first amendment to term loan





 


 


 


 


 


 


FIRST AMENDMENT TO


TERM
LOAN AGREEMENT


This
First Amendment to Term Loan Agreement (the “Amendment”), dated as of January
12, 2012 (the “Effective Date”), is by and among Associated Estates
Realty Corporation (the “Borrower”), PNC Bank, National Association and
the other banks and financial institutions whose signatures appear below
(collectively, the “Lenders”) and PNC Bank, National Association, not
individually but as administrative agent for the Lenders (the “Administrative
Agent”).


RECITALS


A.            Borrower, Administrative Agent,
and certain of the Lenders are parties to that certain Term Loan Agreement
dated as of June 3, 2011 (the “Term Loan Agreement”), pursuant to which
such Lenders made available to Borrower a term loan with an Aggregate
Commitment of $125,000,000.  All capitalized terms used in this Amendment and
not otherwise defined herein shall have the meanings given to such terms in the
Term Loan Agreement.


B.            Borrower and the Lenders wish to
amend the Term Loan Agreement to modify certain of the terms, covenants, and
provisions in the Term Loan Agreement, all as set forth herein, and in
connection therewith, the undersigned Subsidiary Guarantors, being all of the
Subsidiary Guarantors under the Term Loan Agreement, have been asked to execute
this Amendment to provide their consent to and approve of the foregoing
Amendment.


NOW,
THEREFORE, in consideration of the foregoing recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


AGREEMENTS



1.            
Incorporation. The foregoing Recitals to this Amendment are hereby
incorporated and made part of this Amendment.



2.            
Effectiveness. This Amendment shall be effective from and after the
Effective Date shown above, which is the date on which each of the Borrower,
the Administrative Agent and the Required Lenders have executed and delivered
to the Administrative Agent a counterpart of this Amendment.


3.             Changes to Defined Terms.  From and after the Effective Date, Article I of the
Term Loan Agreement shall be amended as follows:


    a.             
The following defined terms shall
be added:


                “Credit Rating”
means the rating assigned by a rating agency to the senior unsecured long term
Indebtedness of a Person.


                “Fitch” means
Fitch, Inc., and its successors.


                “Investment Grade
Rating” means a Credit Rating of BBB-/BBB-/Baa3 or higher from any of S &
P, Fitch, or Moody’s, respectively.


 










 






 


 


 


 


            “Negative Pledge”
means, with respect to a given asset, any provision of a document, instrument
or agreement (other than any Loan Document) which prohibits or purports to
prohibit the creation or assumption of any Lien on such asset as security for
Indebtedness of the Person owning such asset or any other Person.


            “Risk‐Based
Capital Guidelines” means (i) the risk‐based capital guidelines in
effect in the United States on the Effective Date of the First Amendment
hereto, including transition rules, and (ii) the corresponding capital
regulations promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, including transition rules, and any amendments to such guidelines,
rules and regulations adopted prior to such Effective Date.


b.         The
definition of “Capitalization Rate” is deleted in its entirety and shall be
replaced by the following: 


                        “Capitalization Rate” means six and three
quarters percent (6.75%).


c.         The definition
of “Change in Law” is deleted in its entirety and shall be replaced by the
following:


            “Change in Law” means (i) any change after the
Effective Date of the First Amendment hereto in the Risk‐Based Capital
Guidelines or (ii) any adoption of or change in any other law,
governmental or quasi‐governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after
such Effective Date which affects the amount of capital required or expected to
be maintained by any Lender or any lending office of such Lender or any
corporation controlling any Lender.  Notwithstanding anything herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines and directives promulgated thereunder and (ii) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United
States or foreign regulatory authorities, in each case pursuant to Basel III, shall be deemed to be a “Change in Law”, regardless of
the date adopted, issued, promulgated or implemented.


d.         The definition of “Eligible Unencumbered Project” is modified by (i) adding at the end of clause (c) thereof
the words,  “if and for so long as required by Section 3.4”, (ii)
replacing all references in clause (f) thereof to “Subsidiary Guarantor” with
“Subsidiary” and (iii) deleting at the end of such
definition the words, “and (h) as of the date such Project first becomes
an Eligible Unencumbered Project, at least 75% of the residential units within
such Project are subject to third party occupancy leases.” 


e.         The definition of “Unencumbered Real Property Adjusted
NOI” is modified by replacing all
references therein to “Subsidiary Guarantor” with “Subsidiary, which Subsidiary
is also a Subsidiary Guarantor if and for so long as required by Section 3.4.” 


f.          The definition of “Unencumbered Real Property Value”
is modified by replacing all references
therein to “Subsidiary Guarantor” with “Subsidiary, which Subsidiary is also a
Subsidiary Guarantor if and for so long as required by Section 3.4.” 



