**LOAN AGREEMENT**

**by and between**

**ASSOCIATED ESTATES REALTY CORPORATION,**

**an Ohio corporation**

**("Borrower")**

**and**

**NATIONAL CITY BANK,**

**a national banking association**

**("Bank")**

**Dated As of July 16, 2001**

**TABLE OF CONTENTS**

Section										Page

1.	Definitions	1

2.	Commitment and Note	6

3.	Interest	6

4.	Repayments and Prepayments of Principal	8

5.	Payments and Computations	9

6.	The Letters of Credit	10

7.	Conditions Precedent to Amendment and Restatement	14

8.	Conditions Precedent to Subsequent Advances and Letters of Credit	16

9.	Representations and Warranties	17

10.	Covenants	19

11.	Disbursement Procedures	21

12.	Default and Remedies	22

13.	Miscellaneous Provisions	23

Exhibits to this Agreement

A=	Form of Payment Authorization

B=	Form of Request for Advance

C=	Form of Request for Issuance of Letter of Credit

**AMENDED AND RESTATED LOAN AGREEMENT**

THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is made
as of the 16th day of July, 2001, by and between ASSOCIATED ESTATES REALTY
CORPORATION, an Ohio corporation (the "Borrower"), and NATIONAL CITY BANK, a national
banking association (the "Bank").

Recitals:

A.	The Borrower and the Bank are parties to that certain Loan Agreement dated
November 15, 1999 (as amended by amendments thereto dated, respectively, May 12, 2000
and October 31, 2000, the "Existing Loan Agreement").

B.	Pursuant to the Existing Credit Agreement, the Borrower's indebtedness to the
Bank for revolving credit loans advanced under the Existing Loan Agreement (collectively, the
"Existing Loans") is evidenced by a Promissory Note dated October 31, 2000 in the principal
amount of $12,000,000.

C.	The Borrower has requested the Bank (i) to extend the maturity of the Existing
Loans, (ii) to provide for a Letter of Credit (as defined herein), and (iii) to amend and restate
in their entirety the terms and conditions of the Existing Loan Agreement.

D.	Subject to the terms and conditions hereinafter set forth, the Bank has granted
such requests.

E.	None of the Existing Loans outstanding as of the Closing Date (defined below)
shall be deemed repaid or otherwise satisfied upon the execution and closing of the
transactions contemplated by this Agreement; but, instead, upon the effectiveness of this
Agreement, all Loans (defined below) hereunder are and shall be deemed to be the same
indebtedness as that of the Borrower under the Existing Loans immediately prior to such
effectiveness.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth,
the Borrower and the Bank hereby agree as follows:

1.	Definitions.  The terms set forth below shall have the following meanings for the
purposes of this Agreement:

"Advance" shall have the meaning set forth in Section 2, below.

"Assignment" means each Assignment of Leases, Rents, Contracts, Income and
Proceeds executed and delivered by Borrower in favor of the Bank, granting the Bank a present
and perfected assignment of all of Borrower's right, title and interest in and to all rents, leases,
contracts and similar rights in respect of each Mortgaged Property.

"Business Day" means any day other than a Saturday or Sunday on which
commercial banking institutions are open for business in Cleveland, Ohio.

"Closing Date" means the day as of which the amendment and restatement of
the Existing Loan Agreement pursuant to this Agreement is effective.

"Code" means the Internal Revenue Code of 1986, as amended and the
regulations and procedures promulgated thereunder.

"Credit Commitment" means the Bank's obligation and agreement to make Loans
and to issue Letters of Credit upon and subject to the terms and conditions set forth in this
Agreement.

"Default" means any event or occurrence which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.

"Default Interest Rate" means an annual rate of interest equal to the lesser of
(i) two and one-quarter percent (2-1/4%) above the Prime Rate; or (ii) the maximum rate of
interest which may lawfully be charged in respect of the Obligations.

"Draw Date" means, in relation to any Advance, the day on which such Advance
is made or to be made to Borrower pursuant to this Agreement.

"Environmental Indemnity Agreement" means each Environmental Indemnity
Agreement executed and delivered by Borrower in favor of the Bank and indemnifying the Bank
of and from any and all liability, loss, cost, damage or expense which may be incurred by or
asserted against the Bank by reason of a violation of applicable Environmental Laws (as therein
defined) at or with respect to any Mortgaged Property.

"Event of Default" means any event or condition described in Section 12 of this
Agreement.

"Face Amount" means the face amount of any Letters of Credit issued
hereunder, regardless of the amount actually drawn on such Letters of Credit.

"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in effect from time to time in the United States, applied
consistently with Borrower's past practices.

"Head Office" means the head office of National City Bank, located at 1900 East
Ninth Street, Cleveland, Ohio  44101-0756 or such other office as may be designated as such
by written notice to Borrower by the Bank.

"Indebtedness" means, with respect to Borrower, all obligations of Borrower
which would be classified as indebtedness on a balance sheet (including the footnotes thereto)
prepared in accordance with GAAP.

"Interest Period" means:  (a)  For each Libor Rate Loan, the period commencing
on the Draw Date and ending one or three months thereafter; provided that

(i)  any Interest Period which would otherwise end on a day which is not
a Business Day shall be extended to the next Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the Business Day immediately preceding such day;

(ii)  any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month; and

(iii)  every Interest Period shall end on or before the Termination Date;
and

(b)  For a Prime Rate Loan, the period commencing on the Draw Date for such
Loan ending on the earliest of (i) the date on which such Prime Rate Loan is repaid by
Borrower; (ii) the date on which such Prime Rate Loan is converted to a Libor Rate Loan as
hereafter provided; or (iii) the Termination Date.

"Issuance Date" means the issuance date of any Letter of Credit hereunder.

"Late Charge" means a fee equal to the greater of One Hundred and Dollars
($100) or five percent (5%) of the delinquent payment, charged to Borrower or added to the
unpaid balance of the Note whenever any payment of principal or interest is not paid when due.

"Letter of Credit" means any letter of credit issued by the Bank pursuant to this
Agreement.

