan" means any Plan which is covered by Title IV of

ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.

"Subordinated Debt" means any Debt which by its terms is specifically subordinated in right of payment to the prior payment of the obligations of the Credit Parties under this Credit Agreement and the other Credit Documents on terms and conditions satisfactory to the Required Lenders.

"Subordinated Funded Debt" means at any date all unsecured Debt (i) no part of the principal of which is required to be paid (whether by way of mandatory sinking fund, mandatory redemption or otherwise) prior to the payment in full of the Loans hereunder and (ii) the payment of the principal of and interest on which, and any other obligations to the holder of such Debt, is subordinated to the prior payment in full of the Loans hereunder (including interest accruing after the date of commencement of any proceeding under any bankruptcy, insolvency, or similar law in which such Person is a debtor).

"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.

"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 from 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

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sum of (i) one hundred percent (100%) of the GAAP value of the land associated with such Realty plus (ii) an amount equal to one hundred

percent (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 percent (100%) of the Consolidated Group's pro rata share of the GAAP value of any asset contributed to or otherwise invested in joint ventures; provided, however, that, in calculating Tangible Fair Market Value of Assets, no credit shall be given to any portion of the foregoing components of Tangible Fair Market Value of Assets that exceeds the corresponding maximum amount permitted for such component pursuant to clauses (iii) through (vii) of Section 7.9(i).

"Termination Date" means May 14, 2003, or if extended pursuant to the terms of this Agreement, such later date as to which the Termination Date may be extended.

"Wholly-Owned Subsidiary" means as to any Person, any Subsidiary all of the voting stock or other similar voting interests are owned directly or indirectly by such Person. Unless otherwise provided, references to "Wholly-Owned Subsidiary" shall mean Wholly-Owned Subsidiaries of the Borrower.

1.2 Computation of Time Periods.

For purposes of computation of periods of time hereunder, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."

1.3 Accounting Terms.

Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall be prepared, in accordance with GAAP applied on a consistent basis. Financial statements, certificates and reports delivered hereunder shall be accompanied by a description of any changes in application of accounting principles and an estimation of the effects thereof. All calculations made for the purposes of determining compliance with this Credit Agreement shall (except as otherwise expressly provided herein) be made by application of GAAP applied on a basis consistent with the most recent annual or quarterly financial statements delivered pursuant to Section 7.1 hereof (or, prior to the delivery of the first financial statements pursuant to Section 7.1 hereof, consistent with the annual audited financial statements referenced in Section 6.1 hereof); provided, however, if (a) the Borrower shall object to determining such compliance on such basis at the time of delivery of such financial statements due to any change in GAAP or the rules promulgated with respect thereto or (b) the Administrative Agent or the Required Lenders shall so object in writing within 30 days after delivery of such financial statements, then in either case such calculations shall be made on a basis consistent with the most recent financial statements delivered by the Borrower to the Lenders as to which no such objection shall have been made.

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SECTION 2 CREDIT FACILITIES

2.1 Loans.

(a) Term Loans. Subject to the terms and conditions hereof, each Lender severally agrees to make a term loan (a "Loan") to the Borrower on the

Effective Date in the amount of such Lender's Commitment for the purposes hereinafter set forth. Loans may consist of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower may request, and if repaid, a Loan may not be reborrowed hereunder.

(b) Availability of Loan Proceeds. Each Lender will make the proceeds of its Loan available to the Administrative Agent for the account of the Borrower as specified in Section 3.14(a), or in such other manner as the Administrative Agent may specify in writing, by 2:30 P.M. (Charlotte, North Carolina time) on the Effective Date in Dollars and in funds immediately available to the Administrative Agent. Such proceeds will then be made available to the Borrower by the Administrative Agent by crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent.

(c) Repayment. The principal amount of all Loans shall be due and payable in full on the Termination Date.

(d) Interest. Subject to the provisions of Section 3.1,

(i) Base Rate Loans. During such periods as Loans shall be comprised in whole or in part of Base Rate Loans, such Base Rate Loans shall bear interest at a per annum rate equal to the Base Rate plus the

Applicable Percentage;

(ii) Eurodollar Loans. During such periods as Loans shall be comprised in whole or in part of Eurodollar Loans, such Eurodollar Loans shall bear interest at a per annum rate equal to the Eurodollar Rate plus

the Applicable Percentage.

Interest on Loans shall be payable in arrears on each applicable Interest Payment Date (or at such other times as may be specified herein).

(e) Notes. The Loans shall be evidenced by a duly executed Note in favor of each Lender.

(f) Maximum Number of Eurodollar Loans. The Borrower will be limited to a maximum number of three (3) Eurodollar Loans outstanding at any time. For purposes hereof, Eurodollar Loans with separate or different Interest Periods will be considered as separate Eurodollar Loans even if their Interest Periods expire on the same date.

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2.2 [Intentionally Omitted].

2.3 [Intentionally Omitted].

2.4 [Intentionally Omitted].

SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES

3.1 Default Rate.

Upon the occurrence, and during the continuance, of an Event of Default, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate 2% greater than the rate which would otherwise be applicable (or if no rate is applicable, whether in respect of interest, fees or other amounts, then 2% greater than the Base Rate).

3.2 Extension and Conversion.

Subject to the terms of Section 5.2, the Borrower shall have the option, on any Business Day, to extend existing Loans into a subsequent permissible Interest Period or to convert Loans into Loans of another interest rate type; provided, however, that (i) except as provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans only on the last day of the respective Interest Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate Loans may be converted into Eurodollar Loans, only if no Default or Event of Default is in existence on the date of extension or conversion, (iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to the terms of the definition of "Interest Period" set forth in Section 1.1 and shall be in a minimum aggregate principal amount of $5,000,000, in the case of Eurodollar Loans, or $1,000,000 in the case of Base Rate Loans, and integral multiples of $100,000 in excess thereof, and (iv) any request for extension or conversion of a Eurodollar Loan which shall fail to specify an Interest Period shall be deemed to be a request for an Interest Period of one month. Each such extension or conversion shall be effected by the Borrower by giving a Notice of Extension/Conversion (or telephone notice promptly confirmed in writing) to the Administrative Agent (x) prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan, and (y) on the third Business Day prior to, in the case of the extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed extension or conversion, specifying the date of the proposed extension or conversion, the Loans to be so extended or converted, the types of Loans into which such Loans are to be converted and, if appropriate, the applicable Interest Periods with respect thereto; provided that, with respect to clause (x) above, in the case of telephone notice given prior to 11:00 A.M. (Charlotte, North Carolina time), the Borrower shall have until 12:00 Noon (Charlotte, North Carolina time) to deliver the confirmatory written notice. Each request for extension or conversion shall be irrevocable and shall constitute a representation and warranty by the Borrower of the matters specified in subsections (a) through (e) of Section 5.2. In the event the Borrower fails to request the extension of any Eurodollar Loan in accordance with this Section, then the Interest Period for such Eurodollar Loan shall be automatically extended for one month at

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the end of the current Interest Period for such Eurodollar Loan, so long as such extension would otherwise be permitted by this Section. In the event any conversion or extension of a Eurodollar Loan is not permitted or required by this Section, then such Eurodollar Loan shall be automatically converted into a Base Rate Loan at the end of the Interest Period applicable thereto. The Administrative Agent shall give each Lender notice as promptly as practicable of any such proposed extension or conversion affecting any Loan.

3.3 Prepayments.

(a) Voluntary Prepayments. Loans may be repaid in whole or in part without premium or penalty; provided that (i) Eurodollar Loans may be prepaid only upon three (3) Business Days' prior written notice to the Administrative Agent and must be accompanied by payment of any amounts owing under Section 3.11, (ii) partial prepayments shall be minimum principal amounts of $5,000,000, in the case of Eurodollar Loans, and $1,000,000, in the case of Base Rate Loans, and in integral multiples of $1,000,000 in excess thereof; (iii) no Loan may be voluntarily prepaid prior to the date one year following the Closing Date; and
(iv) if after giving effect to any such prepayment, the aggregate outstanding principal balance of the Loans would be less than $25,000,000, then the Borrower shall repay the entire outstanding principal balance of Loans.

(b) [Intentionally Omitted].

(c) Application. Unless otherwise specified by the Borrower, prepayments made hereunder shall be applied first to Loans which are Base Rate Loans, and then to Loans which are Eurodollar Loans in direct order of Interest Period maturities. Amounts prepaid hereunder may not be reborrowed.

3.4 [Intentionally Omitted].

3.5 Fees.

(a) Facility Fee. In consideration of the Commitments hereunder, the Borrower agrees to pay to the Administrative Agent for the benefit of each Lender a facility fee (collectively, the "Facility Fee") equal to three-eighths of one-percent (0.375%) of such Lender's Commitment. The Facility Fee shall be due and payable in full on the Effective Date.

(b) Administrative Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, an annual administrative fee and such other fees, if any, as agreed to from time to time between the Administrative Agent and the Borrower.

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(c) Extension Fee. If the Termination Date is extended pursuant to Section 3.16, the Borrower agrees to pay to the Administrative Agent for the benefit of each Lender an extension fee equal to one-fifteenth of one-percent (0.15%) of the outstanding principal amount of the Loans owing to such Lender (after giving effect to any prepayment of Loans being made by the Borrower in connection with such extension).

3.6 Capital Adequacy.

If any Lender has determined, after the date hereof, that the adoption or the becoming effective of, or any change in, or any change by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof in the interpretation or administration of, any applicable law, rule or regulation regarding capital adequacy, or compliance by such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender's policies with respect to capital adequacy), then, upon notice from such Lender to the Borrower, the Borrower shall be obligated to pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties hereto.

3.7 Inability To Determine Interest Rate.

If prior to the first day of any Interest Period, the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as practicable thereafter. If such notice is given (a) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans and (b) any Loans that were to have been converted on the first day of such Interest Period to or continued as Eurodollar Loans shall be converted to or continued as Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Base Rate Loans to Eurodollar Loans.

3.8 Illegality.

Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring after the Closing Date shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such Lender shall promptly give written notice of such circumstances to the Borrower and the Administrative Agent (which notice shall be withdrawn whenever such circumstances no longer exist), (b) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such time as it shall no longer be unlawful for such Lender to make or

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or maintain Eurodollar Loans, such Lender shall then have a commitment only to make a Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender, upon demand, without duplication, such amounts, if any, as may be reasonably required pursuant to
Section 3.11.

3.9 Requirements of Law.

If, after the date hereof, the adoption of or any change in any Requirement of Law or in the interpretation or application thereof applicable to any Lender, or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority, in each case made subsequent to the Closing Date (or, if later, the date on which such Lender becomes a Lender):

(a) shall subject such Lender to any tax of any kind whatsoever with respect to any Eurodollar Loans made by it or its obligation to make Eurodollar Loans, or change the basis of taxation of payments to such Lender in respect thereof (except for (i) Non-Excluded Taxes covered by Section 3.10 (including Non-Excluded Taxes imposed solely by reason of any failure of such Lender to comply with its obligations under Section 3.10(b)) and (ii) changes in taxes measured by or imposed upon the overall net income, or franchise tax (imposed in lieu of such net income tax), of such Lender or its applicable lending office, branch, or any affiliate thereof);

(b) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the Eurodollar Rate hereunder; or

(c) shall impose on such Lender any other condition (excluding any tax of any kind whatsoever);

and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender reasonably deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or to reduce any amount receivable hereunder in respect thereof, then, in any such case, upon notice to the Borrower from such Lender, through the Administrative Agent, in accordance herewith, the Borrower shall be obligated to promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable, provided that, in any such case, the Borrower may elect to convert the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving the Administrative Agent at least one Business Day's notice of such election, in which case the Borrower shall promptly pay to such Lender, upon demand, without duplication, such amounts, if any, as may be reasonably required pursuant to Section 3.11. If any Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall provide prompt notice thereof to the Borrower, through the Administrative Agent, certifying (x) that one of the events described in this

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paragraph (a) has occurred and describing in reasonable detail the nature of such event, (y) as to the increased cost or reduced amount resulting from such event and (z) as to the additional amount demanded by such Lender and a reasonably detailed explanation of the calculation thereof. Such a certificate as to any additional amounts payable pursuant to this subsection submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive and binding on the parties hereto in the absence of manifest error. This covenant shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder.

3.10 Taxes.

(a) Except as provided below in this subsection, all payments made by the Borrower under this Credit Agreement and any Notes shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any court, or governmental body, agency or other official, excluding taxes measured by or imposed upon the overall net income of any Lender or its applicable lending office, or any branch or affiliate thereof, and all franchise taxes, branch taxes, taxes on doing business or taxes on the overall capital or net worth of any Lender or its applicable lending office, or any branch or affiliate thereof, in each case imposed in lieu of net income taxes, imposed: (i) by the jurisdiction under the laws of which such Lender, applicable lending office, branch or affiliate is organized or is located, or in which its principal executive office is located, or any nation within which such jurisdiction is located or any political subdivision thereof; or (ii) by reason of any connection between the jurisdiction imposing such tax and such Lender, applicable lending office, branch or affiliate other than a connection arising solely from such Lender having executed, delivered or performed its obligations, or received payment under or enforced, this Credit Agreement or any Notes. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder or under any Notes, (A) the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Credit Agreement and any Notes, provided, however, that the Borrower shall be entitled to deduct and withhold any Non-Excluded Taxes and shall not be required to increase any such amounts payable to any Lender that is not organized under the laws of the United States of America or a state thereof if such Lender fails to comply with the requirements of paragraph (b) of this subsection whenever any Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as possible thereafter the Borrower shall send to the Administrative Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrower shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder.

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(b) Each Lender that is not a United States person under Section 7701(a)(30) of the Code, on or prior to the date of its execution and delivery of this Credit Agreement in the case of each Lender listed on the signature pages hereof and on or prior to the date on which it becomes a Lender in the case of each other Lender, and from time to time thereafter if requested in writing by the Borrower or the Administrative Agent (but only so long as such Lender remains lawfully able to do so), shall provide the Borrower and the Administrative Agent with (i) Internal Revenue Service Form W-8 BEN or W-8 ECI, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces to zero the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to this Credit Agreement is effectively connected with the conduct of a trade or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form prescribed by the Internal Revenue Service, and/or (iii) any other form or certificate required by any taxing authority (including any certificate required by Sections 871(h) and 881(c) of the Code), certifying that such Lender is entitled to an exemption from tax on payments pursuant to this Credit Agreement or any of the other Credit Documents.

3.11 Indemnity.

The Borrower promises to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur (other than through such Lender's gross negligence or willful misconduct) as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after the Borrower has given a notice thereof in accordance with the provisions of this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which is not the last day of an Interest Period with respect thereto. With respect to Eurodollar Loans, such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Percentage included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market. The covenants of the Borrower set forth in this Section 3.11 shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder.

3.12 Pro Rata Treatment.

Except to the extent otherwise provided herein:

(a) Loans. Each Loan, each payment or prepayment of principal of any Loan, each payment of interest on the Loans, each payment of Facility Fees, each payment of extension fees payable under Section 3.5(c), and each conversion or extension of any Loan, shall be allocated

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pro rata among the Lenders in accordance with the respective principal amounts of the outstanding Loans to which such payment or prepayment is to be applied.