4.         
Other Changes to Term Loan
Agreement.  From and after the
Effective Date, the following sections in the Term Loan Agreement shall be
modified as follows:


 


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a.             
In the first sentence of Section
2.15, a parenthesis is hereby added after the words “Article IX”.


b.             A new Section 3.4 shall be
added as follows:


3.4       Termination of Subsidiary Guaranty.


            (a)        The
Subsidiary Guaranty shall continue in full force and effect from the Agreement
Execution Date through and until such date as (i) Borrower has delivered to the
Agent evidence that Borrower has received an Investment Grade Rating from
either S&P or Moody’s and (ii) Borrower has notified Agent that it will within
fourteen (14) days or less, (A) file a preliminary prospectus with the
Securities and Exchange Commission for a public bond offering or (B) enter into
a placement agreement for a private debt issuance.  Within five (5) Business
Days after the date on which each of the foregoing requirements is met,
provided that no Event of Default or Potential Default has occurred and is then
continuing, the Agent execute and deliver on behalf of the Lenders such
documents as may be required to terminate the Subsidiary Guaranty in its
entirety and to release the Subsidiary Guarantors from any further liability
thereunder. 


            (b)        Subject
to the provisions of subsection (c) below, in the event that, at any time
following the release of the Subsidiary Guaranty in accordance with subsection
(a) above, Borrower shall no longer be maintaining an Investment Grade Rating
from either S&P or Moody’s, the requirement for a Subsidiary Guaranty shall
be reinstated and, not later than five (5) Business Days after the loss of such
Investment Grade Rating, Borrower shall cause each Subsidiary which then owns a
Qualifying Unencumbered Project to execute and deliver to the Administrative
Agent a new Subsidiary Guaranty in the form of Exhibit D. Borrower shall
thereafter cause each additional Subsidiary which owns a Qualifying
Unencumbered Project to execute and deliver to the Administrative Agent  a
joinder thereto in the form of Exhibit A attached to such form of
Subsidiary Guaranty.  In addition, notwithstanding the fact that Borrower is
maintaining such Investment Grade Rating, if at any time after the Subsidiary
Guaranty has been terminated, any owner of a Qualifying Unencumbered Project
shall incur any Recourse Indebtedness, including without limitation any
Guarantee Obligations with respect to any Indebtedness of Borrower, any other
member of the Consolidated Group or any Investment Affiliate, the requirement
for a Subsidiary Guaranty shall be reinstated as to such owner and, not later
than five (5) Business Days after the incurrence of such Indebtedness, Borrower
shall cause each such Subsidiary to execute and deliver to the Administrative
Agent a new Subsidiary Guaranty in the form of Exhibit D, or if such a
Subsidiary Guaranty has previously executed by other Subsidiaries, to execute
and deliver to the Administrative Agent a joinder thereto in the form of Exhibit
A attached to such form of Subsidiary Guaranty.


 


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            (c)        Borrower’s
obligation to cause the Subsidiaries which are the owners of Qualifying
Unencumbered Projects to execute or join in a reinstated Subsidiary Guaranty on
account of the loss of such Investment Grade Rating, as set forth in subsection
(b) above, shall not apply to any such Subsidiary if the taking of such action
by such Subsidiary would be prohibited by Borrower’s supplemental indenture
governing its public debt or the placement agreement governing its private debt
issue.  In such case Borrower instead agrees that, in addition to the general
restrictions on Indebtedness of the Consolidated Group imposed by Section 7.23
below, Borrower shall not cause, or permit or suffer, any Subsidiary owning a
Qualifying Unencumbered Project from time to time which is not a party to the
Subsidiary Guaranty to incur any other Indebtedness(other than obligations of such Subsidiary for the deferred purchase
price of property or services not to exceed an aggregate outstanding amount of
$1,000,000 at any time), including without limitation any Guarantee
Obligations with respect to any Indebtedness of Borrower, any other member of
the Consolidated Group or any Investment Affiliate.