"Letter of Credit Commission" means an annual commission, payable in advance
by Borrower to the Bank in quarterly installments, each of which shall (a) be determined by the
Bank, and billed to the Borrower, within ten (10) days prior to the end of each fiscal quarter
during the term of this Agreement, by (i) multiplying the aggregate of the Face Amounts of all
Letters of Credit issued hereunder and in effect or to be in effect as of the first day of the
ensuing calendar quarter, by two percent (2.0%); and (ii) by dividing the product of such
multiplication by four (4); (b) be due and payable on the first day of the calendar quarter to
which they pertain.

"Letter of Credit Issuance Fee" means a fee, payable by Borrower to the Bank,
on the Issuance Date of each Letter of Credit, equal to one-eighth of one percent (0.125%) of
the Face Amount of such Letter of Credit.

"Letter of Credit Usage" means, as of the date on which the same is determined,
the sum of (x) the aggregate of the Face Amounts of all Letters of Credit then outstanding, plus
(y) the aggregate amount of all drawings under Letters of Credit honored by the Bank and not
theretofore either reimbursed by Borrower or converted into Loans as provided in Section 6.

"Libor" means the rate (rounded upward to the next highest 1/100 of 1%)
obtained by dividing (x) the annual rate of interest determined by the Bank equal to the offered
rates for deposits in U.S. Dollars of one or three-month periods (as the case may be)
commencing on the first date of the applicable Interest Period for which such rate is
determined, as such rate appears on the Telerate system as of 11:00 a.m. (London, England
time) on the date which is two (2) Business Days preceding the first day of such Interest Period,
for a period comparable to the duration of such Interest Period and in an amount comparable
to the amount of the Libor Rate Loan to be outstanding during such Interest Period, by (y) a
percentage equal to 100% minus the stated maximum rate of all reserves required to be
maintained against "Libor Rate liabilities" as specified in Regulation D (or against any other
category of liabilities which includes deposits by reference to which the interest rate on Libor
Rate Loans or loans is determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of a bank to United States residents) on such date
to any member bank of the Federal Reserve System.

"Libor Break Funding Costs" means an amount sufficient to reimburse the Bank
for any and all loss, cost or expense actually incurred by it as the result of the occurrence of
any Libor Break Funding Event, including, without limitation, (i) any loss incurred in obtaining,
liquidating or reemploying deposits from third parties (excluding loss of margin for the period
after any such prepayment), and (ii) the excess, if any, of the amount of interest that otherwise
would have accrued on the principal amount so paid, prepaid or repaid or not borrowed for the
period, beginning with the date of such payment, prepayment or repayment until the last day
of the Interest Period that would otherwise have been in effect for such Libor Rate Loan, at the
applicable rate of interest for such Libor Rate Loan over the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum equal to the interest
component of the amount the Bank would have bid in the London interbank market for dollar
deposits of leading banks in amounts comparable to such principal amount and with maturities
comparable to such period, all as determined as of the date of the occurrence of the Libor
Break Funding Event.

"Libor Break Funding Event" means the prepayment (whether by acceleration
or otherwise) of any LIBOR Rate Loan other than upon the final day of the Interest Period
therefor.

"Libor Rate" means for each Interest Period, the sum of Libor plus two percent
(2%) per annum.

"Libor Rate Loan" means a Loan which bears interest at the Libor Rate.

"Loan" means each Advance or multiple Advances designated by Borrower as
such for purposes of the Rate Option and Interest Period elections available to Borrower
pursuant to this Agreement.

"Loan Documents" mean this Agreement, the Note, the Mortgages, the
Environmental Indemnity Agreements and any other agreement, instrument, certificate or
document now or hereafter executed in connection with or pursuant to this Agreement.

"Maximum Commitment" means the sum of Twelve Million Dollars ($12,000,000).

"Mortgage" means each Open End Mortgage, Security Agreement and
Assignment of Rents and Leases executed and delivered by Borrower in favor of the Bank and
securing the Obligations.

"Mortgaged Property" means each tract or parcel of improved real property
owned by Borrower and subject to the lien of a Mortgage.

"Note" means that certain Promissory Note, executed and delivered by Borrower
to the Bank, evidencing Borrower's indebtedness to the Bank in the principal amount not to
exceed Twelve Million Dollars ($12,000,000).

"Obligations" means, collectively, all of the indebtedness, obligations and
liabilities of Borrower to the Bank (i) in respect of the Loans made or Letters of Credit issued
pursuant to this Agreement, or (ii) under or in respect of any one or more of the Loan
Documents, including, without limitation, all interest, charges and other fees payable hereunder
(or under any of the Loan Documents) by Borrower, or due hereunder (or under any of the Loan
Documents) from Borrower to the Bank from time to time, together with all costs and expenses
payable by Borrower as provided herein or in any Loan Document.

"Outstanding Amount" means, at any time, the aggregate of (x) the principal
balance of all Loans then outstanding hereunder, plus (y) the Face Amount of all Letters of
Credit then outstanding hereunder, plus (z) the amount of all draws or disbursements made
under any Letter of Credit which Borrower has not converted into a Loan or otherwise
reimbursed to the Bank in accordance with Section 6, below.

"Payment Authorization" means the form substantially in the form of attached
*Exhibit A*, executed by Borrower and delivered to the Bank, notifying the Bank of any payment
by Borrower hereunder or under the Note, and if appropriate authorizing the Bank to debit one
or more accounts of Borrower for such payment.

"Person" means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture or other entity, or
a government or any political subdivision or agency thereof.

"Prime Rate" means the fluctuating rate of interest which is publicly announced
from time to time by the Bank at its Head Office as being its "prime rate" or "base rate"
thereafter in effect, with each change in the Prime Rate automatically, immediately and without
notice changing the fluctuating rate of interest thereafter applicable to any sum bearing interest
at the Prime Rate hereunder; the Prime Rate is not necessarily the lowest rate of interest which
may be available at any time from the Bank on fluctuating rate loans.

"Prime Rate Loan" means a Loan which bears interest at the Prime Rate.

"Property" means any type of real, personal, tangible, intangible or mixed
property.