(b) Advances. No Lender shall be responsible for the failure or delay by any other Lender in its obligation to make its ratable share of a borrowing hereunder (and further, no Lender shall be required to fulfill any obligation of a Defaulting Lender); provided, however, that the failure of any Lender to fulfill its obligations hereunder shall not relieve any other Lender of its obligations hereunder.

3.13 Sharing of Payments.

The Lenders agree among themselves that, in the event that any Lender shall obtain payment in respect of any Loan or any other obligation owing to such Lender under this Credit Agreement through the exercise of a right of setoff, banker's lien or counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, in excess of its pro rata share of such payment as provided for in this Credit Agreement, such Lender shall promptly purchase from the other Lenders a participation in such Loans and other obligations in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all Lenders share such payment in accordance with their respective ratable shares as provided for in this Credit Agreement. The Lenders further agree among themselves that if payment to a Lender obtained by such Lender through the exercise of a right of setoff, banker's lien, counterclaim or other event as aforesaid shall be rescinded or must otherwise be restored, each Lender which shall have shared the benefit of such payment shall, by repurchase of a participation theretofore sold, return its share of that benefit (together with its share of any accrued interest payable with respect thereto) to each Lender whose payment shall have been rescinded or otherwise restored. The Borrower agrees that any Lender so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including setoff, banker's lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Loan or other obligation in the amount of such participation. Except as otherwise expressly provided in this Credit Agreement, if any Lender or the Administrative Agent shall fail to remit to the Administrative Agent or any other Lender an amount payable by such Lender or the Administrative Agent to the Administrative Agent or such other Lender pursuant to this Credit Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to the Administrative Agent or such other Lender at a rate per annum equal to the Federal Funds Rate. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section 3.13 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders under this
Section 3.13 to share in the benefits of any recovery on such secured claim.

3.14 Payments, Computations, Etc.

(a) Except as otherwise specifically provided herein, all payments hereunder shall be made to the Administrative Agent in dollars in immediately available funds, without offset, deduction, counterclaim or withholding of any kind, at the Administrative Agent's office specified

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in Section 11.1 not later than 2:00 P.M. (Charlotte, North Carolina time) on the date when due. Payments received after such time shall be deemed to have been received on the next succeeding Business Day. The Administrative Agent may (but shall not be obligated to) debit the amount of any such payment which is not made by such time to any ordinary deposit account of the Borrower maintained with the Administrative Agent (with notice to the Borrower). The Borrower shall, at the time it makes any payment under this Credit Agreement, specify to the Administrative Agent the Loans, Fees, interest or other amounts payable by the Borrower hereunder to which such payment is to be applied (and in the event that it fails so to specify, or if such application would be inconsistent with the terms hereof, the Administrative Agent shall distribute such payment to the Lenders in such manner as the Administrative Agent may determine to be appropriate in respect of obligations owing by the Borrower hereunder, subject to the terms of Section 3.12(a)). The Administrative Agent will distribute such payments to such Lenders, if any such payment is received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business Day in like funds as received prior to the end of such Business Day and otherwise the Administrative Agent will distribute such payment to such Lenders on the next succeeding Business Day. Whenever any payment hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day (subject to accrual of interest and Fees for the period of such extension), except that in the case of Eurodollar Loans, if the extension would cause the payment to be made in the next following calendar month, then such payment shall instead be made on the next preceding Business Day. Except as expressly provided otherwise herein, all computations of interest and fees shall be made on the basis of actual number of days elapsed over a year of 360 days, except with respect to computation of interest on Base Rate Loans which (unless the Base Rate is determined by reference to the Federal Funds Rate) shall be calculated based on a year of 365 or 366 days, as appropriate. Interest shall accrue from and include the date of borrowing, but exclude the date of payment.

(b) Allocation of Payments After Event of Default. Notwithstanding any other provisions of this Credit Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by the Administrative Agent or any Lender on account of the Guaranteed Obligations or any other amounts outstanding under any of the Credit Documents shall be paid over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation reasonable attorneys' fees) of the Administrative Agent in connection with enforcing the rights of the Lenders under the Credit Documents;

SECOND, to payment of any fees owed to the Administrative Agent;

THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation, reasonable attorneys' fees) of each of the Lenders in connection with enforcing its rights under the Credit Documents or otherwise with respect to the Loans or other Guaranteed Obligations hereunder owing to such Lender;

FOURTH, to the payment of all accrued interest (pro rata based on proportions of accrued unpaid interest on Loans) and fees on or in respect of the Loans or other Guaranteed Obligations hereunder;

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FIFTH, to the payment of the outstanding principal amount of the Guaranteed Obligations;

SIXTH, to all other Loans and other obligations which shall have become due and payable under the Credit Documents or otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above; and

SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; and (ii) each of the Lenders shall receive an amount equal to its pro rata share (based on the proportion that the then outstanding Loans (or in the case of application under clause "FOURTH" pro rata based on accrued unpaid interest) held by such Lender bears to the aggregate then outstanding Loans) of amounts available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above.

3.15 Evidence of Debt.

(a) Each Lender shall maintain an account or accounts evidencing the Loan made by such Lender to the Borrower, including the amounts of principal and interest payable and paid to such Lender from time to time under this Credit Agreement. Each Lender will make reasonable efforts to maintain the accuracy of its account or accounts and to promptly update its account or accounts from time to time, as necessary.

(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c) hereof, and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount, type and Interest Period of each such Loan hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from or for the account of the Borrower and each Lender's share thereof. The Administrative Agent will make reasonable efforts to maintain the accuracy of the subaccounts referred to in the preceding sentence and to promptly update such subaccounts from time to time, as necessary.

(c) The entries made in the accounts, Register and subaccounts maintained pursuant to subsection (b) of this Section 3.15 (and, if consistent with the entries of the Administrative Agent, subsection (a)) shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain any such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay the Loans made by such Lender in accordance with the terms hereof.

3.16 Extension of Termination Date.

(a) The Borrower may request that the Administrative Agent and the Lenders extend the current Termination Date by one year by executing and delivering to the Administrative Agent at least 30 days but not more than 90 days prior to the current Termination Date, a written request for such extension. The Administrative Agent shall forward to each Lender a copy of any

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such request delivered to the Administrative Agent promptly upon receipt thereof. Subject to satisfaction of the conditions contained in the immediately following subsection (b), the Termination Date shall be extended for one year.

(b) The effectiveness of any extension of the Termination Date is subject to the following conditions: (i) immediately prior to such extension, no Default or Event of Default shall have occurred and be continuing or would result after giving effect to such extension; (ii) the Borrower shall have paid the Fees payable under Section 3.5(c) hereof; (iii) if such extension is the second extension of the Termination Date, at least 50% of the initial aggregate balance of the Loans shall have been repaid on or prior to the effective date of such extension; and (iv) the Termination Date may be extended only two times pursuant to this Section.

SECTION 4 GUARANTY

4.1 The Guarantee.

Each of the Guarantors hereby jointly and severally guarantees to each Lender and to the Administrative Agent as hereinafter provided the prompt payment of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Guarantors hereby further agree that if any of the Guaranteed Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as mandatory cash collateralization or otherwise), the Guarantors will, jointly and severally, promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

Notwithstanding any provision to the contrary contained herein or in any other of the Credit Documents, to the extent the obligations of a Guarantor shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of each Guarantor hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the Bankruptcy Code).

4.2 Obligations Unconditional.

The obligations of the Guarantors under Section 4.1 hereof are joint and several, absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Credit Documents, or any other agreement or instrument referred to therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 4.2 that the obligations of the Guarantors hereunder shall be absolute and unconditional under any and all circumstances. Each Guarantor

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agrees that such Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against the Borrower or any other Guarantor of the Guaranteed Obligations for amounts paid under this Section 4 until such time as the Lenders have been irrevocably paid in full, all Commitments under the Credit Agreement have been terminated and no Person or Governmental Authority shall have any right to request any return or reimbursement of funds from the Lenders in connection with monies received under the Credit Documents. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence of any one or more of the following shall not alter or impair the liability of any Guarantor hereunder which shall remain absolute and unconditional as described above:

(i) at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

(ii) any of the acts mentioned in any of the provisions of any of the Credit Documents or any other agreement or instrument referred to in the Credit Documents shall be done or omitted;

(iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Credit Documents or any other agreement or instrument referred to in the Credit Documents shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

(iv) any Lien granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Guaranteed Obligations shall fail to attach or be perfected; or

(v) any of the Guaranteed Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Credit Documents or any other agreement or instrument referred to in the Credit Documents, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations.

4.3 Reinstatement.

The obligations of the Guarantors under this Section 4 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or

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otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including, without limitation, fees and expenses of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

4.4 Certain Additional Waivers.

Each Guarantor agrees that such Guarantor shall have no right of recourse to security for the Guaranteed Obligations, except through the exercise of the rights of subrogation pursuant to Section 4.2.

4.5 Remedies.

The Guarantors agree that, to the fullest extent permitted by law, as between the Guarantors, on the one hand, and the Administrative Agent and the Lenders, on the other hand, the Guaranteed Obligations may be declared to be forthwith due and payable as provided in Section 9.2 hereof (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 9.2) for purposes of Section 4.1 hereof notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Guaranteed Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Guaranteed Obligations being deemed to have become automatically due and payable), the Guaranteed Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Guarantors for purposes of said
Section 4.1.

4.6 Rights of Contribution.

The Guarantors hereby agree, as among themselves, that if any Guarantor shall become an Excess Funding Guarantor (as defined below), each other Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor an amount equal to such Guarantor's Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, assets, liabilities and debts of such Excess Funding Guarantor) of such Excess Payment (as defined below). The payment obligation of any Guarantor to any Excess Funding Guarantor under this Section 4.6 shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Guarantor under the other provisions of this Section 4, and such Excess Funding Guarantor shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations. For purposes hereof, (i) "Excess Funding Guarantor" shall mean, in respect of any obligations arising under the other provisions of this Section 4 (hereafter, the "Guarantied Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata Share of the Guarantied Obligations; (ii) "Excess Payment" shall mean, in respect of any Guarantied Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such Guarantied Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 4.6, shall mean, for any Guarantor, the ratio (expressed as a percentage) of (a) the amount by which the aggregate present fair saleable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Guarantor (including contingent, subordinated, unmatured, and unliquidated liabilities, but

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excluding the obligations of such Guarantor hereunder) to (b) the amount by which the aggregate present fair saleable value of all assets and other properties of the Borrower and all of the Guarantors exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Borrower and the Guarantors hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date (if any Guarantor becomes a party hereto subsequent to the Closing Date, then for the purposes of this Section 4.6 such subsequent Guarantor shall be deemed to have been a Guarantor as of the Closing Date and the information pertaining to, and only pertaining to, such Guarantor as of the date such Guarantor became a Guarantor shall be deemed true as of the Closing Date).

4.7 Continuing Guarantee.

The guarantee in this Section 4 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising.

4.8 Release of Guarantors by Administrative Agent.

Upon the written request (and at the expense) of the Borrower, the Administrative Agent shall execute a writing releasing, on behalf of the Lenders, one or more Subsidiaries designated by the Borrower from their obligations as Guarantors hereunder, provided that on or prior to the effective date of such release the Borrower shall have delivered to the Administrative Agent (x) a certificate of a Responsible Officer certifying that (a) on a pro forma basis after giving effect to such release (and the addition of any new Guarantors pursuant to Section 7.11(a) on such effective date), the Credit Parties would have been in compliance with the financial covenant contained in
Section 7.9(f) as of the last day of the most recently ended fiscal quarter, (b) as of such effective date, the Credit Parties will be in compliance with Section 7.11(a) and (c) no other Default or Event of Default then exists or shall occur as a result of such release and (y) evidence satisfactory to the Administrative Agent that the Subsidiaries to be released have been, or will be simultaneously with their release hereunder, released as "Guarantors" under and as defined in the Bank of America Credit Agreement. Such certificate shall include the calculations required to indicate compliance with Section 7.9(f).

SECTION 5 CONDITIONS

5.1 Conditions to Closing.

This Credit Agreement shall become effective, and the Extensions of Credit may be made, upon the satisfaction of the following conditions precedent:

(a) Execution of Credit Agreement and Credit Documents. Receipt of
(i) multiple counterparts of this Credit Agreement, and (ii) a Note for each Lender.

(b) Financial Information. Receipt of financial information regarding the Borrower and its subsidiaries, as may be requested by, and in each case in form and substance satisfactory to the Administrative Agent and the Lenders, including, without limitation, a Borrower-prepared consolidated balance sheet of the Borrower and its consolidated Subsidiaries

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dated as of June 30, 2000, together with related consolidated statements of operations and cash flows.

(c) Absence of Legal Proceedings. The absence of any action, suit, investigation or proceeding pending in any court or before any arbitrator or governmental instrumentality which could reasonably be expected to have a Material Adverse Effect.

(d) Legal Opinions. Receipt of multiple counterparts of opinions of counsel for the Credit Parties relating to the Credit Documents and the transactions contemplated herein, in form and substance satisfactory to the Administrative Agent and the Required Lenders.

(e) Corporate Documents. Receipt of the following (or their equivalent) for each of the Credit Parties:

(i) Articles of Incorporation. Copies of the articles of incorporation or charter documents certified to be true and complete by the appropriate governmental authority of the state of its incorporation or organization.

(ii) Resolutions. Copies of resolutions of the Board of Directors or other governing body approving and adopting the respective Credit Documents, the transactions contemplated therein and authorizing execution and delivery thereof, certified by a secretary or assistant secretary as of the Closing Date to be true and correct and in force and effect as of such date.

(iii) Bylaws. Copies of the bylaws certified by a secretary or assistant secretary as of the Closing Date to be true and correct and in force and effect as of such date.

(iv) Good Standing. Copies of (A) certificates of good standing, existence or its equivalent issued by the appropriate governmental authorities of the respective states of incorporation or organization and of each other state in which the failure to qualify and be in good standing would have a Material Adverse Effect and (B) where available, certificates indicating payment of all corporate franchise taxes issued as of a recent date by the appropriate governmental taxing authorities of such states.

(v) Officer's Certificate. An officer's certificate for each of the Credit Parties dated as of the Closing Date substantially in the form of Schedule 5.1(e)(v) with appropriate insertions and attachments.

(f) Fees. Receipt of all fees, if any, owing pursuant to (i) any

prior agreement between the Administrative Agent and the Borrower and (ii)
Section 3.5.

(g) Subsection 5.2 Conditions. The conditions specified in Section 5.2 shall be satisfied.

(h) Notice of Borrowing. The Administrative Agent shall have received from the Borrower a Notice of Borrowing not later than 11:00 A.M. (Charlotte, North Carolina time) on the Effective Date if the Loans are initially to be Base Rate Loans, or on the third Business Day

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prior to the Effective Date if the Loans are initially to be Eurodollar Loans, and if Eurodollar Loans are requested, the Interest Period(s) therefor.