(d)       In the
event Borrower once again delivers to the Agent evidence that Borrower has
received an Investment Grade Rating from either S&P or Moody’s following
the occurrence of the events described in Section 3.4(b) above then, in
such event, (i) the provisions of Section 3.4(a) shall operate anew to
require the release of the Subsidiary Guaranty then in effect and the
provisions of the first two sentences of Section 3.4(b) and the
provisions of Section 3.4(c) shall both cease to apply to Borrower
unless and until Borrower shall no longer be maintaining such Investment Grade
Rating.



c.          
Section 6.21 is deleted in its entirety and shall be replaced as
follows:



                        “Except for such times as Borrower shall have satisfied
the conditions of Section 3.4(a) and shall maintain an Investment Rating
from either S&P or Moody’s and except with respect to any Subsidiary which
shall qualify for exemption under the conditions of Section 3.4(c),
Borrower shall cause each Subsidiary Guarantor listed on Schedule 3.1,
as amended from time to time, to execute and deliver to the Administrative
Agent the Subsidiary Guaranty.  Except for such times as Borrower shall have
satisfied the conditions of Section 3.4(a) and shall maintain an
Investment Rating from either S&P or Moody’s and except with respect to any
Subsidiary which shall qualify for exemption under the conditions of Section
3.4(c), Borrower shall cause each Subsidiary which hereafter owns a
Qualifying Unencumbered Project to execute and deliver to the Administrative
Agent a joinder in the Subsidiary Guaranty in the form of Exhibit A
attached to the form of Subsidiary Guaranty.  Borrower covenants and agrees
that each Subsidiary which it shall cause to execute the Subsidiary Guaranty shall
be fully authorized to do so by its supporting organizational and authority
documents and shall be in good standing in its state of organization and shall
have obtained any necessary foreign qualifications required to conduct its
business.  Notwithstanding the foregoing, certain Subsidiary Guarantors may be
released therefrom pursuant to the terms and provisions of Section 3.3.”



d.          
Section 7.18 is deleted in its entirety and shall be replaced as
follows:


            Secured Indebtedness.  At all times until the last day of the fiscal quarter in which
Borrower first receives an Investment Grade Rating from either S & P or
Moody’s, Borrower will not allow, or permit any member of the Consolidated
Group to allow, the aggregate outstanding principal amount of Secured Indebtedness
of the Consolidated Group which is also Recourse Indebtedness to exceed ten
percent (10%) of the then‐current Total Asset Value at any time. From and
after the first day of the fiscal quarter following the fiscal quarter in which
Borrower first receives an Investment Grade Rating from either S & P or
Moody’s, Borrower will not allow, or permit any member of the Consolidated
Group to allow, the aggregate outstanding principal amount of all of the
Consolidated Group’s Secured Indebtedness (whether Recourse Indebtedness or Non‐Recourse
Indebtedness) to exceed forty-five percent (45%) of the then-current Total
Asset Value. The amount of the Consolidated Group’s Secured Indebtedness which
is Non-Recourse Indebtedness shall be limited only by Section 7.20(a)
and Section 7.20(b) and the preceding sentence of this Section 7.18.



e.           
In Section 7.19, the
reference to “$500,000,000” shall be deleted and replaced with a reference to
“$600,000,000”.


 


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f.           
In Section 7.20(b), the
reference to “June 30, 2011” shall be deleted and replaced with a reference to
“September 30, 2011”.   


g.           In Section 7.20(e),
references to “85%” shall be deleted and replaced with references to “80%”.   


h.           In Section 7.23, the first
sentence thereof shall be deleted and replaced with, “Neither Borrower nor any
other member of the Consolidated Group shall incur any Indebtedness of a
revolving nature other than this Facility and corporate credit card accounts
used by Borrower’s employees in the ordinary course of business.”