"Rate Option" means Borrower's right, on the terms and subject to the conditions
set forth in this Agreement, to elect the Prime Rate or the Libor Rate as the applicable rate of
interest with respect to the Loans.

"Request For Advance" means the form, substantially in the form of attached
*Exhibit B,* to be executed by Borrower and delivered to the Bank, requesting an Advance
hereunder, and notifying the Bank of Borrower's intended use of such Loan proceeds.

"Request for Issuance of a Letter of Credit" means the form, substantially similar
to that which is attached hereto as *Exhibit C* to be executed by Borrower and delivered to the
Bank, requesting the issuance of a Letter of Credit and providing the information required in
connection therewith by Section 6, below.

"Termination Date" means the earlier of (i) December 31, 2002; or (ii) the date
on which the entire principal balance of the indebtedness evidenced by the Note shall become
due pursuant to the provisions hereof (whether by acceleration or otherwise).

"Title Policy" means each loan policy of title insurance (ALTA Form B, as
amended 10/17/70) issued to the Bank by a title insurance company acceptable to the Bank
(a "Title Company") and confirming (in amounts, on terms, and with such endorsements and
affirmative coverages as the Bank may require) that each Mortgage is the first and paramount
lien and security interest in respect of the Mortgaged Property described therein.

2.	Commitment and Note.   On the terms and subject to the conditions set forth
herein, the Borrower may from time to time until the Termination Date, obtain multiple
advances (each, an "Advance") and Letters of Credit from the Bank under this Agreement.
Each Advance shall be in a principal amount equal to or greater than One Million Dollars
($1,000,000); the aggregate principal amount of all Advances and Letter of Credit Usage shall
not, under any circumstances, exceed the Maximum Commitment.  Notwithstanding the
foregoing to the contrary, Borrower shall not be entitled to request or receive any Advance
hereunder if the making of such Advance would result in the existence of more than three (3)
Loans hereunder.  All Advances shall be evidenced by the Note, which shall be executed and
delivered to the Bank prior to any Advance.   Notwithstanding the stated principal amount of the
Note, the Borrower shall in no event be obligated to repay more than the aggregate unpaid
balance of Advances made to or for the benefit of the Borrower by the Bank, together with
interest at the rate specified in the Note (defined below) on each Advance from the date it is
made by the Bank.

3.	Interest.

(a)	Rate Options and Interest Periods.  Subject to the terms and conditions
set forth in this Agreement, Borrower may specify the Rate Option for each Loan and the
Interest Period for each LIBOR Rate Loan, provided that Borrower may not at any time
aggregate Advances into more than three (3) Loans for the purpose of determining the Rate
Option or the Interest Period applicable to Advances made by Borrower hereunder.  Borrower
shall give the Bank its irrevocable Request For Advance not later than 1:00 p.m. Cleveland time
at least one (1) Business Day before the Draw Date of each Prime Rate Loan and three (3)
Business Days before the Draw Date of each Libor Rate Loan.  Each Request for Advance
shall specify:

(i)  the Draw Date (which shall be a Business Day) for such Loan;

(ii)  the aggregate amount of such Loan;

(iii)  the Rate Option selected for such Loan; and

(iv) in the case of each Libor Rate Loan, the Interest Period applicable
thereto.

Each Libor Rate Loan shall bear interest from and including the first day of the Interest Period
applicable thereto until (but not including) the last day of such Interest Period at the interest rate
determined as applicable to such Libor Rate Loan.  Borrower shall select Interest Periods with
respect to Libor Rate Loans so that it is not necessary to pay a Libor Rate Loan prior to the last
day of the applicable Interest Period in order to repay all of the Loans on the Termination Date.
Provided that no Default or Event of Default shall have occurred and be continuing, Borrower
may elect to continue a Loan as a Libor Rate Loan by giving irrevocable written, telephonic or
telegraphic notice thereof to the Bank not less than three (3) Business Days prior to the last day
of the then-current Interest Period applicable to such Libor Rate Loan, specifying the duration
of the succeeding Interest Period therefor.  If the Bank does not receive timely notice of such
election, Borrower shall be deemed to have elected to convert such Libor Rate Loan to a Prime
Rate Loan at the end of the then-current Interest Period.  Provided that no Default or Event of
Default shall have occurred and be continuing, Borrower may convert any outstanding Prime
Rate Loan, or portion thereof, into a Libor Rate Loan in the same aggregate principal amount.
If Borrower desires so to convert a Prime Rate Loan, it shall give the Bank prior written,
telephonic or telegraphic notice at least three (3) Business Days prior to the requested
conversion date, which notice shall specify the duration of the Interest Period therefor.

(b)	Monthly Installments.

(i)  Borrower shall pay to the Bank, monthly in arrears on the last
Business Day of each month beginning with the month following the month in
which the Closing Date occurs, interest on the outstanding principal amount of
the Prime Rate Loans at the annual rate equal to the Prime Rate; provided,
however, that if Borrower elects to convert a Prime Rate Loan to a Libor Rate
Loan pursuant to Section 3(a), above, Borrower shall pay to the Bank all accrued
but unpaid interest on the Prime Rate Loan being so converted, for the period
commencing on the date of the last payment date under this Section 3(b) and
concluding on the day immediately preceding the first day of the Interest Period
for the Libor Rate Loan into which the Prime Rate Loan is converted.

(ii)  Borrower shall pay to the Bank, in arrears, interest on the outstanding
principal amount of the Libor Rate Loans at the annual rate equal to the Libor
Rate.  Such interest shall be due and payable on the last Business Day of the
applicable Interest Period for each Libor Rate Loan.