(i) Additional Matters. All other documents and legal matters in connection with the transactions contemplated by this Credit Agreement shall be reasonably satisfactory in form and substance to the Administrative Agent and the Required Lenders.

5.2 Conditions to All Extensions of Credit.

The obligation of each Lender to make any Extension of Credit hereunder is subject to the satisfaction of the following conditions precedent on the date of making such Extension of Credit:

(a) Representations and Warranties. The representations and warranties made by the Credit Parties herein or in any other Credit Documents or which are contained in any certificate furnished at any time under or in connection herewith shall be true and correct in all material respects on and as of the date of such Extension of Credit as if made on and as of such date (except for those which expressly relate to an earlier date).

(b) No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the Extension of Credit to be made on such date unless such Default or Event of Default shall have been waived in accordance with this Credit Agreement.

(c) No Material Adverse Effect. No circumstances, events or conditions shall have occurred since the date of the audited financial statements referenced in Section 6.1 which would have or have had a Material Adverse Effect.

(d) Additional Conditions to Loans. All conditions set forth in Section 2.1 shall have been satisfied.

Each request for Extension of Credit (including extensions and conversions) and each acceptance by the Borrower of an Extension of Credit (including extensions and conversions) shall be deemed to constitute a representation and warranty by the Borrower as of the date of such Extension of Credit that the applicable conditions in paragraphs (a), (b), (c), and (d) of this subsection have been satisfied.

SECTION 6 REPRESENTATIONS AND WARRANTIES

To induce the Lenders to enter into this Credit Agreement and to make Extensions of Credit herein provided for, each of the members of the Consolidated Group parties hereto (in the case of the Borrower, for itself and for each of the other members of the Consolidated Group; and in the case of each of the other Credit Parties, for itself) hereby represents and warrants to the Administrative Agent and to each Lender that:

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6.1 Financial Condition.

As to the Borrower, the audited consolidated balance sheet of the Borrower and its consolidated subsidiaries dated as of December 31, 1999, together with related statements of operations, cash flows and shareholders' equity certified by Ernst & Young LLP, independent auditors (copies of which have heretofore been provided to the Administrative Agent for distribution to the Lenders), have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby, are complete and correct in all material respects and present fairly the financial condition and results from operations of the entities and for the periods specified, subject in the case of interim Borrower-prepared statements to normal year-end adjustments.

6.2 No Material Adverse Changes.

Since the date of the audited financial statements referenced in Section 6.1, there has been no circumstance, development or event relating to or affecting the members of the Consolidated Group which has had or would be reasonably expected to have a Material Adverse Effect.

6.3 Organization; Existence; Compliance with Law.

Except as disclosed on Schedule 6.3, each of the members of the Consolidated Group (a) is duly organized, validly existing in good standing under the laws of the jurisdiction of its incorporation or organization, except in such jurisdictions where the failure to be so qualified and in good standing would not, in the aggregate, have a Material Adverse Effect, (b) has the corporate or other necessary power and authority, and the legal right to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign entity and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, other than in such jurisdictions where the failure to be so qualified and in good standing would not, in the aggregate, have a Material Adverse Effect, and (d) is in compliance with all Requirements of Law, except to the extent that the failure to comply therewith would not, in the aggregate, be reasonably expected to have a Material Adverse Effect.

The Borrower is a "real estate investment trust" within the meaning provided under the Code.

6.4 Power; Authorization; Enforceable Obligations.

Each of the Credit Parties has the corporate or other necessary power and authority, and the legal right, to make, deliver and perform the Credit Documents to which it is a party and has taken all necessary corporate or other action to authorize the execution, delivery and performance by it of the Credit Documents to which it is a party. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with acceptance of extensions of credit or the making of the guaranties hereunder or with the execution, delivery or performance of any Credit Documents by the Credit Parties (other than those which have been obtained, such filings as are required by the Securities and Exchange Commission and to fulfill other reporting requirements with Governmental Authorities) or with

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the validity or enforceability of any Credit Document against the Credit parties. Each Credit Document to which it is a party constitutes a legal, valid and binding obligation of such Credit Party enforceable against such Credit Party in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

6.5 No Legal Bar.

The execution, delivery and performance of the Credit Documents, the borrowings hereunder and the use of the Extensions of Credit will not violate any Requirement of Law or any Contractual Obligation of any member of the Consolidated Group (except those as to which waivers or consents have been obtained), and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or Contractual Obligation other than the Liens arising under or contemplated in connection with the Credit Documents. No member of the Consolidated Group is in default under or with respect to any of its Contractual Obligations in any respect which would reasonably be expected to have a Material Adverse Effect.

6.6 No Material Litigation.

Except to the extent disclosed on Schedule 6.6, no claim, litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the best knowledge of the Credit Parties, threatened by or against, any members of the Consolidated Group or against any of their respective properties or revenues which (a) relate to the Credit Documents or any of the transactions contemplated hereby or thereby, or (b) if adversely determined, would reasonably be expected to have a Material Adverse Effect.

6.7 No Default.

No Default or Event of Default has occurred and is continuing.

6.8 Ownership of Property; Liens.

Each of the members of the Consolidated Group has good title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, and none of such property is subject to any Lien, except for liens permitted under
Section 8.2.

6.9 Taxes.

Each of the members of the Consolidated Group has filed or caused to be filed all United States federal income tax returns and all other material tax returns which, to the best knowledge of the Credit Parties, are required to be filed and has paid or received extensions regarding (a) all taxes shown to be due and payable on said returns or (b) all taxes shown to be due and payable on any assessments of which it has received notice made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any (i) taxes, fees or other charges with respect to which the failure to pay, in the aggregate,

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would not have a Material Adverse Effect or (ii) taxes, fees or other charges the amount or validity of which are currently being contested and with respect to which reserves in conformity with GAAP have been provided on the books of such Person), and no tax Lien has been filed, and, to the best knowledge of the Credit Parties, no claim is being asserted, with respect to any such tax, fee or other charge.

6.10 ERISA.

Except as would not reasonably be expected to have a Material Adverse Effect:

(a) During the five-year period prior to the date on which this representation is made or deemed made: (i) no ERISA Event has occurred, and, to the best knowledge of the Credit Parties, no event or condition has occurred or exists as a result of which any ERISA Event could reasonably be expected to occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, has occurred with respect to any Plan; (iii) each Plan has been maintained, operated, and funded in compliance with its own terms and in material compliance with the provisions of ERISA, the Code, and any other applicable federal or state laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on account of any Plan.

(b) The actuarial present value of all "benefit liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or not vested, under each Single Employer Plan, as of the last annual valuation date prior to the date on which this representation is made or deemed made (determined, in each case, in accordance with Financial Accounting Standards Board Statement 87, utilizing the actuarial assumptions used in such Plan's most recent actuarial valuation report), did not exceed as of such valuation date the fair market value of the assets of such Plan.

(c) No member of the Consolidated Group nor any ERISA Affiliate has incurred, or, to the best knowledge of the Credit Parties, could be reasonably expected to incur, any withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer Plan. No member of the Consolidated Group nor any ERISA Affiliate would become subject to any withdrawal liability under ERISA if any member of the Consolidated Group or any ERISA Affiliate were to withdraw completely from all Multiemployer Plans and Multiple Employer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No member of the Consolidated Group nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge of the Credit Parties, reasonably expected to be in reorganization, insolvent, or terminated.

(d) No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has occurred with respect to a Plan which has subjected or may subject any member of the Consolidated Group or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which any member of the Consolidated Group or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability.

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(e) No member of the Consolidated Group nor any ERISA Affiliates has any material liability with respect to "expected post-retirement benefit obligations" within the meaning of the Financial Accounting Standards Board Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code apply has been administered in compliance in all material respects of such sections.

6.11 Governmental Regulations, Etc.

(a) No part of the proceeds of Extensions of Credit hereunder will be used, directly or indirectly, for the purpose of purchasing or carrying any "margin stock" within the meaning of Regulation U, or for the purpose of purchasing or carrying or trading in any securities. If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 referred to in said Regulation U. No indebtedness being reduced or retired out of the proceeds of Extensions of Credit hereunder was or will be incurred for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U or any "margin security" within the meaning of Regulation T. "Margin stock" within the meanings of Regulation U does not constitute more than 25% of the value of the consolidated assets of the Borrower and its Subsidiaries. None of the transactions contemplated by this Credit Agreement (including, without limitation, the direct or indirect use of the proceeds of the Loans) will violate or result in a violation of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or regulations issued pursuant thereto, or Regulation T, U or X.

(b) None of the members of the Consolidated Group is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940, each as amended. In addition, none of the members of the Consolidated Group is (i) an "investment company" registered or required to be registered under the Investment Company Act of 1940, as amended, and is not controlled by such a company, or (ii) a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended.

(c) Each of the members of the Consolidated Group has obtained all material licenses, permits, franchises or other governmental authorizations necessary to the ownership of its respective Property and to the conduct of its business.

(d) None of the members of the Consolidated Group is in violation of any applicable statute, regulation or ordinance of the United States of America, or of any state, city, town, municipality, county or any other jurisdiction, or of any agency thereof (including without limitation, environmental laws and regulations), which violation could reasonably be expected to have a Material Adverse Effect.

(e) Each of the members of the Consolidated Group is current with all material reports and documents, if any, required to be filed with any state or federal securities commission or similar agency and is in full compliance in all material respects with all applicable rules and regulations of such commissions.

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6.12 Subsidiaries.

Set forth on Schedule 6.12 are all the Subsidiaries of the Borrower at the Closing Date, the jurisdiction of their incorporation and the direct or indirect ownership interest of the Borrower therein and whether or not such subsidiary is a Guarantor. Each "Guarantor" under and as defined in the Bank of America Credit Agreement is a Guarantor hereunder.

6.13 Purpose of Extensions of Credit.

The Extensions of Credit will be used to fund acquisitions and development, to refinance existing Debt, and to finance working capital and other corporate purposes.

6.14 Environmental Matters.

Except as would not reasonably be expected to have a Material Adverse Effect:

(a) Each of the facilities and properties owned, leased or operated by the members of the Consolidated Group (the "Properties") and all operations at the Properties are in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Law with respect to the Properties or the businesses operated by the members of the Consolidated Group (the "Businesses"), and there are no conditions relating to the Businesses or Properties that could give rise to material liability under any applicable Environmental Laws.

(b) To the knowledge of the members of the Consolidated Group, none of the Properties contains any Materials of Environmental Concern at, on or under the Properties in amounts or concentrations that constitute or constituted a violation of, or could give rise to liability under, Environmental Laws.

(c) None of the members of the Consolidated Group has received any written notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the Businesses.

(d) Materials of Environmental Concern have not been transported or disposed of from the Properties, or generated, treated, stored or disposed of at, on or under any of the Properties or any other location, in each case by or on behalf any members of the Consolidated Group during their ownership of the Properties in violation of, or in a manner that would be reasonably likely to give rise to liability under, any applicable Environmental Law.

(e) No judicial proceeding or governmental or administrative action is pending or, to the best knowledge of any Credit Party, threatened, under any Environmental Law to which any member of the Consolidated Group is or will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to any member of the Consolidated Group, the Properties or the Businesses.

(f) There has been no release or, threat of release of Materials of Environmental Concern at or from the Properties or arising from or related to the operations (including, without

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limitation, disposal) of any member of the Consolidated Group in connection with the Properties or otherwise in connection with the Businesses, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws.

SECTION 7 AFFIRMATIVE COVENANTS

Each of the Credit Parties (in the case of the Borrower, for itself and each of the other members of the Consolidated Group, and in the case of each of the other Credit Parties, for itself) covenants and agrees that on the Closing Date, and so long as this Credit Agreement is in effect and until no Loans remain outstanding and all amounts owing hereunder or in connection herewith have been paid in full:

7.1 Financial Statements.

The Borrower shall furnish, or cause to be furnished, to the Administrative Agent for distribution to the Lenders:

(a) Audited Financial Statements. As soon as available, but in any event within 90 days after the end of each fiscal year, an audited consolidated balance sheet of the Borrower and its subsidiaries as of the end of the fiscal year and the related consolidated statements of operations, shareholders' equity and cash flows for the year, audited by Ernst & Young LLP, or other firm of independent certified public accountants of nationally recognized standing, setting forth in each case in comparative form the figures for the previous year, reported without a "going concern" or like qualification or exception, or qualification indicating that the scope of the audit was inadequate to permit such independent certified public accountants to certify such financial statements without such qualification.

(b) Borrower-Prepared Financial Statements. As soon as available, but in any event within 60 days after the end of each of the first three fiscal quarters, a Borrower-prepared consolidated balance sheet of the Borrower and its subsidiaries as of the end of the quarter and related Borrower-prepared consolidated statements of operations and cash flows for such quarterly period and for the fiscal year to date, in each case setting forth in comparative form the consolidated figures for the corresponding period or periods of the preceding fiscal year or the portion of the fiscal year ending with such period, as applicable, in each case subject to normal recurring year-end audit adjustments.

All such financial statements shall be complete and correct in all material respects (subject, in the case of interim statements, to normal recurring year- end audit adjustments) and shall be prepared in reasonable detail and, in the case of the annual and quarterly financial statements provided in accordance with subsections (a) and (b) above, in accordance with GAAP applied consistently throughout the periods reflected therein and further accompanied by a description of, and an estimation of the effect on the financial statements on account of, a change in the application of accounting principles as provided in
Section 1.3.

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7.2 Certificates; Other Information.

The Borrower shall furnish, or cause to be furnished, to the Administrative Agent for distribution to the Lenders:

(a) Accountant's Certificate and Reports. If the financial statements referred to in Section 7.1(a) above contain a qualified auditor's opinion, then concurrently with the delivery of the financial statements referred to in subsection 7.1(a) above, a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default, except as specified in such certificate.

(b) Officer's Certificate. Concurrently with the delivery of the financial statements referred to in Sections 7.1(a) and 7.1(b) above, a certificate of a Responsible Officer stating that, to the best of such Responsible Officer's knowledge and belief, (i) the financial statements fairly present in all material respects the financial condition of the parties covered by such financial statements, (ii) during such period the members of the Consolidated Group have observed or performed in all material respects the covenants and other agreements hereunder and under the other Credit Documents relating to them, and satisfied in all material respects the conditions, contained in this Credit Agreement to be observed, performed or satisfied by them, and (iii) such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate. Such certificate shall include the calculations required to indicate (A) compliance with Section 7.9, (B) compliance with Section 7.11(a) and (C) the portion of Consolidated Unencumbered Realty represented by Non-Guarantor Subsidiaries. A form of Officer's Certificate is attached as Schedule 7.2(b).

(c) Accountants' Reports. Promptly upon receipt, a copy of any final (as distinguished from a preliminary or discussion draft) "management letter" or other similar report submitted by independent accountants or financial consultants to the members of the Consolidated Group in connection with any annual, interim or special audit.

(d) Public Information. Within thirty days after the same are sent, copies of all reports (other than those otherwise provided pursuant to subsection 7.1) and other financial information which any member of the Consolidated Group sends to its public stockholders, and within thirty days after the same are filed, copies of all financial statements and non- confidential reports which any member of the Consolidated Group may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental Authority.