i.            In Section 9.2, (i) clause
(a) of the first sentence thereof shall be deleted and replaced with the
following: “(a) Extend the Facility Termination Date, or forgive all or any
portion of the principal amount of any Loan or accrued interest thereon or any
fee payable to Administrative Agent for the benefit of the Lenders generally,
reduce the Applicable Margins (or modify any definition herein which would have
the effect of reducing the Applicable Margins) or the interest rate or
underlying interest rate options, reduce any fee payable to Administrative
Agent for the benefit of the Lenders generally, or extend the time of payment
of any such principal, interest or fees.”; (ii) the following two clauses are
added as clauses (c) and (d) and the remaining clauses are relettered
accordingly: “(c) Release any Subsidiary Guarantor from the Subsidiary
Guaranty, except as expressly provided for herein. (d) If any collateral shall
hereafter be provided for the Obligations, release all or any portion of such
collateral, except as expressly provided for herein.”; and  (iii) the reference
to “ 9.2(f)” in the second sentence of Section 9.2 is hereby changed to
“Section 9.2(h)”.



j.           
In Section 11.11, the first
sentence thereof shall be deleted and replaced by the foregoing:


            At such time as a Lender becomes a Defaulting Lender,
such Defaulting Lender’s right to vote on matters which are subject to the
consent or approval of the Required Lenders, each affected Lender or all
Lenders shall be immediately suspended until such time as the Lender is no
longer a Defaulting Lender, except that the Commitment of the Defaulting Lender
may not be increased and the Facility Termination Date may not be extended
(other than extensions at Borrower’s option under Section 2.23 or
extensions following Borrower’s failure to repay the outstanding Advances and
all other unpaid Obligations in full on the Facility Termination Date resulting
from execution of a forbearance agreement or other agreement binding the
Lenders to refrain from exercising remedies), without such Defaulting Lender’s
consent.


k.         
The caption (i.e. “RE:”) paragraph
of the form of Compliance Certificate attached to the Term Loan Agreement as Exhibit
B shall be deleted in its entirety and shall be
replaced by the following:


 


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  Re:

  	
  (1)            Term Loan Agreement dated as of
  June 3, 2011, as amended by that certain First Amendment to Term Loan
  Agreement dated as of January 12, 2012 (as may be further amended, modified,
  supplemented, restated, or renewed, from time to time, the “Term Agreement”)
  between ASSOCIATED ESTATES REALTY CORPORATION (the
  “Borrower”), and PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent for
  itself and the other lenders parties thereto from time to time (“Term
  Lenders”).

   

  (2)             Second Amended and Restated
  Credit Agreement dated as of January 12, 2012  (as amended, modified,
  supplemented, restated, or renewed, from time to time, together with the Term
  Agreement, the “Agreement”) between ASSOCIATED
  ESTATES REALTY CORPORATION (the “Borrower”), and PNC BANK, NATIONAL
  ASSOCIATION, as Administrative Agent for itself and the other lenders parties
  thereto from time to time (together with the Term Lenders, the “Lenders”).”

   

  



5.         
Reaffirmation of and Amendment
to Subsidiary Guaranty.  The
undersigned Subsidiary Guarantors, jointly and severally, hereby (i) approve
and ratify this Amendment, together with all of their joint and several
obligations, in connection herewith, (ii) agree that the following additional
clause is hereby added at the end of the first sentence of Section 3 of the
Subsidiary Guaranty: “and (vi) the unenforceability of all or any part of the
Facility Indebtedness or Obligations against Borrower, whether because the
Facility Indebtedness or Obligations exceed the amount permitted by law or
violate any usury law, or because the act of creating the Facility Indebtedness
or Obligations, or any part thereof, is ultra vires, or because the officers or
Persons creating same acted in excess of their authority, or because of a lack
of validity or enforceability of or defect or deficiency in any of the Loan
Documents, or because Borrower has any valid defense, claim or offset with
respect thereto, or because Borrower’s obligation ceases to exist by operation
of law, or because of any other reason or circumstance, it being agreed that
Guarantor shall remain liable hereon regardless of whether Borrower or any
other Person be found not liable on the Facility Indebtedness or Obligations,
or any part thereof, for any reason (and regardless of any joinder of Borrower
or any other party in any action to obtain payment or performance of any or all
of the Facility Indebtedness or Obligations).agree and confirm that the Term
Loan Agreement, as modified by this Amendment, remains in full force and effect
in accordance with its terms,” and (iii) acknowledge that their obligations under
the Subsidiary Guaranty continue in full force and effect  and agree to fully and timely perform each and every obligation of a
Subsidiary Guarantor under such Subsidiary Guaranty,
as modified by the foregoing.