(d)	Interest on Overdue Payments; Default Interest Rate. If any payment of
principal or interest is not paid when due, or prior to the expiration of the applicable period of
grace (if any) therefor, the Bank may charge and collect from Borrower a Late Charge.  The
Bank may charge interest on the Late Charge at the Default Interest Rate until such time as
the required payment of principal and interest (together with the Late Charge) is paid
hereunder.  No failure by the Bank to charge or collect any Late Charge in respect of any
delinquent payment shall constitute a waiver by the Bank of any rights it may have hereunder,
including without limitation the right subsequently to impose a Late Charge for such delinquent
payment or to take such other actions as may then be available to it hereunder, under any other
Loan Document, at law or in equity.  If the Bank shall accelerate the indebtedness evidenced
by the Note pursuant to any provision hereof or of any other Loan Document, or if an Event of
Default hereunder or under any other Loan Document shall have occurred and be continuing,
the outstanding principal balance of the indebtedness advanced under this Agreement, together
with all accrued interest thereon, shall bear interest from the date on which such amount shall
have first become due and payable to the date on which such amount shall be paid (whether
before or after judgment) at the Default Interest Rate.  Interest at the Default Interest Rate will
continue to accrue and will (to the extent permitted by applicable law) be compounded daily
until the Obligations in respect of such payment are discharged (whether before or after
judgment).

4.	Repayments and Prepayments of Principal.

(a)	Optional Prepayments.  Borrower shall have the right to prepay the
principal of the Loans in full or in part at any time and from time to time upon payment to the
Bank of all accrued interest to the date of payment; provided, however, that (i) all partial
payments of principal shall be in an amount equal to or greater than One Million Dollars
($1,000,000); and (ii) all Loans may be prepaid without penalty or premium.  If Borrower shall
prepay any Libor Rate Loan on a day other than the final day of the Interest Period therefor,
such prepayment must include an amount equal to the Bank's Libor Break Funding Costs
applicable to or resulting from such prepayment.

(b)	Mandatory Prepayments.

(i)  If at any time the Outstanding Amount exceeds the Maximum
Commitment, Borrower shall immediately prepay all sums in excess of the
Maximum Commitment.

(ii)  If (and on each occasion that) a drawing or disbursement is made
under the Letter of Credit and is not reimbursed by Borrower (either by causing
the amount of such drawing or disbursement to be converted into a Loan or by
paying the Bank the amount of such drawing or disbursement in immediately
available funds, in either case as and when required by Section 6, below),
Borrower shall immediately prepay an amount equal to such drawing or
disbursement, together with interest thereon.

(c)  Application of Prepayments.  Any prepayment of the Note shall be applied
by the Bank as set forth in Section 5(b) hereof.  To the extent that such payment, repayment
or prepayment shall be applied to a Libor Rate Loan, the Bank (except as otherwise instructed
by Borrower, in writing, and except in the event of prepayment resulting from the acceleration
of the indebtedness evidenced by the Note following the occurrence of an Event of Default)
shall retain such amount until the expiration of the Interest Period applicable to such Libor Rate
Loan, and shall apply such payment at such time so as to minimize the Libor Break Funding
Costs which would otherwise be payable in consequence of such prepayment.

(d)  Maturity.  All of the indebtedness evidenced by the Note shall, if not sooner
paid, be in any event absolutely and unconditionally due and payable in full by Borrower on the
Termination Date.

(e)  Notice of Prepayments of Principal.  Borrower will provide the Bank at least
(1) one Business Day's advance, written notice of Borrower's intention to make any voluntary
prepayment of principal.  Such notice shall be irrevocable and shall specify the date of
prepayment and the aggregate amount to be paid.

5.	Payments and Computations.

(a)	Time and Place of Payments.  Each payment to be made by Borrower
under this Agreement shall be made directly to the Bank at its Head Office, not later than noon,
Cleveland time, on the due date of each such payment, in immediately available and freely
transferrable funds.  Any payment received after such time will be deemed to have been
received on the next Business Day.  All payments of interest, principal and all other amounts
owing hereunder or under the Note shall be documented by Borrower's transmitting to the
Bank, via telecopy, a Payment Authorization; the funds representing such payment shall be
transferred to the Bank as specified in such Payment Authorization.

(b)  Application of Funds.  All funds received by the Bank with respect to the
Obligations shall be applied as follows:

(i)  Provided that the indebtedness evidenced by the Note has not been
accelerated, and provided further that no Event of Default shall have occurred
and be continuing at the time that the Bank receives such funds, in the following
manner: (a) first, to the payment of all fees, charges, and other sums (other than
principal and interest) then due and payable to the Bank under the Note, this
Agreement or the other Loan Documents; (b) second, to the payment of all
accrued but unpaid interest at the time of such payment; and (c) third, to the
payment of principal of the Note.

(ii)  If the indebtedness evidenced by the Note has been accelerated, or
if an Event of Default shall have occurred and be continuing at the time the Bank
receives such funds, in the following manner: (a) first to the payment or
reimbursement of the Bank for all costs, expenses, disbursements and losses
which it shall have incurred or sustained by reason of such Event of Default or
in connection with the exercise by the Bank of its rights, remedies, powers and
privileges under this Agreement or any of the other Loan Documents; and (b)
second to the payment of all of the indebtedness evidenced by the Note in
accordance with Section 5(b)(i), above.

(c)  Payments on Business Days.  If any payment would (but for the provisions
of this Section 5(c)) be due and payable on any day which is not a Business Day, then such
sum shall become due and payable on the next succeeding Business Day, and interest payable
on such sum shall continue to accrue and shall be adjusted by the Bank accordingly.

(d)  Computation of Interest.  The Bank shall compute interest payable in respect
of the indebtedness evidenced by the Note on the basis of the actual principal amount
outstanding on each day during the payment period, on the basis of the actual number of days
elapsed during such period and of a year consisting of three hundred and sixty (360) days.  The
daily interest charge shall be one three-hundred-sixtieth (1/360th) of the annual interest
amount.  Each determination of any interest rate by the Bank shall be conclusive and binding
on Borrower in the absence of manifest error.

(e)	Payments to be Free of Deductions.  Each payment required of Borrower
under this Agreement, the Note, or any of the other Loan Documents shall be made without
set-off, deduction or counterclaim whatsoever, and shall be free of taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of
any nature now or hereafter imposed or levied by any governmental or taxing authority, unless
Borrower is compelled by law to make any such deduction or withholding.  If any such
obligation to deduct or withhold is imposed upon Borrower with respect to any such payment:
(i) Borrower may make the deduction or withholding required by law in respect of the said
payment, and (ii) there shall become and be absolutely due and payable by Borrower to the
Bank on the date on which such payment shall become due and payable, and Borrower hereby
promises to pay to the Bank on such date, such additional amount as shall be necessary to
enable the Bank to receive the same net amount as the Bank would have received had no such
obligation been imposed by law.  Notwithstanding the foregoing to the contrary, this
Section 5(e) shall not apply in the case of any deductions or withholdings made in respect of
taxes charged upon or by reference to the overall net income, profits or gains of the Bank.