(e) Other Information. Promptly, such additional financial and other information as the Administrative Agent, at the request of any Lender, may from time to time reasonably request.

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7.3 Notices.

Each of the Credit Parties shall give notice (in accordance with Section 11.1) to the Administrative Agent (which shall promptly transmit such notice to each Lender) of:

(a) Defaults. Immediately (and in any event within two (2) Business Days) after any Responsible Officer of any Credit Party knows or has reason to know thereof, the occurrence of any Default or Event of Default (such notice shall expressly state that it is a "notice of default").

(b) Contractual Obligations. Promptly, the occurrence of any default or event of default under any Contractual Obligation of any member of the Consolidated Group which would reasonably be expected to have a Material Adverse Effect.

(c) Legal Proceedings. Promptly, any litigation, or any investigation or proceeding (including without limitation, any environmental proceeding) known to any member of the Consolidated Group, or any material development in respect thereof, affecting any member of the Consolidated Group which, if adversely determined, would reasonably be expected to have a Material Adverse Effect.

(d) ERISA. Promptly, after any Responsible Officer of the Borrower knows or has reason to know of (i) any event or condition, including, but not limited to, any Reportable Event, that constitutes, or might reasonably lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of any withdrawal liability assessed against any of their ERISA Affiliates, or of a determination that any Multiemployer Plan is in reorganization or insolvent (both within the meaning of Title IV of ERISA); (iii) the failure to make full payment on or before the due date (including extensions) thereof of all amounts which the members of the Consolidated Group or any ERISA Affiliate are required to contribute to each Plan pursuant to its terms and as required to meet the minimum funding standard set forth in ERISA and the Code with respect thereto; or (iv) any change in the funding status of any Plan that reasonably could be expected to have a Material Adverse Effect; together with a description of any such event or condition or a copy of any such notice and a statement by the chief financial officer of the Borrower briefly setting forth the details regarding such event, condition, or notice, and the action, if any, which has been or is being taken or is proposed to be taken by the Credit Parties with respect thereto. Promptly upon request, the members of the Consolidated Group shall furnish the Administrative Agent and the Lenders with such additional information concerning any Plan as may be reasonably requested, including, but not limited to, copies of each annual report/return (Form 5500 series), as well as all schedules and attachments thereto required to be filed with the Department of Labor and/or the Internal Revenue Service pursuant to ERISA and the Code, respectively, for each "plan year" (within the meaning of Section 3(39) of ERISA).

(e) Other. Promptly, any other development or event which a Responsible Officer of the Borrower determines could reasonably be expected to have a Material Adverse Effect.

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Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the relevant Credit Parties propose to take with respect thereto.

7.4 Payment of Obligations.

Each member of the Consolidated Group shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, in accordance with prudent business practice (subject, where applicable, to specified grace periods) all material obligations of each member of the Consolidated Group of whatever nature and any additional costs that are imposed as a result of any failure to so pay, discharge or otherwise satisfy such obligations, other than (i) obligations with respect to which the failure to pay, in the aggregate, would not have a Material Adverse Effect, or (ii) obligations the amount or validity of which are being contested and with respect to which reserves in conformity with GAAP have been provided on the books of the appropriate members of the Consolidated Group.

7.5 Conduct of Business and Maintenance of Existence.

Each member of the Consolidated Group shall (a) continue to engage in business of the same general type as now conducted by it on the date hereof and similar or related businesses, and preserve, renew and keep in full force and effect its corporate existence and take all reasonable action to maintain all rights, privileges, licenses and franchises necessary or desirable in the normal conduct of its business and (b) comply with all Contractual Obligations and Requirements of Law applicable to it, except, with respect to each of clauses
(a) and (b) above, to the extent that failure to comply therewith would not, in the aggregate, have a Material Adverse Effect.

7.6 Maintenance of Property; Insurance.

Each member of the Consolidated Group shall keep all material property useful and necessary in its business in reasonably good working order and condition (ordinary wear and tear excepted); maintain with financially sound and reputable insurance companies casualty (on a full replacement cost basis), liability and such other insurance (which may include plans of self-insurance) with such coverage and deductibles, and in such amounts as may be consistent with prudent business practice and in any event consistent with normal industry practice (except to any greater extent as may be required by the terms of any of the other Credit Documents); and furnish to the Administrative Agent, upon written request, full information as to the insurance carried.

7.7 Inspection of Property; Books and Records; Discussions.

Each member of the Consolidated Group shall keep proper books of records and account in which full, true, correct and consolidated (if applicable) entries and are consolidated in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its businesses and activities; and permit, during regular business hours and upon reasonable notice by the Administrative Agent, the Administrative Agent to visit and inspect any of its properties and examine and make abstracts (including photocopies) from any of

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its books and records (other than materials protected by the attorney-client privilege and materials which the Credit Parties may not disclose without violation of a confidentiality obligation binding upon them) at any reasonable time, and to discuss the business, operations, properties and financial and other condition of the members of the Consolidated Group with officers and employees of the members of the Consolidated Group and with their independent certified public accountants. The cost of the inspection referred to in the preceding sentence shall be for the account of the Lenders unless an Event of Default has occurred and is continuing, in which case the cost of such inspection shall be for the account of the Credit Parties.

7.8 Environmental Laws.

Each member of the Consolidated Group shall:

(a) Comply in all material respects with all applicable Environmental Laws and obtain and comply in all material respects with and maintain any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect;

(b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws except to the extent that the same are being contested in good faith by appropriate proceedings and the failure to do or the pendency of such proceedings would not reasonably be expected to have a Material Adverse Effect; and

(c) Defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their respective employees, agents, officers and directors, from and against any and all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of the members of the Consolidated Group or the Properties, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney's and consultant's fees, investigation and laboratory fees, response costs, court costs and litigation expenses, except to the extent that any of the foregoing arise out of the gross negligence or willful misconduct of the party seeking indemnification therefor. The agreements in this paragraph shall survive repayment of the Loans and all other amounts payable hereunder, and termination of the Commitments.

7.9 Financial Covenants.

(a) Consolidated Adjusted Tangible Net Worth. Consolidated Adjusted Tangible Net Worth will at all times be not 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.

(b) Consolidated Funded Debt Ratio. Consolidated Funded Debt shall
(i) as of the last day of the fiscal quarter ending September 30, 2000, be not more than 57.50% of

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Tangible Fair Market Value of Assets; and (ii) as of the last day of all subsequent fiscal quarters, be not more than 55.00% of Tangible Fair Market Value of Assets.

(c) Consolidated Secured Debt. Consolidated Secured Debt will at all times be not more than 35.00% of Tangible Fair Market Value of Assets.

(d) Consolidated Interest Coverage Ratio. As of the last day of the fiscal quarter ending September 30, 2000, the ratio of Consolidated Adjusted EBITDA to Consolidated Interest Expense for the fiscal quarter then ending shall be not less than 1.90:1.0. As of the last day of each subsequent fiscal quarter, the ratio of Consolidated Adjusted EBITDA to Consolidated Interest Expense for the fiscal quarter then ending shall be not less than 2.0:1.0.

(e) Consolidated Total Fixed Charge Coverage Ratio. As of the end of each fiscal quarter, the ratio of Consolidated Adjusted EBITDA to Consolidated Total Fixed Charges for the fiscal quarter then ending shall be not less than 1.5:1.0.

(f) Consolidated Unsecured Debt to Consolidated Unencumbered Realty.
The ratio of Consolidated Unsecured Debt to Consolidated Unencumbered Realty shall : (i) as of the last day of the fiscal quarter ending September 30, 2000, be not more than 57.50% for the fiscal quarter then ending; and (ii) as of the last day of all subsequent fiscal quarters, be not more than 55.00% for the fiscal quarter then ending.

(g) Consolidated Unencumbered Interest Coverage Ratio. As of the end of each fiscal quarter, the ratio of (i) Consolidated Net Operating Income from Unencumbered Realty to (ii) Consolidated Interest Expense relating to Consolidated Unsecured Debt for the fiscal quarter then ending shall be not less than 2.0:1.0.

(h) Dividend Payout. The Borrower shall ensure that distributions on common stock (excluding dividends paid resulting from extraordinary gains, which extraordinary gains are excluded from the calculation of Funds From Operations) during any fiscal quarter do not exceed, in the aggregate, ninety-five percent (95.00%) of Funds From Operations attributable to such fiscal quarter; provided, however, the Borrower may pay dividends or distributions that exceed the amount permitted by the preceding subclause if such larger distribution is required in order for the Borrower to maintain its status as a REIT.

(i) Investments and Acquisitions.

(i) The aggregate cost of all acquisitions made by the Consolidated Group of the assets, property and/or operations of any other Person shall, during any calendar year, be not more than ten percent (10%) of Tangible Fair Market Value of Assets as of the first day of such calendar year.

(ii) The aggregate amount of all loans, advances or Investments (including, for purposes hereof, Guarantees) made by the Consolidated Group to or in respect of any other Person where, after giving effect thereto, such Person will not be a Subsidiary (and excluding Investments permitted pursuant to clauses (i),(ii),(iv), and (v) of the definition of Permitted Investments) shall, during any calendar year, be not more

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than five percent (5%) of Tangible Fair Market Value of Assets as of the first day of such calendar year.

(iii) The aggregate cost of the actual expenditures for improvements on Consolidated Unimproved Realty shall, as of the end of any fiscal quarter, be not more than ten percent (10%) of Tangible Fair Market Value of Assets.

(iv) The GAAP value of Consolidated Unimproved Realty shall, as of the end of any fiscal quarter, be not more than five percent (5%) of Tangible Fair Market Value of Assets.

(v) The aggregate amount of the Consolidated Group's pro rata share of the GAAP value of any asset contributed to or otherwise invested in joint ventures shall, as of the end of any fiscal quarter, be not more than fifteen percent (15%) of Tangible Fair Market Value of Assets.

(vi) The sum of (a) the aggregate cost of the actual expenditures for improvements on Consolidated Unimproved Realty; plus (b) the GAAP value of

Consolidated Unimproved Realty, shall, as of the end of any fiscal quarter, be not more than ten percent (10%) of Tangible Fair Market Value of Assets.

(vii) The sum of (a) the aggregate cost of the actual expenditures for improvements on Consolidated Unimproved Realty; plus (b) the GAAP value of

Consolidated Unimproved Realty; plus (c) the aggregate amount of the

Consolidated Group's pro rata share of the GAAP value of any asset contributed to or otherwise invested in joint ventures, shall, as of the end of any fiscal quarter, be not more than twenty percent (20%) of Tangible Fair Market Value of Assets.

7.10 Agency Fees.

The Borrower shall pay to the Administrative Agent the annual agency fee and comply with the other fee agreements between the Administrative Agent and the Borrower as agreed to from time to time.

7.11 Additional Guaranties.

(a) Where the portion of the undepreciated value of the Realty directly owned by the members of the Consolidated Group ("Consolidated REO") represented by the Realty directly owned by one or more Subsidiaries which are not Guarantors hereunder (the "Non-Guarantor Subsidiaries") shall, at any time, exceed (A) five percent (5%) of Consolidated REO in any instance (that is, with respect to the Realty directly owned by any individual Non-Guarantor Subsidiary), or (B) twenty-five percent (25%) of Consolidated REO collectively as a group (that is, with respect to the Realty directly owned by all Non- Guarantor Subsidiaries) (each such percentage is referred to herein as a "Threshold Requirement"), then the Borrower shall promptly notify the Administrative Agent thereof, and cause one or more Non-Guarantor Subsidiaries to become a Guarantor hereunder by way of execution of a Joinder Agreement such that immediately after the joinder of such Subsidiaries as Guarantors hereunder, the remaining Non-Guarantor Subsidiaries shall not exceed the applicable Threshold Requirement.

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(b) Delivery of any such Joinder Agreement shall be accompanied by supporting resolutions, incumbency certificates, corporation formation and organizational documentation and opinions of counsel as the Administrative Agent may reasonably request.

7.12 Ownership of Subsidiaries.

Except (a) to the extent otherwise permitted in Section 8.7 and to the extent as would not cause a Change of Control and (b) as set forth on Schedule 6.12, the Borrower shall, directly or indirectly, own at all times 100% of the

voting stock of each of its Subsidiaries.

7.13 Use of Proceeds.

Extensions of Credit will be used solely for the purposes provided in
Section 6.13.

SECTION 8 NEGATIVE COVENANTS

Each of the Credit Parties (in the case of the Borrower, for itself and each of the other members of the Consolidated Group, and in the case of each of the other Credit Parties, for itself) covenants and agrees that on the Closing Date, and so long as this Credit Agreement is in effect and until no Loans remain outstanding and all amounts owing hereunder or in connection herewith, have been paid in full, no member of the Consolidated Group shall:

8.1 Limitations on Debt.

Create, incur, assume or suffer to exist any Debt, except Debt the existence or incurrence of which would not violate the financial covenants of
Section 7.9.

8.2 Restriction on Liens.

Create, assume, incur or suffer to exist any Lien on any Property or asset of any kind, real or personal, tangible or intangible, now owned or hereafter acquired by it or assign or subordinate any present or future right to receive assets except:

(a) Liens securing Debt the existence or incurrence of which would not violate the financial covenants of Section 7.9;

(b) Liens securing taxes, assessments or governmental charges or levies or the claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like persons; provided that (A) with respect to Liens securing state and local taxes, such taxes are not yet payable, (B) with respect to Liens securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and the like, such liens are (1) unfiled and no other action has been taken to enforce the same and (2) the cumulative effect of all such Liens will not have a Material Adverse Effect, or (C) with respect to taxes, assessments or governmental charges or levies or claims or demand secured by such Liens, payment is not at the time required;

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(c) Liens not securing Debt which are incurred in the ordinary course of business in connection with workers' compensation, unemployment insurance, unemployment insurance, social security and other like laws;

(d) any Lien arising pursuant to any order of attachment, distraint or similar legal process arising in connection with court proceedings so long as the execution or other enforcement thereof is effectively stayed and the claims secured thereto are being contested in good faith by appropriate proceedings;

(e) zoning restrictions, easements, licenses, reservations, covenants, conditions, waivers, restrictions on the use of property or other minor encumbrances or irregularities of title which do not materially impair the use of any property in the operation or business of the Borrower or such Subsidiary or the value of such property for the purpose of such business; and

(f) Liens on property or assets of such Subsidiary to secure obligations of such Subsidiary solely to the Borrower or a Wholly-Owned Subsidiary.

8.3 Consolidations, Mergers and Sales and Purchases of Assets.

(a) Enter into a transaction of merger or consolidation, except

(i) a member of the Consolidated Group may be a party to a transaction of merger or consolidation with another member of the Consolidated Group, provided that (A) if the Borrower is a party thereto, it is the surviving corporation, or (B) if a Guarantor is a party thereto, it shall be the surviving corporation or the surviving corporation shall be a Domestic Subsidiary and shall become a Guarantor hereunder as an Additional Credit Party pursuant to Section 7.11 concurrently therewith, and (C) no Default or Event of Default shall exist either immediately prior to or immediately after giving effect thereto; and

(ii) a member of the Consolidated Group (other than the Borrower) may be a party to a transaction of merger or consolidation with any other Person, provided that (A) the provisions of Section 7.11 regarding joinder of certain Subsidiaries as Additional Credit Parties hereunder shall be complied with, (B) no Default or Event of Default shall exist either immediately prior to or immediately after giving effect thereto, and (C) the provisions of subsection (c) of this Section shall be complied with.