6.         
Representations and Warranties.  Borrower hereby represents and warrants to Lenders
and the Administrative Agent that as of the Effective Date:


a.            no Event of Default or Potential
Default exists under the Term Loan Agreement or the other Loan Documents or
will exist after giving effect to the terms of this Amendment;


b.            the representations and warranties
contained in Article VI of the Term Loan Agreement are true and correct;


c.          
the Term Loan Agreement and the
other Loan Documents are in full force and effect and it has no defenses or
offsets to, or claims or counterclaims relating to, the obligations under the Term
Loan Agreement or any of the other Loan Documents;


d.           other than changes which have been
previously provided to and approved by the Administrative Agent, no changes
have been made to its organizational documents since the Agreement Execution
Date; and


e.            it has full power and authority to
execute this Amendment.


7.        
Reimbursement to Administrative
Agent.  The Borrower agrees to
reimburse the Administrative Agent for all reasonable out-of-pocket expenses
(including, but not limited to fees relating to legal, consulting, or auditing
expenses) incurred in connection with the preparation, negotiation, and
consummation of this Amendment.


 


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8.         
References to Term Loan
Agreement; Inconsistency.  All
references in the Loan Documents to the Term Loan Agreement henceforth shall be
deemed to refer to the Term Loan Agreement as amended by this Amendment.  In
the event of a conflict or inconsistency between the provisions of the Loan
Documents and the provisions of this Amendment, the provisions of this
Amendment shall govern.


9.         
Continuing Force and Effect of Term
Loan Agreement and Loan Documents. 
The provisions of the Term Loan Agreement and other Loan Documents are in full
force and effect, except as amended herein, and the Loan Documents as so
amended are hereby ratified and reaffirmed by Borrower.  Nothing contained in
this Amendment shall be construed to disturb, discharge, cancel, impair or
extinguish the indebtedness evidenced by the existing Notes and the other Loan
Documents.


10.        Counterparts.  This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Amendment by signing any such
counterpart.  This Amendment shall be construed in accordance with the internal
laws (and not the law of conflicts) of the State of Ohio, but giving effect to
federal laws applicable to national banks.


[Signature pages follow]


 


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IN
WITNESS WHEREOF, Borrower, the Lenders and the Administrative Agent have
executed this Agreement as of the date first above written.


ASSOCIATED ESTATES REALTY CORPORATION, an Ohio corporation


 


 


By:       /s/ Bradley A. Van Auken                                


Name:  Bradley A. Van Auken                                                


Title:    Vice
President                                                  


1 AEC Parkway


Richmond Heights, Ohio  44143


                                                Attention: 
       Vice President and General Counsel


                                                Telephone: 
     (216) 797-8780


                                                                       
Facsimile:        (216) 797-8719


 










 






 


 


 


 


The
undersigned, being all of the Subsidiary Guarantors under the Term Loan
Agreement, hereby consent to and approve of the foregoing Amendment and agree
that their obligations under the Subsidiary Guaranty shall continue in full
force and effect with respect to the Loan, as increased and modified by the
foregoing Amendment:


 


	
  SANDLER at ALTA LAGO, LLC,

  a Virginia limited liability company

  By:      Associated
  Estates Realty Corporation, 

            its sole member

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

  

  

  	
  AERC BEDFORD COMMONS, INC.,

  a Delaware corporation

  By:       /s/ Bradley
  A. Van Auken 

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
  BUCKHEAD AERC, LLC,

  a Delaware limited liability company

  By:      Associated
  Estates Realty Corporation, 

            its sole member

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

  

  

  	
  AERC LAKE FOREST, INC.,

  a Delaware corporation

  By:      /s/ Bradley A.
  Van Auken

  Name: Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
  AERC WESTWIND, LLC,

  a Delaware limited liability company

  By:      Associated
  Estates Realty Corporation, 

            its sole member

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

  

  

  	
  AERC MORGAN PLACE, INC.,

  a Delaware corporation

  By:      /s/ Bradley A.
  Van Auken

  Name: Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
  AERC SAN RAPHAEL, LLC,

  a Delaware limited liability company

  By:      Associated Estates
  Realty Corporation, 

            its sole member

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

   

   