6.	The Letters of Credit.

(a)	Issuance of Letters of Credit; Conditions and Limitations.  Upon the terms
and conditions set forth in this Agreement, Borrower may request, in accordance with the
provisions of this Section 6, that the Bank issue one or more Letters of Credit for its account
from time to time prior to the Termination Date.  If Borrower desires the issuance of a Letter
of Credit, it shall deliver to the Bank a Request for Issuance of Letter of Credit not later than
11:00 a.m. (Cleveland time) at least five (5) Business Days before the proposed Issuance Date
therefor.  The Request for Issuance of Letter of Credit shall be accompanied by a Letter of
Credit application, on the Bank's then-customary form, and shall contain, among other things,
the following information with respect to each requested Letter of Credit:  (i) its proposed
Issuance Date (which shall be a Business Day), (ii) its proposed Face Amount, (iii) its proposed
expiration date, (iv) the name and address of its proposed beneficiary, and (v) a summary of
its purpose and contemplated terms.  Borrower shall, in addition provide the Bank with a
precise description of any documents to be presented under, and any other terms of, the
requested Letter of Credit, together with the text of any certificate to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration date of the Letter of
Credit, would require the Bank to make payment under the Letter of Credit.  No Letter of Credit
shall require payment against a conforming draft to be made thereunder on the same Business
Day that such draft is presented if such presentation is made after 10:00 a.m. (Cleveland time)
on such Business Day.  The minimum Face Amount of any Letter of Credit shall be One
Hundred Thousand Dollars ($100,000).  The issuance of each Letter of Credit shall be subject
to the satisfaction, on the Issuance Date for each Letter of Credit, of all of the conditions
precedent set forth in Section 7, below, and to the following additional limitations:

(i)	Borrower shall not request the issuance of a Letter of Credit if,
after giving effect to the issuance of such Letter of Credit, the Outstanding
Amount would exceed the Maximum Commitment; and

(ii)	In no event shall the Bank issue any Letter of Credit having an
expiration date later than the first to occur of (x) the Termination Date or (y) one
(1) year after the Issuance Date of the proposed Letter of Credit; the Bank may
agree that a Letter of Credit will automatically be renewed for a period not to
exceed one (1) year after the initial expiry date thereof if the Bank does not
cancel such renewal, provided that all of the conditions to the issuance of a
Letter of Credit set forth or referred to in this Section 6(a) must be satisfied as
of each such renewal date in respect of such renewal and provided further that
the expiry date, as so extended shall be no later than the Termination Date.

(b)	Issuance of Letters of Credit.	Provided that all of the conditions
precedent to the issuance of the requested Letter of Credit have been satisfied, the Bank shall
cause each Letter of Credit to be issued in accordance with the terms of the respective
Request for Issuance of Letter of Credit therefore.

(c)	Payment in Certain Circumstances.	Each Letter of Credit shall
provide that the Bank may (but shall not be required to) pay the beneficiary thereof upon the
occurrence of an Event of Default and the acceleration of the maturity of the Loans or, if
payment is not then due to the beneficiary under such Letter of Credit, may provide for the
deposit of funds in an account to secure payment to the beneficiary, and that any funds so
deposited shall be paid to such beneficiary (subject to the satisfaction of all conditions to such
payment), or returned to the Bank (or, if all Obligations then shall have been indefeasibly paid
in full, to Borrower) if no payment to such beneficiary has been made and if the final date
available for drawings under the Letter of Credit has passed.  Each payment or deposit of funds
by the Bank as provided in this paragraph shall be treated as a drawing duly honored by the
Bank under the related Letter of Credit.

(d)	Termination of Credit Commitment.	If for any reason the Credit
Commitment shall terminate when any Letter of Credit is outstanding, Borrower shall, on or
prior to the date of such termination:  (i) cause each outstanding Letter of Credit to be
cancelled, and an amount equal to all amounts previously drawn under Letters of Credit and
not theretofore reimbursed by Borrower or converted into Loans pursuant to Section 6(e) to be
paid immediately to or as directed by the Bank; or (ii) deposit, with the Bank, immediately
available funds in an amount equal to the Letter of Credit Usage to secure all outstanding
Letters of Credit which are not cancelled as described in the preceding clause.

(e)	Payment of Amounts Drawn Under Letters of Credit.  Upon receipt by the
Bank of any request for drawing under its Letter of Credit by the beneficiary thereof, the Bank
shall promptly notify Borrower of any such request.  Borrower shall, and hereby convenants and
agrees to, reimburse the Bank on the day on which such drawing is honored in an amount, in
immediately available funds, equal to the amount of such drawing; provided that (i) unless
Borrower shall have notified the Bank prior to 11:00 a.m. (Cleveland time) on the Business Day
immediately prior to the date of such drawing that Borrower intends to reimburse the Bank for
the amount of such drawing with funds other than the proceeds of Loans, Borrower shall be
deemed to have given a Request for Advance to the Bank requesting a Prime Rate Loan on
the date on which such drawing is honored, in the amount of such drawing; and (ii) the Bank
shall, on the date of such drawing, make a Loan in the amount of such drawing, the proceeds
of which shall be applied to reimburse the Bank for the amount of such drawing.

(f)	Compensation.  Borrower agrees to pay to the Bank, with respect to each
Letter of Credit issued pursuant to this Agreement:

(i)	the Letter of Credit Commission, on the Issuance Date of such
Letter of Credit (and, solely in the case of Letters of Credit which are renewed
after the expiration of the initial period thereof, on each renewal date for so long
as such Letters of Credit remain outstanding);

(ii)	the Letter of Credit Fee, on the Issuance Date for each Letter of
Credit; and

(iii)	with respect to the issuance, amendment or transfer of each Letter
of Credit and each drawing made thereunder, documentary and processing
charges in accordance with the Bank's standard schedule for such charges in
effect at the time of such issuance, amendment, transfer or drawing, as the case
may be.