(b) Other than as between Credit Parties, sell, lease, transfer or otherwise dispose of assets, property and/or operations which in the aggregate in any fiscal year shall constitute more than fifteen percent (15%) of Tangible Fair Market Value of Assets at the end of the immediately preceding fiscal year or contributed more than fifteen percent (15%) of Consolidated EBITDA for the immediately preceding fiscal year, without the prior written consent of the Required Lenders (which consent shall not be unreasonably withheld or delayed).

(c) Acquire all or any portion of the capital stock or other ownership interest in any Person which is not a Subsidiary or all or any portion of the assets, property and/or

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operations of a Person which is not a Subsidiary, without the prior written consent of the Required Lenders (which consent shall not be unreasonably withheld or delayed), unless

(i) in the case of an acquisition of capital stock or other ownership interest where, after giving effect thereto, such Person will not be a Subsidiary, then such acquisition will not cause a violation of
Section 8.4;

(ii) in the case of an acquisition of capital stock or other ownership interest where, after giving effect thereto, such Person will be a Subsidiary, then

(A) the aggregate cost of all such acquisitions during any calendar year shall not exceed an amount equal to twenty-five percent (25%) of Tangible Fair Market Value of Assets at the end of the immediately preceding fiscal year;

(B) the Board of Directors (or functional equivalent) of the Person which is the subject of such acquisition shall have approved the acquisition; and

(C) no Default or Event of Default would exist after giving effect thereto on a Pro Forma Basis;

(iii) in the case of an acquisition of the assets, property and/or operations of a Person, then no Default or Event of Default would exist after giving effect thereto on a Pro Forma Basis.

(d) In the case of the Borrower, liquidate, wind-up or dissolve, whether voluntarily or involuntarily (or suffer to permit any such liquidation or dissolution).

(e) Alter the character of their business in any material respect from that conducted as of the Closing Date and similar or related businesses.

(f) The foregoing provisions of this Section shall not apply to leases of property and assets by members of the Consolidated Group to individual tenants in the ordinary course of business.

8.4 Loans and Investments.

Make loans, advances or Investments (including, for purposes hereof, Guarantees) to or in respect of any other Person, except for Permitted Investments.

8.5 Transactions with Affiliates.

Enter into any transaction, directly or indirectly, including without limitation, the purchase, sale or exchange of property or the rendering of any service to, any Affiliate or shareholder of the Borrower, except in the ordinary course of business pursuant to the reasonable requirements of the business of the Borrower or such Subsidiary and upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than would be obtainable in a

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comparable arms-length transaction with a person not an Affiliate or shareholder; provided that the foregoing restrictions shall not apply to extensions of credit by the Borrower to its officers and directors pursuant to the Borrower's Stock Purchase and Loan Plan in an aggregate amount not to exceed at any time 5% of Consolidated Adjusted Tangible Net Worth.

8.6 Transactions with Other Persons regarding this Agreement.

Enter into any agreement with any Person whereby any of them would agree to any restriction on the Borrower's right with the Lenders' consent to amend or waive any of the provisions of this Credit Agreement.

8.7 Limitation on Certain Restrictions on Subsidiaries.

Other than as presently exist in respect of REMICs and other special Subsidiaries listed on Schedule 8.7, create or otherwise cause or suffer to exist or become effective, directly or indirectly, any encumbrance or restriction on the ability of any Subsidiary to (i) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by any member of the Consolidated Group, (ii) make loans or advances to any member of the Consolidated Group, or (iii) transfer any of its properties or assets to any member of the Consolidated Group, except for encumbrances or restrictions existing under or by reason of (A) applicable law or (B) this Credit Agreement unless, after giving effect thereto on a Pro Forma Basis, the aggregate amount of Consolidated EBITDA attributable to all such REMICs and other special Subsidiaries shall be less than 25% of Consolidated EBITDA.

SECTION 9 EVENTS OF DEFAULT

9.1 Events of Default.

An Event of Default shall exist upon the occurrence of any of the following specified events (each an "Event of Default"):

(a) Payment. Any Credit Party shall

(i) default in the payment when due of any principal of any of the Loans, or

(ii) default, and such default shall continue for five (5) or more Business Days, in the payment when due of any interest on the Loans or of any Fees or other amounts owing hereunder, under any of the other Credit Documents or in connection herewith or therewith; or

(b) Representations. Any representation, warranty or statement made or deemed to be made herein, in any of the other Credit Documents, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove untrue in any material respect on the date as of which it was made or deemed to have been made; or

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(c) Covenants.

(i) Default in the due performance or observance of any term, covenant or agreement contained in Section 7.3(a), 7.9, 7.11, 7.13 or 8.1 through 8.7 (except in the case of negative covenants contained in Sections 8.1 through 8.7, those Defaults which may occur or arise other than on account of or by affirmative or intentional act of the Borrower or event or condition which the Borrower shall with knowledge permit to exist, all of which shall be subject to the provisions of clause (ii) hereof), inclusive, or

(ii) Default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in subsections
(a), (b) or (c)(i) of this Section 9.1) contained in this Credit Agreement and such default shall continue unremedied for a period of at least 30 days after the earlier of a Responsible Officer of a Credit Party becoming aware of such default or notice thereof by the Administrative Agent or such longer period not to exceed an additional 30 days provided that the Borrower is diligently pursuing remedy of such default; or

(d) Other Credit Documents. (i) Any Credit Party shall default in the due performance or observance of any material term, covenant or agreement in any of the other Credit Documents (subject to applicable grace or cure periods, if any), or (ii) any Credit Document shall fail to be in full force and effect or to give the Administrative Agent and/or the Lenders any material part of the rights, powers and privileges purported to be created thereby; or

(e) Guaranties. The guaranty given by any Guarantor hereunder or any material provision thereof shall cease to be in full force and effect, or any Guarantor hereunder or any Person acting by or on behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations under such guaranty, or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any guaranty; or

(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to any member of the Consolidated Group; or

(g) Defaults under Other Agreements.

(i) Any member of the Consolidated Group shall default in the performance or observance (beyond the applicable grace period with respect thereto, if any) of any material obligation or condition of any contract or lease material to the Consolidated Group, taken as a whole; or

(ii) With respect to any Debt (other than Debt outstanding under this Credit Agreement) in excess of $25,000,000 in the aggregate for the Consolidated Group taken as a whole, (A) (1) any member of the Consolidated Group shall default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to any such Debt, or (2) the occurrence and continuance of a default in the observance or performance relating to such Debt or contained in any instrument or agreement

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evidencing, securing or relating thereto, or any other event or condition shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit, the holder or holders of such Debt (or trustee or agent on behalf of such holders) to cause (determined without regard to whether any notice or lapse of time is required), any such Debt to become due prior to its stated maturity; or (B) any such Debt shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof.

(h) Judgments. Any member of the Consolidated Group shall fail within 30 days of the date due and payable to pay, bond or otherwise discharge any judgment, settlement or order for the payment of money which judgment, settlement or order, when aggregated with all other such judgments, settlements or orders due and unpaid at such time, exceeds $5,000,000, and which is not stayed on appeal (or for which no motion for stay is pending) or is not otherwise being executed; or

(i) ERISA. Any of the following events or conditions, if such event or condition could reasonably be expected to have a Material Adverse Effect shall occur: (1) any "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, shall exist with respect to any Plan, or any lien shall arise on the assets of a member of the Consolidated Group or any ERISA Affiliate in favor of the PBGC or a Plan; (2) an ERISA Event shall occur with respect to a Single Employer Plan, which is, in the reasonable opinion of the Administrative Agent, likely to result in the termination of such Plan for purposes of Title IV of ERISA; (3) an ERISA Event shall occur with respect to a Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable opinion of the Administrative Agent, likely to result in (i) the termination of such Plan for purposes of Title IV of ERISA, or (ii) a member of the Consolidated Group or any ERISA Affiliate incurring any liability in connection with a withdrawal from, reorganization of (within the meaning of Section 4241 of ERISA), or insolvency of (within the meaning of Section 4245 of ERISA) such Plan; or (4) any prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall occur which may subject a member of the Consolidated Group or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which a member of the Consolidated Group or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability; or

(j) Ownership. There shall occur a Change of Control; or

(k) Bank of America Credit Agreement. An Event of Default under and as defined in the Bank of America Credit Agreement shall have occurred and be continuing.

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9.2 Acceleration; Remedies.

Upon the occurrence of an Event of Default, and at any time thereafter, the Administrative Agent may and, upon the request and direction of the Required Lenders, shall by written notice to the Credit Parties take any of the following actions:

(i) Termination of Commitments. Declare the Commitments terminated whereupon the Commitments shall be immediately terminated.

(ii) Acceleration. Declare the unpaid principal of and any accrued interest in respect of all Loans and any and all other indebtedness or obligations of any and every kind owing by the Credit Parties to the Administrative Agent and/or any of the Lenders hereunder to be due whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each of the Credit Parties.

(iii) Enforcement of Rights. Enforce any and all rights and interests created and existing under the Credit Documents.

Notwithstanding the foregoing, if an Event of Default specified in Section 9.1(f) shall occur, then the Commitments shall automatically terminate and all Loans, all accrued interest in respect thereof, all accrued and unpaid Fees and other indebtedness or obligations owing to the Administrative Agent and/or any of the Lenders hereunder automatically shall immediately become due and payable without presentment, demand, protest or the giving of any notice or other action by the Administrative Agent or the Lenders, all of which are hereby waived by the Credit Parties.

SECTION 10 AGENCY PROVISIONS

10.1 Appointment.

Each Lender hereby designates and appoints First Union National Bank as contractual representative (in such capacity, the "Administrative Agent") of such Lender to act as specified herein and the other Credit Documents, and each such Lender hereby authorizes the Administrative Agent as the Administrative Agent for such Lender, to take such action on its behalf under the provisions of this Credit Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated by the terms hereof and of the other Credit Documents, together with such other powers as are reasonably incidental thereto. Each Lender further directs and authorizes the Administrative Agent to execute releases (or similar agreements) to give effect to the provisions of this Credit Agreement and the other Credit Documents. Notwithstanding any provision to the contrary elsewhere herein and in the other Credit Documents, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or any of the other Credit Documents, or shall otherwise exist against the Administrative Agent. The provisions of this Section are solely for the benefit of the Administrative Agent and the

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Lenders and none of the Credit Parties shall have any rights as a third party beneficiary of the provisions hereof. In performing its functions and duties under this Credit Agreement and the other Credit Documents, the Administrative Agent shall act solely as Administrative Agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for any Credit Party or any of their respective Affiliates.

10.2 Delegation of Duties.

The Administrative Agent may execute any of its duties hereunder or under the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

10.3 Exculpatory Provisions.

The Administrative Agent and its officers, directors, employees, agents, attorneys-in-fact or affiliates shall not be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection herewith or in connection with any of the other Credit Documents (except for its or such Person's own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any of the Credit Parties contained herein or in any of the other Credit Documents or in any certificate, report, document, financial statement or other written or oral statement referred to or provided for in, or received by the Administrative Agent under or in connection herewith or in connection with the other Credit Documents, or enforceability or sufficiency therefor of any of the other Credit Documents, or for any failure of any Credit Party to perform its obligations hereunder or thereunder. The Administrative Agent shall not be responsible to any Lender for the effectiveness, genuineness, validity, enforceability, collectability or sufficiency of this Credit Agreement, or any of the other Credit Documents or for any representations, warranties, recitals or statements made herein or therein or made by the Borrower or any Credit Party in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by the Administrative Agent to the Lenders or by or on behalf of the Credit Parties to the Administrative Agent or any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans, the use of the Letters of Credit or of the existence or possible existence of any Default or Event of Default or to inspect the properties, books or records of the Credit Parties or any of their respective Affiliates.

10.4 Reliance on Communications.

The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to any of the Credit Parties, independent accountants and other experts selected by the Administrative Agent

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with reasonable care). The Administrative Agent may deem and treat the Lenders as the owners of their respective interests hereunder for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent in accordance with Section 11.3(b) hereof. The Administrative Agent and the Borrower shall be fully justified in failing or refusing to take any action under this Credit Agreement or under any of the other Credit Documents unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any of the other Credit Documents in accordance with a request of the Required Lenders (or to the extent specifically provided in Section 11.6, all the Lenders) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders (including their successors and assigns).

10.5 Notice of Default.

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or a Credit Party referring to the Credit Document, describing such Default or Event of Default and stating that such notice is a "notice of default." In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders.

10.6 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender expressly acknowledges that each of the Administrative Agent and its officers, directors, employees, agents, attorneys-in-fact or affiliates has not made any representations or warranties to it and that no act by the Administrative Agent or any affiliate thereof hereinafter taken, including any review of the affairs of any Credit Party or any of their respective Affiliates, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Borrower, the other Credit Parties or their respective Affiliates and made its own decision to make its Loans hereunder and enter into this Credit Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Borrower, the other Credit Parties and their respective Affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial or other conditions, prospects or creditworthiness of the Borrower, the other Credit Parties or any of

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their respective Affiliates which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

10.7 Indemnification.

The Lenders agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective Commitments (or if the Commitments have expired or been terminated, in accordance with the respective principal amounts of outstanding Loans), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, reasonable costs, reasonable expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the final payment of all of the obligations of the Borrower hereunder and under the other Credit Documents) be imposed on, incurred by or asserted against the Administrative Agent in its capacity as such in any way relating to or arising out of this Credit Agreement or the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent resulting from the gross negligence or willful misconduct of the Administrative Agent. If any indemnity furnished to the Administrative Agent for any purpose shall, in the opinion of the Administrative Agent, be insufficient or become impaired, the Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section shall survive the repayment of the Loans, and other obligations under the Credit Documents and the termination of the Commitments hereunder.

10.8 Administrative Agent in its Individual Capacity.

The Administrative Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower, its Subsidiaries or their respective Affiliates as though the Administrative Agent were not the Administrative Agent hereunder. With respect to the Loans made by and all obligations of the Borrower hereunder and under the other Credit Documents, the Administrative Agent shall have the same rights and powers under this Credit Agreement as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity.

10.9 Successor Administrative Agent.

The Administrative Agent may, at any time, resign upon 20 days' written notice to the Lenders and the Borrower, and may be removed, upon show of cause, by the Required Lenders upon 30 days' written notice to the Administrative Agent. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the notice of resignation or notice of removal, as appropriate, then the retiring Administrative Agent shall select a successor Administrative Agent

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provided such successor is a Lender hereunder or a commercial bank organized under the laws of the United States of America or of any State thereof and has a combined capital and surplus of at least $400,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations as Administrative Agent, as appropriate, under this Credit Agreement and the other Credit Documents and the provisions of this Section 10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Credit Agreement.