  	
  AERC ARROWHEAD STATION, INC.,

  a Delaware corporation

  By:       /s/ Bradley
  A. Van Auken

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

  

  

  



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  ASPEN LAKES - AERC, INC.,

  a Michigan corporation

  By:      /s/ Bradley A. Van Auken

  Name:  Bradley A. Van Auken

  Title:    Vice President

  

  

  	
  AERC BENNELL, INC.,

  a Delaware corporation

  By:       /s/ Bradley
  A. Van Auken

  Name:  Bradley A. Van Auken

  Title:    Vice President

  

  

  
	
  AERC SUMMER RIDGE, LLC

  A Delaware limited liability company 

   

  By:  AERC Summer, Inc., its
  Manager

   

               By:       /s/
  Bradley A. Van Auken

               Name:  Bradley
  A. Van  Auken

               Title:    Vice
  President

   

  	
  AERC KENSINGTON GROVE, INC.,

  a Delaware corporation

  By:       /s/ Bradley
  A. Van Auken

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
  AERC
  WILLIAMSBURG, INC.,

  a Delaware corporation

  By:      /s/ Bradley A. Van Auken

  Name:  Bradley A. Van Auken

  Title:    Vice President

  

  

  	
  AERC WESTERN RESERVE, INC.,

  a Delaware corporation

  By:       /s/ Bradley
  A. Van Auken

  Name:  Bradley A. Van Auken

  Title:    Vice President

  

  

  
	
  AERC
  WESTCHESTER, INC.,

  a Delaware corporation

  By:      /s/ Bradley A. Van Auken

  Name:  Bradley A. Van Auken

  Title:    Vice President

  

  

  	
  AERC
  SPRING BROOK, LLC,

  a Delaware limited liability company

  By:       AERC Brook,
  Inc., its Manager

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

   

  
	
  AERC
  STERLING PARK, INC.,

  a Delaware corporation

  By:      /s/ Bradley A. Van Auken

  Name:  Bradley A. Van Auken

  Title:    Vice President

  

  

  	
  AERC
  LANDINGS A PRESERVE, LLC,

  a Delaware limited liability company

  By:       AERC
  Landings, Inc., Manager

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

  

  

  
	
  AERC OAKS
  HAMPTON, LLC,

  a Delaware limited liability company

  By:      AERC Oaks,
  Inc., its Manager

              By:/s/
  Bradley A. Van Auken

              Name:    Bradley A. Van Auken

              Title:    Vice
  President

  	
  AERC COUNTRY
  PLACE, LLC,

  a Delaware limited liability company

  By:       AERC
  Country I, Inc., its Manager

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

  



3


 










 











	
  AERC CHRISTOPHER WREN, INC.,

  a Delaware corporation

   

   

  By:      /s/ Bradley A.
  Van Auken        

  Name:  Bradley A. Van Auken

  Title:    Vice President

  	
  AERC GEORGETOWN
  PARK, LLC,

  a Delaware limited liability company

  By:       AERC
  Georgetown, Inc., its Manager

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

  

  

  
	
   

  AERC
  DPF PHASE II, LLC,

  a
  Delaware limited liability company

   

  By:      AERC
  DPF Georgia Ventures, LLC

            a Delaware limited liability company

   

              By:       AERC
  of Georgia, Inc., 

                          its
  Sole Member

   

              By: 
       /s/ Bradley A. Van Auken

              Name: 
  Bradley A. Van Auken

              Title:   
  Vice President

   

  	
   

  AERC DPF PHASE I, LLC,

  a Delaware limited liability company

   

  By:      AERC
  DPF Georgia Ventures, LLC,

            a Delaware limited liability company

              

              By:       AERC
  of Georgia, Inc., 

                        its Sole Member

   

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van  Auken            Title:    Vice
  President

  
	
  AERC HEATHERMOOR, INC.

  a Delaware corporation

   

   

  By:      /s/ Bradley A.
  Van Auken

  Name:  Bradley A. Van Auken

  Title:    Vice President

  	
  AERC
  CENTRAL PARK PLACE, LLC

  A Delaware limited liability company 

  

  

  By: 
  AERC Central Park, Inc. its Manager

  

  

              By:       /s/
  Bradley A. Van Auken

              Name:  Bradley A. Van  Auken

              Title:    Vice
  President

  
	
   

  AERC PERIMETER LAKES, INC.,
  

  a Delaware corporation

   