(g)	Obligations Absolute.	The obligation of Borrower to reimburse the
Bank for drawings made under the Letters of Credit shall be unconditional and irrevocable, and
all sums payable in connection therewith shall be paid strictly as and when provided therein
regardless of:

(i)	the invalidity or unenforceability of any Letter of Credit;

(ii)	the existence of any claim, set-off, defense or other right which
Borrower may have at any time against a beneficiary or any transferee of any
Letter of Credit (or any persons or entities for whom any such transferee may be
acting), the Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Borrower and the beneficiary for
which the Letter of Credit was procured);

(iii)	any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;

(iv)	payment by the Bank under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit, provided that such payment does
not constitute gross negligence or willful misconduct of the Bank;

(v)	any other circumstance or occurrence whatsoever, which is similar
to any of the foregoing; or

(vi)	the fact that a Default or an Event of Default shall have occurred
and be continuing.

(h)	Indemnification; Nature of the Bank's Duties.   In addition to amounts
payable as elsewhere provided in this Section 6, and without limiting any other indemnification
provided for in this Agreement, Borrower agrees to protect, indemnify, pay and save the Bank
harmless from and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees) which the Bank may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit, other
than as a result of the gross negligence or willful misconduct of the Bank as determined by a
court of competent jurisdiction, or (ii) the failure of the Bank to honor a drawing under any Letter
of Credit  as a result of any act or omission, whether rightful or wrongful, of any present or
future *de jure* or *de facto* government or governmental authority.  As between Borrower and the
Bank, Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit issued by the Bank by, the respective beneficiaries of such Letters of Credit.  In
furtherance and not in limitation of the foregoing, the Bank shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for the issuance of Letters of Credit, even if any of
the foregoing should in fact prove to be invalid, insufficient, inaccurate, fraudulent or forged in
any respect; (ii) the validity or insufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) the failure of the beneficiary of any Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit; (iv) the errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph, telecopy, telex
or otherwise, whether or not they be in cipher; (v) the errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit or any proceeds thereof; (vii) the misapplication by
the beneficiary of any Letter of Credit or the proceeds of any drawing under such Letter of
Credit; and (viii) for any consequences arising from causes beyond the control of the Bank.
None of the above shall affect, impair, or prevent the vesting of any of the Bank's rights or
powers hereunder.  In determining whether to pay under any Letter of Credit, the Bank shall
be responsible only to determine that the documents and certificates required to be delivered
under that Letter of Credit have been delivered and that the same comply on their face with the
requirements of that Letter of Credit.  Borrower shall have no obligation to indemnify the Bank
in respect of any liability incurred by the Bank arising solely out of the gross negligence or willful
misconduct of the Bank, as determined by a court of competent jurisdiction, or out of the
wrongful dishonor by the Bank of a proper demand for payment made under the Letters of
Credit issued by it.

(i)	Amendments.  Borrower may request that the Bank enter into one or
more amendments of a Letter of Credit by delivering to the Bank a notice specifying the
proposed date and the nature of the requested amendment.  The Bank may amend any Letters
of Credit, provided that any amendment extending the expiry date or increasing the stated
amount of any Letter of Credit shall be permitted only if the Bank would, at the time of the
proposed amendment, be permitted to issue a new Letter of Credit having such an expiry date
or stated amount under this Section 6 on the date of the Amendment.

7.	Conditions Precedent to Amendment and Restatement.  The effectiveness of this
Agreement and of the amendment and restatement of the Existing Loan Agreement hereby
and, the obligation of the Bank to make Advances and issue Letters of Credit are subject to the
following conditions precedent.

(a)	The Bank shall have received from Borrower (i) a copy, certified by a duly
authorized officer of Borrower to be true and complete on and as of the Closing Date, of
Borrower's Articles of Incorporation, and by-laws or code of regulations as in effect on the
Closing Date (together with any an all amendments thereto); (ii) the charter or other
organizational documents of Borrower, certified by the Ohio Secretary of State; and (iii) a
Certificate of Good Standing for Borrower, each issued by the Ohio Secretary of State not more
than thirty (30) days before the Closing Date.

(b)	The Bank shall have received from Borrower copies, certified by a duly
authorized officer of Borrower to be true and complete on and as of the Closing Date, of
records of all corporate action taken by Borrower to authorize (i) the execution and delivery of
this Agreement and the other Loan Documents to which it is a party; (ii) its performance of all
of its obligations under each of such documents; and (iii) the making by Borrower of the
borrowings contemplated hereby.

(c)  The Bank shall have received from Borrower an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer and giving the name and
bearing a specimen signature of each individual who shall be authorized (i) to sign, in the name
and on behalf of Borrower, each of the Loan Documents to which Borrower is or is to become
a party on the Closing Date; and (ii) to give notices and to take other action on behalf of
Borrower under the Loan Documents.

(d)	Borrower shall have executed and delivered to the Bank the Note, the
Assignments, the Environmental Indemnity Agreements, the Mortgages, Uniform Commercial
Code Financing Statements (the "Financing Statements") and such additional documents,
instruments and agreements as the Bank may reasonably require to evidence or to secure the
Loan or as may be necessary or reasonable or reasonably appropriate to enable the Title
Company Title Policies as required by this Agreement.