SECTION 11 MISCELLANEOUS

11.1 Notices.

Except as otherwise expressly provided herein, all notices and other communications shall have been duly given and shall be effective (i) when delivered, (ii) when transmitted via telecopy (or other facsimile device) to the number set out below, (iii) the day following the day on which the same has been delivered prepaid to a reputable national overnight air courier service, or (iv) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective parties at the address, in the case of the Borrower, Guarantors and the Administrative Agent, set forth below, and, in the case of the Lenders, set forth on Schedule 11.1, or at such other address as such party may specify by written notice to

the other parties hereto:

if to the Borrower or the Guarantors:

United Dominion Realty Trust, Inc.
400 East Cary Street
Richmond, Virginia 23219-3816

Attn: Chief Financial Officer Telephone: (804) 819-1891 Telecopy: (804) 780-0431

with a copy to:

United Dominion Realty Trust, Inc. 400 East Cary Street
Richmond, Virginia 23219-3816 Attn: General Counsel
Telephone: (804) 819-1885 Telecopy: (804) 788-4607

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if to the Administrative Agent:

First Union National Bank

One First Union Center, DC-6 301 South College Street
Charlotte, North Carolina 28288-0166 Attn: John A. Schissel
Telephone: (704) 383-1967 Telecopy: (704) 383-6205

11.2 Right of Set-Off.

In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Lender is authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply (subject to Section 3.13) any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of any Credit Party against obligations and liabilities of such Person to such Lender hereunder, under the Notes, the other Credit Documents or otherwise, irrespective of whether such Lender shall have made any demand hereunder and although such obligations, liabilities or claims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto. Any Person purchasing a participation in the Loans and Commitments hereunder pursuant to Section 3.13 or Section 11.3(d) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder. It is specifically acknowledged and agreed that no right of set-off shall be exercised against accounts identified as holding tenant deposit accounts or transfer agent accounts which represent obligations to third parties.

11.3 Benefit of Agreement.

(a) Generally. This Credit Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided that none of the Credit Parties may assign or transfer any of its interests without prior written consent of the Lenders; provided further that the rights of each Lender to transfer, assign or grant participations in its rights and/or obligations hereunder shall be limited as set forth in this Section 11.3, provided however that nothing herein shall prevent or prohibit any Lender from (i) pledging its Loans hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank, or (ii) granting assignments or selling participations in such Lender's Loans and/or Commitments hereunder to its parent company and/or to any Affiliate or Subsidiary of such Lender.

(b) Assignments. Each Lender may with the prior written consent of the Administrative Agent and the Borrower (provided that the consent of the Borrower shall not be unreasonably delayed or withheld and provided further that the consent of the Borrower shall not be

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required during the existence and continuation of an Event of Default), assign all or a portion of its rights and obligations hereunder, pursuant to an assignment agreement substantially in the form of Schedule 11.3(b), to an Eligible Assignee provided that (i) any such assignment (other than any assignment to an existing Lender) shall be in a minimum aggregate amount of $5,000,000 (or, if less, the remaining amount of the Commitment of the assigning Lender) of the Commitments and in integral multiples of $1,000,000 above such amount and (ii) each such assignment shall be of a constant, not varying, percentage of all such Lender's rights and obligations under this Credit Agreement. Any assignment hereunder shall be effective upon delivery to the Administrative Agent of written notice of the assignment together with a transfer fee of $5,000 payable to the Administrative Agent for its own account from and after the later of (i) the effective date specified in the applicable assignment agreement and (ii) the date of recording of such assignment in the Register pursuant to the terms of subsection (c) below. The assigning Lender will give prompt notice to the Administrative Agent and the Borrower of any such assignment. Upon the effectiveness of any such assignment (and after notice to, and (to the extent required pursuant to the terms hereof), with the consent of, the Borrower as provided herein), the assignee shall become a "Lender" for all purposes of this Credit Agreement and the other Credit Documents and, to the extent of such assignment, the assigning Lender shall be relieved of its obligations hereunder to the extent of the Loans and Commitment components being assigned. Along such lines the Borrower agrees that upon notice of any such assignment and surrender of the appropriate Note or Notes, it will promptly provide to the assigning Lender and to the assignee separate promissory notes in the amount of their respective interests substantially in the form of the original Note (but with notation thereon that it is given in substitution for and replacement of the original Note or any replacement notes thereof). If the assignee is not a United States person under Section 7701(a)(30) of the Code, it shall deliver to the Credit Parties and the Administrative Agent certification as to exemption from deduction or withholding of Non-Excluded Taxes in accordance with Section 3.10. By executing and delivering an assignment agreement in accordance with this Section 11.3(b), the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim; (ii) except as set forth in clause (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto or the financial condition of any Credit Party or any of their respective Affiliates or the performance or observance by any Credit Party of any of its obligations under this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (iii) such assignee represents and warrants that it is legally authorized to enter into such assignment agreement; (iv) such assignee confirms that it has received a copy of this Credit Agreement, the other Credit Documents and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such assignment agreement;
(v) such assignee will independently and without reliance upon the Administrative Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Credit Agreement and the other Credit Documents; (vi) such assignee appoints and

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authorizes the Administrative Agent to take such action on its behalf and to exercise such powers under this Credit Agreement or any other Credit Document as are delegated to the Administrative Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Credit Agreement and the other Credit Documents are required to be performed by it as a Lender.

(c) Maintenance of Register. The Administrative Agent shall maintain at one of its offices in Charlotte, North Carolina a copy of each Lender assignment agreement delivered to it in accordance with the terms of subsection
(b) above and a register for the recordation of the identity of the principal amount, type and Interest Period of each Loan outstanding hereunder, the names, addresses and the Commitments of the Lenders pursuant to the terms hereof from time to time (the "Register"). The Administrative Agent will make reasonable efforts to maintain the accuracy of the Register and to promptly update the Register from time to time, as necessary. The entries in the Register shall be conclusive in the absence of manifest error and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Credit Agreement. The Register shall be available for inspection by the Borrower and each Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Each Lender may sell, transfer, grant or assign participations to any Person in all or any part of such Lender's interests and obligations hereunder; provided that (i) such selling Lender shall remain a "Lender" for all purposes under this Credit Agreement (such selling Lender's obligations under the Credit Documents remaining unchanged) and the participant shall not constitute a Lender hereunder, (ii) no such participant shall have, or be granted, rights to approve any amendment or waiver relating to this Credit Agreement or the other Credit Documents except to the extent any such amendment or waiver would (A) reduce the principal of or rate of interest on or Fees in respect of any Loans in which the participant is participating, (B) postpone the date fixed for any payment of principal (including extension of the Termination Date or the date of any mandatory prepayment), interest or Fees in which the participant is participating, or (C) except as expressly provided in the Credit Documents, release any Guarantor from its guaranty obligations hereunder, and
(iii) sub-participations by the participant (except to an affiliate, parent company or affiliate of a parent company of the participant) shall be prohibited. In the case of any such participation, the participant shall not have any rights under this Credit Agreement or the other Credit Documents (the participant's rights against the selling Lender in respect of such participation to be those set forth in the participation agreement with such Lender creating such participation) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation, provided, however, that such participant shall be entitled to receive additional amounts under Sections 3.6, 3.9, 3.10 and 3.11 on the same basis as if it were a Lender.

11.4 No Waiver; Remedies Cumulative.

No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Administrative Agent or any Lender and any of the Credit Parties shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of

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any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender would otherwise have. No notice to or demand on any Credit Party in any case shall entitle the Borrower or any other Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.

11.5 Payment of Expenses, etc.

The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and expenses (A) of the Administrative Agent in connection with the negotiation, preparation, execution and delivery and administration of this Credit Agreement and the other Credit Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees and expenses of Alston & Bird LLP, special counsel to the Administrative Agent subject to any applicable agreement regarding such fees), and any amendment, waiver or consent relating hereto and thereto including, but not limited to, any such amendments, waivers or consents resulting from or related to any work-out, renegotiation or restructure relating to the performance by the Credit Parties under this Credit Agreement and (B) of the Administrative Agent and the Lenders in connection with enforcement of the Credit Documents and the documents and instruments referred to therein (including, without limitation, in connection with any such enforcement, the reasonable fees and disbursements of counsel for the Administrative Agent and each of the Lenders); (ii) pay and hold each of the Lenders harmless from and against any and all present and future stamp and other similar taxes with respect to the foregoing matters and save each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes; and (iii) indemnify each Lender, its officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of (A) any investigation, litigation or other proceeding (whether or not any Lender is a party thereto) related to the entering into and/or performance of any Credit Document or the use of proceeds of any Loans (including other extensions of credit) hereunder or the consummation of any other transactions contemplated in any Credit Document, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding or (B) the presence or Release of any Materials of Environmental Concern at, under or from any Property owned, operated or leased by the Borrower or any of its Subsidiaries, or the failure by the Borrower or any of its Subsidiaries to comply with any Environmental Law (but excluding, in the case of either of clause (A) or (B) above, any such losses, liabilities, claims, damages or expenses to the extent incurred by reason of gross negligence or willful misconduct on the part of the Person to be indemnified).

11.6 Amendments, Waivers and Consents

Neither this Credit Agreement nor any other Credit Document nor any of the terms hereof or thereof may be amended, changed, waived, discharged or terminated unless such amendment, change, waiver, discharge or termination is in writing entered into by, or approved in writing by, the

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Required Lenders and (except in the case of a waiver granted by the Required Lenders) the Borrower, provided, however, that:

(a) without the consent of each Lender affected thereby, no such amendment may:

(i) extend the final maturity of any Loan, or extend or waive any principal amortization payment of any Loan, or any portion thereof,

(ii) reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) thereon or Fees hereunder,

(iii) reduce or waive the principal amount of any Loan,

(iv) increase the Commitment of a Lender over the amount thereof in effect (it being understood and agreed that a waiver of any Default or Event of Default (other than an Event of Default of the type described in Section 9.1(f) hereof) or mandatory reduction in the Commitments shall not constitute a change in the terms of any Commitment of any Lender),

(v) except (A) as the result of or in connection with a dissolution, merger or disposition of a Subsidiary permitted under Section 8.3 or (B) in connection with the release of Guarantors pursuant to the terms of Section 4.8, release the Borrower or substantially all of the other Credit Parties from its or their obligations under the Credit Documents,

(vi) amend, modify or waive any provision of this Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 9.1(a), 11.2, 11.3, 11.5 or 11.9,

(vii) reduce any percentage specified in, or otherwise modify, the definition of Required Lenders, or

(viii) consent to the assignment or transfer by the Borrower (or another Credit Party) of any of its rights and obligations under (or in respect of) the Credit Documents except as permitted thereby; and

(b) without the consent of the Administrative Agent, no provision of
Section 10 may be amended.

Notwithstanding the fact that the consent of all the Lenders is required in certain circumstances as set forth above, (x) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein and (y) the Required Lenders may consent to allow a Credit Party to use cash collateral in the context of a bankruptcy or insolvency proceeding.

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11.7 Counterparts.

This Credit Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Credit Agreement to produce or account for more than one such counterpart.

11.8 Headings.

The headings of the Sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Credit Agreement.

11.9 Survival.

All indemnities set forth herein, including, without limitation, in Section 2.2(i), 3.9, 3.11, 10.7 or 11.5 shall survive the execution and delivery of this Credit Agreement, the making of the Loans, the repayment of the Loans and other obligations under the Credit Documents and the termination of the Commitments hereunder, and all representations and warranties made by the Credit Parties herein shall survive delivery of the Notes and the making of the Loans hereunder.

11.10 Governing Law; Submission to Jurisdiction; Venue.

(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA. Any legal action or proceeding with respect to this Credit Agreement or any other Credit Document may be brought in the courts of the Commonwealth of Virginia in the City of Richmond, or of the United States for the Eastern District of Virginia, and, by execution and delivery of this Credit Agreement, each of the Credit Parties hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the nonexclusive jurisdiction of such courts. Each of the Credit Parties further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at the address set out for notices pursuant to Section 11.1, such service to become effective three (3) days after such mailing. Nothing herein shall affect the right of the Administrative Agent to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against any Credit Party in any other jurisdiction.

(b) Each of the Credit Parties hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Credit Agreement or any other Credit Document brought in the courts referred to in subsection (a) hereof and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY

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ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

11.11 Severability.

If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.

11.12 Entirety.

This Credit Agreement together with the other Credit Documents represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated herein and therein.

11.13 Binding Effect; Termination.

(a) This Credit Agreement shall become effective at such time on or after the Closing Date when it shall have been executed by the Borrower, the Guarantors and the Administrative Agent, and the Administrative Agent shall have received copies hereof (telefaxed or otherwise) which, when taken together, bear the signatures of each Lender, and thereafter this Credit Agreement shall be binding upon and inure to the benefit of the Borrower, the Guarantors, the Administrative Agent and each Lender and their respective successors and assigns.

(b) The term of this Credit Agreement shall be until no Loans or any other amounts payable hereunder or under any of the other Credit Documents shall remain outstanding and until all of the Commitments hereunder shall have expired or been terminated.

11.14 Source of Funds.

Each of the Lenders hereby represents and warrants to the Borrower that at least one of the following statements is an accurate representation as to the source of funds to be used by such Lender in connection with the financing hereunder:

(a) no part of such funds constitutes assets allocated to any separate account maintained by such Lender in which any employee benefit plan (or its related trust) has any interest;

(b) to the extent that any part of such funds constitutes assets allocated to any separate account maintained by such Lender, such Lender has disclosed to the Borrower the name of each employee benefit plan whose assets in such account exceed 10% of the total assets of such account as of the date of such purchase (and, for purposes of this subsection (b), all employee benefit plans maintained by the same employer or employee organization are deemed to be a single plan);

-64-

(c) to the extent that any part of such funds constitutes assets of an insurance company's general account, such insurance company has complied with all of the requirements of the regulations issued under Section 401(c)(1)(A) of ERISA; or

(d) such funds constitute assets of one or more specific benefit plans which such Lender has identified in writing to the Borrower.

As used in this Section 11.14, the terms "employee benefit plan" and "separate account" shall have the respective meanings assigned to such terms in Section 3 of ERISA.

11.15 Conflict.

To the extent that there is a conflict or inconsistency between any provision hereof, on the one hand, and any provision of any Credit Document, on the other hand, this Credit Agreement shall control.

[Signature Pages to Follow]

-65-

Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and delivered as of the date first above written.