   

  By:      /s/ Bradley A.
  Van Auken

  Name:  Bradley A. Van Auken

  Title:    Vice President

   

  	
  

  AERC CLINTON  PLACE, LLC,

  a Delaware limited liability company 

   

  By: 
  AERC Clinton, Inc., its Manager

   

  By:       /s/
  Bradley A. Van Auken

  Name:  Bradley
  A. Van  Auken

  Title:    Vice
  President

   

  
	
  AERC WELLINGTON, LLC,

  a Delaware limited liability company 

   

  By:       Associated
  Estates Realty Corporation, 

            its sole member

   

  By:       /s/ Bradley A.
  Van Auken

  Name:  Bradley
  A. Van  Auken

  Title:    Vice President

  	
  AERC VIENNA METRO, LLC,

  a Delaware limited liability company 

   

  By:       Associated
  Estates Realty Corporation, 

            its sole member

   

  By:       /s/ Bradley A.
  Van Auken

  Name:  Bradley
  A. Van  Auken

  Title:    Vice
  President

  



4


 










 






 


 


 


 


COMMITMENT:                                             PNC
BANK, NATIONAL ASSOCIATION,


$30,000,000                                                    Individually
and as Administrative Agent


By:       /s/ John E. Wilgus, II                            


Name:  John E. Wilgus, II                                


Title:    Senior
Vice President                           


PNC
Real Estate


1900
East Ninth Street - 22nd Floor


Mail
Stop:  B7-YB13-22-1


Cleveland,
OH  44114


Phone:             216-222-6032


Facsimile:        216-222-6070


Attention:         John
E. Wilgus, II


      Senior Vice President


      Real
Estate Banking


- 5 -


 










 






 


 


 


 


COMMITMENT:                                             WELLS
FARGO BANK, N.A., individually and as


$30,000,000                                                    Syndication
Agent


By:       /s/ Scott S. Solis                                               


Name:  Scott S. Solis                                                    


Title:    Senior
Vice President                                       


                                   
123 N. Wacker Drive, Suite 1900


                                   
Chicago, IL  60606


                                    


                                    Attention:        
Scott Solis


                                    Phone: 
           312-269-4818


                                    Facsimile: 
      312-782-0969


- 6 -


 










 






 


 


 


 


COMMITMENT:                                             U.S.
BANK NATIONAL ASSOCIATION,


$25,000,000                                                    individually
and as Documentation Agent


By:       /s/ Curt M. Steiner                                            


Name:  Curt M. Steiner


Title:    Senior
Vice President


                                    U.S. Bank National
Association


                                    209 South LaSalle
Street, Suite 210


                                    Chicago, IL 60604


                                    Attention:         Curt
M. Steiner, Senior Vice President


                                    Phone:
            (312) 325-8756


                                    Facsimile:
       (312) 325-8853


- 7 -


 










 






 


 


 


 


COMMITMENT:                                             RAYMOND
JAMES BANK, FSB


$13,750,000


By:       /s/ James Armstrong                                         


Name:  James Armstrong


Title:    Vice
President


                                    710 Carillon
Parkway


                                    St. Petersburg,
FL  33716


                                    Attention:         James
Armstrong


                                    Phone: 
           727-567-7919


                                    Facsimile: 
      866-205-1396


- 8 -


 










 






 


 


 


 


COMMITMENT:                                             CITIBANK,
N.A.


$12,500,000


By:       /s/ John C. Rowland                                         


Name:  John C. Rowland


Title:    Vice
President


Citibank,
N.A.


388
Greenwich Street, 23rd Floor


New
York, NY  10013


Attention: 
       Rita C. Lai


Phone:             212-723-5931


Facsimile:        212-723-8550


- 9 -


 










 






 


COMMITMENT:                                             RBS
CITIZENS BANK N.A. d/b/a CHARTER 



$13,750,000                                                   
ONE


By:       /s/ Samuel
A. Bluso                              


Name:  Samuel A. Bluso


Title:    Senior Vice
President


RBS Citizens Bank N.A. d/b/a Charter One


1215
Superior Avenue, OH S675


Cleveland,
OH  44114


Attention:
        Samuel A. Bluso


Phone:             216-277-0388



Facsimile:         216-277-4660


 


 - 10 -