(e)	Borrower shall have:

(i)  Filed the respective Mortgages for record in the real property records
of the counties in which the respective Mortgaged Properties are located;

(ii)  Filed the Financing Statements for record in the appropriate public
records of each county in which a Mortgaged Property is located and in the
Uniform Commercial Code indices maintained by the Ohio Secretary of State;

(iii)  Furnished a Title Policy insuring that each Mortgage is the first and
paramount lien upon the Mortgaged Property encumbered thereby;

(iv)  Furnished to the Bank a survey with respect to each Mortgaged
Property showing such matters as may be required by the Bank, which survey
shall be:  (x) acceptable in form and content to the Agent; (y) certified to the
Bank and the Title Company; and (z) prepared by a registered surveyor
acceptable to the Agent in accordance with the minimum standard detail
requirements for ALTA/ACSM Title Surveys, so as to eliminate any and all
"survey exceptions" from the Title Insurance Policy with respect to the
Mortgaged Property, and containing (A) a note as to the zoning classification of
the subject property; and (B) if applicable, the Flood Map panel number, suffix,
map date and zone for the subject Mortgaged Property;

(v)  Furnished to the Bank environmental site assessments, satisfactory
in form and content to the Bank and showing that each Mortgaged Property is
free from any and all Hazardous Substances and from any and all other
environmental hazards or adverse environmental conditions; and

(vi)  Furnished to the Bank an appraisal, satisfactory in form and content
to the Bank and complying with all applicable standards for such appraisals
(including, without limitation, the standards established with respect to appraisals
by Federal laws and regulations applicable to national banking associations),
prepared by an appraiser belonging to the American Institute of Real Estate
Appraisers (or having a corresponding professional designation acceptable to
the Bank) and showing such appraiser's evaluation of the fair market value of
each Mortgaged Property.

In addition, Borrower shall have paid all costs and expenses payable in connection with all of
the foregoing, including but not limited to all expenses and premiums with respect to the Title
Policies or otherwise payable to the Title Company.

(f)  No change in applicable law shall have occurred which would make it unlawful
(i) for the Bank to perform any of its agreements or obligations under any of the Loan
Documents to which it is a party on the Closing Date; or (ii) for Borrower to perform any of its
agreements or obligations under any of the Loan Documents.

(g)  Borrower shall have duly and properly performed, complied with and
observed, in all material respects, each of its covenants, agreements and obligations contained
in each of the Loan Documents to which Borrower is a party or by which Borrower is bound on
the Closing Date.  No event shall have occurred on or prior to the Closing Date, and no
condition shall exist on the Closing Date, which constitutes or would constitute a Default or an
Event of Default.

(h)  Borrower shall have reimbursed the Bank for all reasonable out-of-pocket
costs and expenses, including without limitation, all attorney's, appraisal, environmental and
other fees incurred by the Bank.

(i)  The Bank shall have received such other approvals, opinions, certificates,
instruments and documents with respect to the transactions described herein as it may
reasonably request.

(j)  Each of the representations and warranties made by or on behalf of Borrower
in this Agreement or in any other Loan Document shall be true, correct and complete in all
material respects.

8.	Conditions Precedent to Subsequent Advances and Letters of Credit.  The
obligation of the Bank to make or disburse any one or more Advances or to issue Letters of
Credit from time to time after the Closing Date shall be subject to the satisfaction, prior thereto
or concurrently therewith, of each of the following conditions precedent on or before the Draw
Date for each Advance or the Issuance Date for each Letter of Credit:

(a)  It shall not be unlawful (a) for the Bank to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party; or (b) for Borrower to
perform any of its agreements or obligations under any of the Loan Documents.

(b)  Each of the representations and warranties made by or on behalf of Borrower
in this Agreement or any other Loan Document (a) shall be true and correct when made and
(b) shall, for all purposes of this Agreement, be deemed to be repeated on and as of the date
of the Borrower's Request for Advance or request for Issuance of Letter of Credit for such
Advance, and shall be true and correct in all material respects as of such date.

(c)  Borrower shall have performed, complied with and observed, in all material
respects, each of its covenants, agreements and obligations contained in this Agreement
and/or in all of the other Loan Documents.

(d)  No event shall have occurred on or prior to such date and be continuing on
such date, and no condition shall exist on such date which constitutes a Default or Event of
Default;

the making of such Loan or the issuance of such Letter of Credit shall not result in a Default
or an

Event of Default.

(e) The Bank shall have received such other approvals, opinions, certificates,
instruments and documents as it may reasonably request.

(f)  The making of such Loan or the issuance of such Letter of Credit shall not
cause the Outstanding Amount to exceed the Maximum Commitment.

9.	Representations and Warranties.  Borrower warrants and represents to the Bank
that:

(a)  Borrower:  (i) is duly organized, validly existing and in good standing as a
corporation under the laws of the State of Ohio; (ii) has full corporate power and authority and
full legal right to own or to hold under lease its property and to carry on its businesses; and (iii)
Borrower is a self-administered real estate investment trust ("REIT").  Borrower is qualified and
licensed, admitted or approved to do business in each jurisdiction in which the character of its
Property or the nature of its business make such qualification necessary or advisable and
where the failure to so qualify would have a materially adverse effect on Borrower.

(b)  Borrower has appropriate corporate power and authority, and full legal right,
to enter into this Agreement and each of the other Loan Documents, and to perform, observe
and comply with all of its agreements and obligations hereunder and thereunder.

(c)  The execution and delivery by Borrower of this Agreement and each of the
other Loan Documents, the performance by Borrower of all of its agreements and obligations
under such documents, and the making by Borrower of the borrowings contemplated by this
Agreement have been duly authorized by all necessary corporate action on the part of Borrower
and do not and will not (i) contravene any provision of its charter documents or by-laws or code
of regulations (each as in effect from time to time); (ii) conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or (except as expressly
contemplated by the terms of this Agreement) result in the creation of any lien upon any of the
Property of Borrower under any agreement, trust deed, indenture, mortgage or other instrument
to which Borrower is a party or by which Borrower or any other property of Borrower is bound
or affected; (iii) violate or contravene any provision of any law, rule or regulation (including,
without limitation, any application Regulations of the Board of Governors of the Federal
Reserve System) or any order, ruling or interpretation thereunder or any decree, order or
judgment of any court or governmental or regulatory authority, bureau, agency or official (all
as from time to time in effect and applicable to Borrower); or (iv) require any waivers, consents
or approvals by any of the creditors or trustees for creditors of Borrower or any other Person.