BORROWER:                  UNITED DOMINION REALTY TRUST, INC.,
--------
                           a Virginia corporation


                           By:______________________________________
                           Name:____________________________________
                           Title:___________________________________


GUARANTORS:                UNITED DOMINION REALTY, L.P.,
----------
                           a Virginia limited partnership

                           By:    United Dominion Realty Trust, Inc., a Virginia
                                  corporation, general partner


                                  By:___________________________________________
                                  Name:_________________________________________
                                  Title:________________________________________

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

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, sole member

By:___________________________________________ Name:_________________________________________ Title:________________________________________

UDR SOUTH CAROLINA TRUST,
a Maryland real estate investment trust

By:___________________________________________ Name:_________________________________________ Title:________________________________________


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

UDR WESTERN RESIDENTIAL, INC.,
a Virginia corporation

By:__________________________
Name:________________________
Title:_______________________

SOUTH WEST REIT HOLDING, INC.,
a Texas corporation

By:__________________________
Name:________________________
Title:_______________________

UDR OF TENNESSEE, L.P.,
a Virginia limited partnership

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By:__________________________
Name:________________________
Title:_______________________

UDR TEXAS PROPERTIES, L.P.,
a Delaware limited partnership

By:_________________________
Name:_______________________
Title:______________________


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

UDR CALIFORNIA PROPERTIES, LLC,
a Virginia limited liability company

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, sole member

By:____________________________________
Name:__________________________________
Title:_________________________________

UDR VIRGINIA PROPERTIES, LLC,
a Virginia limited liability company

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, sole member

By:____________________________________
Name:__________________________________
Title:_________________________________

UDR FLORIDA PROPERTIES, LLC,
a Virginia limited liability company

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, sole member

By:____________________________________
Name:__________________________________
Title:_________________________________

ASR INVESTMENTS CORPORATION,
a Maryland corporation

By:____________________________________
Name:__________________________________
Title:_________________________________


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

SWPT II ARIZONA PROPERTIES, INC.,
an Arizona corporation

By:___________________________
Name:_________________________
Title:________________________

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

By: UDR Holdings, LLC,
a Virginia limited liability company, general partner

By: United Dominion Realty, L.P.,
a Virginia limited partnership, sole member

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By:_____________________________
Name:___________________________
Title:__________________________

AMERICAN APARTMENT
COMMUNITIES HOLDINGS, INC.,
a Delaware corporation

By:___________________________
Name:_________________________
Title:________________________


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

AAC FUNDING PARTNERSHIP II,
a Delaware partnership

By: United Dominion Realty, L.P.,
a Virginia limited partnership, general partner

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By:_________________________________________ Name:_______________________________________ Title:______________________________________

AAC FUNDING PARTNERSHIP III,
a Delaware partnership

By: United Dominion Realty, L.P.,
a Virginia limited partnership, general partner

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By:_________________________________________ Name:_______________________________________ Title:______________________________________

FINISTERRA APARTMENTS L.L.C.,
an Arizona limited liability company

By:______________________________________ Name:____________________________________ Title:___________________________________


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

POLO CHASE VENTURE LIMITED PARTNERSHIP,
a Delaware limited partnership

By: American Apartment Communities Holdings, Inc.,
a Delaware corporation, general partner

By:_________________________________
Name:_______________________________
Title:______________________________

GOVERNOUR'S SQUARE OF COLUMBUS CO.,
an Ohio limited partnership

By: United Dominion Realty, L.P.,
a Virginia limited partnership, general partner

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By:_________________________________
Name:_______________________________
Title:______________________________

NORTHBAY PROPERTIES II, L.P.
a California limited partnership

By: United Dominion Realty, L.P.,
a Virginia limited partnership, general partner

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By:_________________________________
Name:_______________________________
Title:______________________________


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

PARKER'S LANDING VENTURE I,
a Florida partnership

By: United Dominion Realty, L.P.,
a Virginia limited partnership, general partner

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By: _____________________________________________ Name: ___________________________________________ Title: __________________________________________

REGENCY PARK, L.P.,
an Indiana limited partnership

By: United Dominion Realty, L.P.,
a Virginia limited partnership, general partner

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By: _____________________________________________ Name: ___________________________________________ Title: __________________________________________

WINTERLAND SAN FRANCISCO PARTNERS,
a California limited partnership

By: United Dominion Realty, L.P.,
a Virginia limited partnership, general partner

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By: _____________________________________________ Name: ___________________________________________ Title: __________________________________________


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

WOODLAKE VILLAGE, L.P
a California limited partnership

By: United Dominion Realty, L.P.,
a Virginia limited partnership, general partner

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By: _____________________________________________ Name: ___________________________________________ Title: __________________________________________

UDRT OF ALABAMA, INC.,
an Alabama corporation

By: _______________________________________ Name: _____________________________________ Title: ____________________________________

SUNSET COMPANY,
an Ohio partnership

By: United Dominion Realty Trust, Inc.,
a Virginia corporation, general partner

By: ____________________________________________ Name: __________________________________________ Title: _________________________________________


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

LENDERS:                 FIRST UNION NATIONAL BANK,
-------
                         individually in its capacity as a
                         Lender and in its capacity as Administrative Agent


                         By: ____________________________________
                         Name:
                         Title:

                                                               Signature Page to
                                              United Dominion Realty Trust, Inc.
                                  Credit Agreement dated as of November 14, 2000


                         SUNTRUST BANK


                         By: ____________________________________
                         Name:
                         Title:

                                                               Signature Page to
                                              United Dominion Realty Trust, Inc.
                                  Credit Agreement dated as of November 14, 2000

KEYBANK NATIONAL ASSOCIATION

By: ____________________________________
Name:
Title:


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

PNC BANK, NATIONAL ASSOCIATION

By: ____________________________________
Name:
Title:


Signature Page to United Dominion Realty Trust, Inc. Credit Agreement dated as of November 14, 2000

BANK OF AMERICA, N.A.

By: ____________________________________
Name:
Title:


Schedule 2.1(a)
Schedule of Lenders and Commitments

Lender                        Commitment                  Commitment %

First Union National Bank        $ 32,000,000.00                    32.0%
Bank of America, N.A.            $ 25,000,000.00                    25.0%
KeyBank National
 Association                     $ 25,000,000.00                    25.0%
PNC Bank, National
 Association                     $ 13,000,000.00                    13.0%
SunTrust Bank                    $  5,000,000.00                     5.0%

  Total                          $100,000,000.00                   100.0%


Schedule 2.1(b)(i)

FORM OF NOTICE OF BORROWING

First Union National Bank
One First Union Center, DC-6
301 South College Street
Charlotte, North Carolina 28288-0166
Attn: John A. Schissel

Re: Credit Agreement dated as of November 14, 2000 (as amended and modified, the "Credit Agreement") among United Dominion Realty Trust, Inc., the Guarantors and Lenders identified therein and First Union National Bank, as Administrative Agent. Terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement.

Ladies and Gentlemen:

The undersigned, UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, being the Borrower under the above-referenced Credit Agreement hereby gives notice pursuant to Section 5.1 of the Credit Agreement of a request for Loans pursuant to the Credit Agreement as follows

(A)  Date of Borrowing
     (which is a Business Day)    _______________________

(B)  Principal Amount of
     Borrowing                    $100,000,000

(C)  Interest rate basis          _______________________

(D)  Interest Period and the
     last day thereof             _______________________

In accordance with the requirements of Section 5.2 of the Credit Agreement, the undersigned Borrower hereby certifies that:

(a) The representations and warranties contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects as of the date of this request, and will be true and correct after giving effect to the requested Extension of Credit (except for those which expressly relate to an earlier date).

(b) No Default or Event of Default exists, or will exist after giving effect to the requested Extension of Credit.

(c) As to any Credit Party, no involuntary action has been commenced under applicable bankruptcy, insolvency or other similar law in effect, or any case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee,


sequestrator (or similar official) as to any Credit Party or as to any substantial part of the property of any Credit Party or for the winding up or liquidation of its affairs, and remains undismissed, undischarged or unbonded.

(d) No circumstances, events or conditions have occurred since the date of the audited financial statements referenced in Section 6.1 of the Credit Agreement which would have a Material Adverse Effect.

(e) All conditions set forth in Section 2.1 as to the making of the Loans have been satisfied.

Very truly yours,

UNITED DOMINION REALTY TRUST, INC.

By: ________________________________
Name: ______________________________
Title: _____________________________


Schedule 2.1(e)

FORM OF NOTE

November 14, 2000

FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the order of ________________________, and its successors and assigns, on or before the Termination Date to the office of the Administrative Agent in immediately available funds as provided in the Credit Agreement, the aggregate unpaid principal amount of the Loan made by such Lender to the Borrower, together with interest thereon at the rates and as provided in the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement dated as of November 14, 2000 (as amended and modified, the "Credit Agreement") among United Dominion Realty Trust, Inc., the Guarantors and Lenders identified therein and First Union National Bank, as Administrative Agent. Terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement.

The holder may endorse and attach a schedule to reflect all payments and prepayments on this Note; provided that any failure to endorse such information shall not affect the obligation of the Borrower to pay amounts evidenced hereby.

Upon the occurrence of an Event of Default, all amounts evidenced by this Note may, or shall, become immediately due and payable as provided in the Credit Agreement without presentment, demand, protest or notice of any kind, all of which are waived by the Borrower. In the event payment of amounts evidenced by this Note is not made at any stated or accelerated maturity, the Borrower agrees to pay, in addition to principal and interest, all costs of collection, including reasonable attorneys' fees.

This Note and the Loan and amounts evidenced hereby may be transferred only as provided in the Credit Agreement.

This Note shall be governed by, and construed and interpreted in accordance with, the law of the Commonwealth of Virginia.

IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed as of the date first above written.

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By: __________________________________
Name: ________________________________
Title: _______________________________


Schedule 3.2

Form of Notice of Extension/Conversion

First Union National Bank,
as Administrative Agent for the Lenders




Attention: _________________________

Re: Credit Agreement dated as of November 14, 2000 (as amended and modified, the "Credit Agreement") among United Dominion Realty Trust, Inc., the Guarantors and Lenders identified therein and First Union National Bank, as Administrative Agent. Terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement.

Ladies and Gentlemen:

The undersigned, UNITED DOMINION REALTY TRUST, INC. (the "Borrower"), refers to the Credit Agreement. The Borrower hereby gives notice pursuant to
Section 3.2 of the Credit Agreement that it requests an extension or conversion of a Loan outstanding under the Credit Agreement, and in connection therewith sets forth below the terms on which such extension or conversion is requested to be made:

(A)  Date of Extension or Conversion
     (which is the last day of the
     the applicable Interest Period)      _______________________

(B)  Principal Amount of
     Extension or Conversion              _______________________

(C)  Interest rate basis                  _______________________

(D)  Interest Period and the
     last day thereof                     _______________________

In accordance with the requirements of Section 5.2 of the Credit Agreement, the undersigned Borrower hereby certifies that:

(a) The representations and warranties contained in the Credit Agreement and the other Credit Documents are true and correct in all material respects as of the date of this request, and will be true and correct after giving effect to the requested Extension of Credit (except for those which expressly relate to an earlier date).

(b) No Default or Event of Default exists, or will exist after giving effect to the requested Extension of Credit.


(c) As to any Credit Party, no involuntary action has been commenced under applicable bankruptcy, insolvency or other similar law in effect, or any case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) as to any Credit Party or as to any substantial part of the property of any Credit Party or for the winding up or liquidation of its affairs, and remains undismissed, undischarged or unbonded.

(d) No circumstances, events or conditions have occurred since the date of the audited financial statements referenced in Section 6.1 of the Credit Agreement which would have a Material Adverse Effect.

Very truly yours,

UNITED DOMINION REALTY TRUST, INC.

By: ______________________________
Name: ____________________________
Title: ___________________________


Schedule 5.1(e)(v)

Officer's Certificate

Pursuant to Section 5.1(e)(v) of the Credit Agreement (the "Credit Agreement"), dated as of November 14, 2000, among UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, the Guarantors and Lenders identified therein and First Union National Bank, as Administrative Agent, the undersigned ____________________ Secretary of _________________________ (the "Corporation") hereby certifies as follows:

1. Attached hereto as Annex I is a true and complete copy of resolutions duly adopted by the Board of Directors of the Corporation on __________________, _____. The attached resolutions have not been rescinded or modified and remain in full force and effect. The attached resolutions are the only corporate proceedings of the Corporation now in force relating to or affecting the matters referenced to therein.

2. Attached hereto as Annex II is a true and complete copy of the By-laws of the Corporation as in effect on the date hereof.

3. Attached hereto as Annex III is a true and complete copy of the Certificate of Incorporation of the Corporation and all amendments thereto as in effect on the date hereof.

4. The following persons are now duly elected and qualified officers of the Corporation, holding the offices indicated, and the signature appearing opposite his name below is his true and genuine signature, and such officer is duly authorized to execute and deliver on behalf of the Corporation the Credit Agreement, the Notes to be issued pursuant thereto and the other Credit Documents and to act as a Responsible Officer on behalf of the Corporation under the Credit Agreement:

         Name                  Office                        Signature
         ----                  ------                        ---------

___________________    _______________________          ____________________


IN WITNESS WHEREOF, the undersigned has hereunto set his/her name and affixed the corporate seal of the Corporation.

_______________________________, Secretary

(CORPORATE SEAL)

Date: __________________, _____

I, ___________________, ___________________ of ________________________, hereby certify that ______________________, whose genuine signature appears above, is, and has been at all times since ________________________, a duly elected, qualified and acting _________________ of ____________________________________.

___________________________________ of
_________________________, _____

Schedule 6.3

Qualifications Concerning Organization, Existence and Compliance with Law


Schedule 6.6

Material Litigation


Schedule 6.12

Subsidiaries


Schedule 7.2(b)

Form of Officer's Compliance Certificate

This Certificate is delivered in accordance with the provisions of Section 7.2(b) of that Credit Agreement dated as of November 14, 2000 (as amended, modified and supplemented, the "Credit Agreement") among UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, the Guarantors and Lenders identified therein, and First Union National Bank, as Administrative Agent. Terms used but not otherwise defined herein shall have the same meanings provided in the Credit Agreement.

The undersigned, being a Responsible Officer of UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, hereby certifies, in my official capacity and not in my individual capacity, that to the best of my knowledge and belief:

(a) the financial statements of the Borrower fairly present the financial condition of the parties covered by such financial statements in all material respects;

(b) during the period the Credit Parties have observed or performed all of their covenants and other agreements in all material respects, and satisfied in all material respects every material condition, contained in the Credit Agreement to be observed, performed or satisfied by them; and

(c) the undersigned has no actual knowledge of any Default or Event of Default.

Detailed calculations demonstrating (A) compliance with the financial covenants set out in Section 7.9 of the Credit Agreement, (B) compliance with Section 7.11(a) and (C) the portion of Consolidated Unencumbered Realty represented by Non-Guarantor Subsidiaries, are attached to this Certificate.

This the ___________ day of ___________________, 200___.

UNITED DOMINION REALTY TRUST, INC.

By: ______________________________
Name: ____________________________
Title: ___________________________


Attachment to Officer's Certificate

Computation of Financial Covenants


Schedule 7.11

Form of Joinder Agreement

THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________, 200__, is by and between _____________________, a ___________________ (the "Applicant Guarantor"), and FIRST UNION NATIONAL BANK, in its capacity as Administrative Agent under that certain Credit Agreement dated as of November 14, 2000 (as amended and modified, the "Credit Agreement") by and among UNITED DOMINION REALTY TRUST, INC., a Virginia corporation, the Guarantors and Lenders identified therein and First Union National Bank, as Administrative Agent. All of the defined terms in the Credit Agreement are incorporated herein by reference.

The Applicant Guarantor has indicated its desire to become a Guarantor or is required by the terms of Section 7.11 of the Credit Agreement to become, a Guarantor under the Credit Agreement.

Accordingly, the Applicant Guarantor hereby agrees as follows with the Administrative Agent, for the benefit of the Lenders:

1. The Applicant Guarantor hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the Applicant Guarantor will be deemed to be a party to the Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement and the other Credit Documents, and shall have all of the obligations of a Guarantor thereunder as if it had executed the Credit Agreement and the other Credit Documents. The Applicant Guarantor agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Documents, including without limitation (i) all of the affirmative and negative covenants set forth in Sections 7 and 8 of the Credit Agreement and (ii) all of the undertakings and waivers set forth in Section 4 of the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the Applicant Guarantor hereby (A) jointly and severally together with the other Guarantors, guarantees to each Lender and the Administrative Agent as provided in Section 4 of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof and (B) agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Applicant Guarantor will, jointly and severally together with the other Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.

2. The Applicant Guarantor acknowledges and confirms that it has received a copy of the Credit Agreement and the Schedules and Exhibits thereto. The information on the Schedules to the Credit Agreement is amended to provide the information shown on the attached Schedule A.

3. The Applicant Guarantor hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the Applicant Guarantor under Section 4 of the Credit Agreement upon the execution of this Joinder Agreement by the Applicant Guarantor.

4. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.

5. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the Commonwealth of Virginia.

IN WITNESS WHEREOF, the Applicant Guarantor has caused this Joinder Agreement to be duly executed by its authorized officers, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of the day and year first above written.

APPLICANT GUARANTOR

By: ____________________________________
Name: __________________________________
Title: _________________________________

Address for Notices:

Attn: __________________________________
Telephone: _____________________________
Telecopy: ______________________________

Acknowledged and accepted:

FIRST UNION NATIONAL BANK,
as Administrative Agent

By: ____________________________________
Name: __________________________________
Title: _________________________________


Schedule A

to Joinder Agreement

                               Address for
Applicant Guarantor              Notices
-------------------              -------


Schedule 8.7

REMICs and Other Special Subsidiaries


Schedule 11.1

Schedule of Lenders' Addresses

First Union National Bank            First Union National Bank
                                     One First Union Center, DC-6
                                     301 South College Street
                                     Charlotte, North Carolina 28288-0166
                                     Attn: John A. Schissel
                                     Telephone: (704) 383-1967
                                     Telecopy:  (704) 383-6205

Bank of America, N.A.                100 North Tryon Street
                                     15/th/ Floor
                                     NC1-007-1508
                                     Charlotte, NC 28255
                                     Attn: Kevin M. McCullough
                                           Vice President
                                     Telephone: (704) 387-2707
                                     Facsimile: (704) 388-8841

SunTrust Bank                        8245 Boone Blvd.
                                     Suite 820
                                     Vienna, VA 22182
                                     Attn: Nancy B. Richards
                                           Vice President
                                     Telephone: (703) 902-9039
                                     Facsimile: (703) 902-9245

KeyBank National Association         127 Public Square, 6/th/ floor
                                     Cleveland, Ohio 44114
                                     Attn: Mary Ellen Fowler
                                           Vice President
                                     Telephone: (216) 689-4975
                                     Facsimile: (216) 689-4997

PNC Bank, National Association       1401 Eye Street, NW, Suite 200
                                     Washington, DC 20005
                                     Attn: Timothy P. Gleeson
                                     Telephone: (202) 393-2226
                                     Facsimile: (202) 393-1545


                                     With copies to:

                                     249 5th Avenue, 19th Floor
                                     Pittsburgh, PA 15222
                                     Attn: Denise Giacomino
                                     Telephone: (412) 762-4319
                                     Facsimile: (412) 762-5754


Schedule 11.3(b)

Form of Assignment and Acceptance

THIS ASSIGNMENT AND ACCEPTANCE dated as of _________________________, 200__ is entered into between THE LENDER IDENTIFIED ON THE SIGNATURE PAGES AS THE "ASSIGNOR" (the "Assignor") and THE PARTIES IDENTIFIED ON THE SIGNATURE PAGES AS "ASSIGNEES" ("Assignee").

Reference is made to that Credit Agreement dated as of November 14, 2000 (as amended and modified, the "Credit Agreement") among UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (the "Borrower"), the Guarantors and Lenders identified therein and First Union National Bank, as Administrative Agent. Terms defined in the Credit Agreement are used herein with the same meanings.

1. The Assignor hereby sells and assigns, without recourse, to the Assignees, and the Assignees hereby purchase and assume, without recourse, from the Assignor, effective as of the Effective Date shown below, those rights and interests of the Assignor under the Credit Agreement identified below (the "Assigned Interests"), including the Loans relating thereto, together with unpaid interest and fees relating thereto accruing from the Effective Date. The Assignor represents and warrants that it owns the interests assigned hereby free and clear of liens, encumbrances or other claims. Each of the Assignees represents that it is an Eligible Assignee within the meaning of the term in the Credit Agreement. The Assignor and each of the Assignees hereby makes and agrees to be bound by all the representations, warranties and agreements set forth in
Section 11.3 of the Credit Agreement, a copy of which has been received by each such party. From and after the Effective Date (i) each Assignee, if it is not already a Lender under the Credit Agreement, shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the interests assigned by this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) each Assignor shall, to the extent of the interests assigned by this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement (other than the rights of indemnification referenced in Section 11.9 of the Credit Agreement).

2. This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of Virginia.

3. Terms of Assignment

(a) Date of Assignment: ___________________, 200__
(b) Legal Name of Assignor: SEE SIGNATURE PAGE
(c) Legal Name of Assignee: SEE SIGNATURE PAGE
(d) Effective Date of Assignment: ___________________, 200__

See Schedule I attached for a description of the Loans (and the percentage interests therein and relating thereto) which are the subject of this Assignment and Acceptance.

4. The fee payable to the Administrative Agent in connection with this Assignment is enclosed.


IN WITNESS WHEREOF, the parties hereto have caused the execution of this instrument by their duly authorized officers as of the date first above written.

ASSIGNOR:                          ASSIGNEE:
--------                           --------


By: ___________________________    By: _____________________________
Name: _________________________    Name: ___________________________
Title: ________________________    Title: __________________________

ACKNOWLEDGMENT AND CONSENT
--------------------------

FIRST UNION NATIONAL BANK          UNITED DOMINION REALTY TRUST, INC.
as Administrative Agent


By: ___________________________    By: _____________________________
Name: _________________________    Name: ___________________________
Title: ________________________    Title: __________________________


SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
United Dominion Realty Trust, Inc.

LOANS PRIOR TO ASSIGNMENT

                           Loan                  Commitment
                          Amount                 Percentage
                          ------                 ----------
ASSIGNOR
--------

ASSIGNEES


$

LOANS SUBJECT OF THIS ASSIGNMENT

                              Loan                Commitment
                             Amount               Percentage
                             ------               ----------
ASSIGNOR
--------


$

SCHEDULE I
TO ASSIGNMENT AND ACCEPTANCE
United Dominion Realty Trust, Inc.

LOANS AFTER ASSIGNMENT

 Loan                Commitment
Amount               Percentage
------               ----------

ASSIGNOR

ASSIGNEES

$


EXHIBIT 10(i)
AMENDMENT TO
EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment"), dated as of December 5, 2000, between UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (the "Company") and JOHN P. McCANN (the "Executive") recites and provides as follows:

R E C I T A L S

On December 8, 1998, the Company and the Executive entered into an employment agreement (the "Employment Agreement"). The Company and the Executive now wish to amend the Employment Agreement as set forth herein.

A M E N D M E N T

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Defined Terms. Capitalized terms in this Amendment shall have the same meaning as set forth in the Agreement, unless otherwise modified hereby. All references in the Agreement to the Agreement shall be references to such document as modified hereby.

2. Severance Compensation. Section 4(c)(i) of the Agreement is hereby amended by adding the following sentence at the end thereof:

Notwithstanding the above, in the event that this Agreement is terminated in accordance with Section 4(b) hereof, then the Executive shall be paid one-hundred and four (104) weeks of base salary and shall receive the other benefits described in this Section 4(c)(i) for a period of one-hundred and four (104) weeks.

3. Incentive Compensation. Section 4(c)(ii) of the Agreement is hereby amended by adding the following sentence at the end thereof:

Notwithstanding the above, in the event that this Agreement is terminated in accordance with Section 4(b) hereof, then the "Average Annual Incentive Compensation" shall mean the Average Annual Incentive Compensation multiplied by two.

4. Agreement. Except as herein amended, the Employment Agreement remains in full force and effect.

[Signatures appear on the following page.]


WE AGREE TO THIS:

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By: _______________________________

Its: ________________________________

EXECUTIVE


JOHN P. McCANN


EXHIBIT 10(ii)
AMENDMENT TO
EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment"), dated as of December 5, 2000, between UNITED DOMINION REALTY TRUST, INC., a Virginia corporation (the "Company") and JOHN S. SCHNEIDER (the "Executive") recites and provides as follows:

R E C I T A L S

On December 8, 1998, the Company and the Executive entered into an employment agreement (the "Employment Agreement"). The Company and the Executive now wish to amend the Employment Agreement as set forth herein.

A M E N D M E N T

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Defined Terms. Capitalized terms in this Amendment shall have the same meaning as set forth in the Agreement, unless otherwise modified hereby. All references in the Agreement to the Agreement shall be references to such document as modified hereby.

2. Severance Compensation. Section 4(c)(i) of the Agreement is hereby amended by adding the following sentence at the end thereof:

Notwithstanding the above, in the event that this Agreement is terminated in accordance with Section 4(b) hereof, then the Executive shall be paid one-hundred and four (104) weeks of base salary and shall receive the other benefits described in this Section 4(c)(i) for a period of one-hundred and four (104) weeks.

3. Incentive Compensation. Section 4(c)(ii) of the Agreement is hereby amended by adding the following sentence at the end thereof:

Notwithstanding the above, in the event that this Agreement is terminated in accordance with Section 4(b) hereof, then the "Average Annual Incentive Compensation" shall mean the Average Annual Incentive Compensation multiplied by two.

4. Agreement. Except as herein amended, the Employment Agreement remains in full force and effect.

[Signatures appear on the following page.]


WE AGREE TO THIS:

UNITED DOMINION REALTY TRUST, INC.,
a Virginia corporation

By: _______________________________

Its: ________________________________

EXECUTIVE


JOHN S. SCHNEIDER


EXHIBIT 12

Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends


(Dollars in thousands)

Years ended December 31,                                       1996             1997           1998            1999         2000
                                                           -----------      ------------     -----------    ----------   ----------
Net income before extraordinary item                          $38,014          $  70,199      $  72,470    $   92,695    $  75,784

Add:
  Portion of rents representative
    of the interest factor                                        257                412            569           928          866
  Minority interests                                               58                278          1,541         5,679        4,386
  Interest on indebtedness                                     50,843             79,004        106,238       153,748      156,040
                                                            ---------         ----------    -----------    ----------   ----------
    Earnings                                                  $89,172          $ 149,893      $ 180,818    $  253,050    $ 237,076
                                                            =========         ==========    ===========    ==========   ==========
Fixed charges and preferred stock dividend:
  Interest on indebtedness                                    $50,843          $  79,004      $ 106,238    $  153,748    $ 156,040
  Capitalized interest                                            541              2,634          3,360         5,153        3,650
  Equity pick up from joint venture                                 -                  -              -             -        3,098
  Portion of rents representative
    of the interest factor                                        257                412            569           928          866
                                                            ---------         ----------    -----------    ----------   ----------
     Fixed charges                                             51,641             82,050        110,167       159,829      163,654
                                                            ---------         ----------    -----------    ----------   ----------

Add:
  Preferred stock dividend                                      9,713             17,345         23,593        37,714       36,891
                                                            ---------         ----------    -----------    ----------   ----------


     Combined fixed charges and preferred stock dividend      $61,354          $  99,395      $ 133,760    $  197,543    $ 200,545
                                                            =========         ==========    ===========    ==========   ==========

Ratio of earnings to fixed charges                               1.73 x             1.83 x         1.64 x        1.58 x       1.45 x

Ratio of earnings to combined fixed charges
     and preferred stock dividend                                1.45               1.51           1.35          1.28         1.18




Exhibit 23

Consent of Independent Auditors

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 report dated January 31, 2001, with respect to the consolidated financial statements and schedule of United Dominion Realty Trust, Inc. included in this Annual Report (Form 10-K) for the year ended December 31, 2000:

Registration Statement Number                                         Description
-----------------------------                                         -----------

         33-40433                             Form S-3, pertaining to the private placement of 900,000
                                                    shares of the Company's common stock in May, 1991.
         33-47296                             Form S-8, pertaining to the Company's Stock Purchase and
                                                    Loan Plan.
         33-48000                             Form S-8, pertaining to the Company's Stock Option Plan.
         33-58201                             Form S-8, pertaining to the Employee's Stock Purchase Plan.
         333-11207                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    private placement of 1,679,840 shares of the Company's
                                                    Common Stock.
         333-15133                            Form S-3, pertaining to the Company's Dividend
                                                    Reinvestment and Stock Purchase Plan.
         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 Stock Option Plan.
         333-44463                            Form S-3, pertaining to the Company's Dividend
                                                    Reinvestment and Stock Purchase Plan.
         333-48557                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    private placement of 104,920 shares of Common Stock and
                                                    104,920 rights to purchase Series C Junior Participating
                                                    Redeemable Preferred Stock.
         333-53401                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    private placement of 1,528,089 shares of Common Stock and
                                                    1,528,089 rights to purchase Series C Junior Participating
                                                    Redeemable Preferred Stock.
         333-64281                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    private placement of 849,498 shares of Common Stock and
                                                    849,498 rights to Purchase Series C Junior Participating
                                                    Redeemable Preferred Stock.
         333-72885                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    private placement of 130,416 shares of Common Stock and
                                                    130,416 rights to purchase Series C Junior Participating
                                                    Redeemable Preferred Stock.
         333-75897                            Form S-8, pertaining to the Company's Long Term Incentive
                                                    Plan.
         333-77107                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    private placement of 1,023,732 shares of Common Stock and
                                                    1,023,732 rights to purchase Series C Junior Participating
                                                    Redeemable Preferred Stock.


Registration Statement Number                                         Description
-----------------------------                                         -----------
         333-77161                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    private placement of 481,251 shares of Common Stock and
                                                    481,251 rights to purchase Series C Junior Participating
                                                    Redeemable Preferred Stock.
         333-80279                            Form S-8, pertaining to the Company's Open Market Purchase
                                                    Program.
         333-82929                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    private placement of 95,119 shares of Common Stock and
                                                    95,119 rights to purchase Series C Junior Participating
                                                    Redeemable Preferred Stock.
         333-92667                            Form S-3, Shelf Registration Statement, pertaining to the
                                                    registration of $616,058,554 of Common Stock, Preferred
                                                    Stock and Debt Securities.

Ernst & Young LLP

Richmond, Virginia

March 9, 2001

BROKERAGE PARTNERS