(d)  Except as to matters which Borrower has procured, obtained or performed
prior to or concurrently with its execution and delivery of this Agreement, no approval, consent,
order, authorization or license by, giving notice to or taking any other action with respect to, any
governmental or regulatory authority or agency is required under any provision of any
applicable law:

(i)  for Borrower's execution and delivery of this Agreement and the other
Loan Documents, its performance of its obligations hereunder or thereunder, or
for Borrower's making the borrowings contemplated by this Agreement; or

(ii)  to ensure the continuing legality, validity, binding effect, enforceability
or admissibility in evidence of this Agreement and the other Loan Documents.

(e)  There are no actions, suits or proceedings pending or, to the knowledge of
Borrower, threatened against it, at law or in equity or before any governmental department,
commission, board, bureau, agency or instrumentality which challenge the validity or
enforceability of this Agreement or any of the other Loan Documents or which, if determined
adversely to Borrower, could reasonably be expected to result in any material, adverse effect
upon Borrower.

(f)  This Agreement and the other Loan Documents shall, when executed and
delivered by Borrower, constitute Borrower's valid and binding obligation, and will be
enforceable against Borrower in accordance with their respective terms (subject, as to such
enforceability, to limitations imposed by general equitable principles and by bankruptcy and
insolvency laws and judicial principles).

(g)  All financial information submitted with respect to Borrower in connection with
the application for the Loan accurately reflects the financial condition of Borrower as of the date
thereof and has been prepared in accordance with GAAP for all periods described therein;
there has been no materially adverse change in the financial condition of such Borrower since
the date of such information that has not been disclosed to the Bank, and there are no known
contingent liabilities of Borrower, including without limitation any estimated possible liabilities
in pending or threatened litigation, required to be disclosed in connection with such financial
information but not reflected therein.

(h) This Agreement and all financial statements, certificates, and other materials
submitted to the Bank in connection with or in furtherance of this Agreement by or on behalf
of Borrower fully and fairly state the matters with which they purport to deal, do not misstate any
material fact, nor, separately or in the aggregate, do they fail to state any material fact
necessary to make the statements therein made not misleading.

(i)  Borrower has filed all federal, state and other tax returns required to be filed
by it and has made reasonable provisions, in accordance with GAAP as in effect as of the date
hereof, for the payment of all taxes (if any) which have or may become due and payable
pursuant to such returns or pursuant to any matters raised by audits or for other reasons.  In
addition, Borrower has paid or caused to be paid all real and personal property taxes and
assessments and other governmental charges lawfully levied or imposed on or against it or its
property, other than those presently payable without payment of interest or penalty and those
which are subject to contests initiated by Borrower in good faith and diligently prosecuted.

(j)  Borrower is not engaged in the business of extending credit for the purpose
of purchasing or carrying any "margin security" or "margin stock" as such terms are used in the
applicable Regulation the Board of Governors of the Federal Reserve System.

(k)  Borrower is not in default under any order, writ, judgment, injunction, decree,
statute or governmental rule, indenture, agreement, contract, lease or other instrument or
contract applicable to it, which default would have a material adverse effect on the business,
assets, Properties or conditions, financial or otherwise, of Borrower or in the performance of
any covenants or conditions respecting any of its material Indebtedness, and no holder of any
material Indebtedness of Borrower (which, for the purposes of this Section, shall mean any
discrete Indebtedness having an outstanding principal balance, as of the date of determination,
in excess of Three Million Dollars ($3,000,000)) has given notice of any asserted default
thereunder, and no liquidation or dissolution of Borrower and no receivership, insolvency,
bankruptcy, reorganization or other similar proceedings relative to Borrower or its Property is
pending threatened.

(l)  Immediately after the date hereof and immediately following the making of
each Loan and after giving effect to the application of the proceeds of such Loans:  (i) the fair
value of Borrower's assets, at a fair valuation, exceeds and will exceed Borrower's debts and
liabilities (subordinated, contingent or otherwise); (ii) the present fair saleable value of
Borrower's Property will be greater than the amount that would be required to pay Borrower's
probable liability on its debts and other liabilities, subordinated, contingent or otherwise, as the
same become absolute and matured; (iii) Borrower will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become absolute and
matured; and (iv) Borrower will not have unreasonably small capital with which to conduct the
businesses in which it is engaged as such businesses are now conducted and are proposed
to be conducted after the date hereof.  Borrower does not intend to, and does not believe that
it will, incur debts beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it and the timing of the amounts to be payable
in respect of Borrower's liabilities.

(m)  Borrower is in good standing on the New York Stock Exchange and is
qualified and in compliance in all material respects with all provisions of the Code applicable
to the qualification of Borrower as a REIT.

10.	Covenants.  While this Agreement is in effect, and until the Bank has been repaid
in full for the principal of and interest on all advances made hereunder by the Bank:

(a)  Within fifty (50) days after the close of each of the first three quarters of each
fiscal year of Borrower, Borrower shall furnish the Bank with balance sheets of Borrower as of
the end of such quarter and statements of income and statements of cash flow of Borrower for
the period commencing at the end of the previous fiscal year and ending with the end of such
quarter, certified by the chief financial officer, principal accounting officer or chief executive
officer of Borrower.  Borrower shall provide the Bank with copies of all reports sent by Borrower
to its shareholders, and copies of all reports and registration statements Borrower files with the
United States Securities and Exchange Commission promptly after it sends or files such
materials.  Borrower shall also furnish to the Bank such additional information concerning
Borrower's financial condition and operations as the Bank may reasonably request from time
to time; and

(b)  Within ninety (90) days after the end of each fiscal year of Borrower,
Borrower shall furnish the Bank with a copy of Borrower's annual financial statements for such
year, including therein a copy of the balance sheet of Borrower as of the end of such fiscal year
and statements of income, cash flow and shareholders' equity of Borrower, certified without
qualification by a nationally recognized firm of certified public accountants selected by Borrower
and acceptable to the Bank.

(c)  Borrower will duly and punctually pay, observe and perform all of its
obligations under the Loan Documents.

(d)  Borrower shall make all governmental filings and take all other action
necessary to preserve and maintain (i) its qualifications as a REIT under the Code and (ii) the
applicability to Borrower and its shareholders of the method of taxation provided for in Section
857(b) of the Code (and any successor provision thereto).

(e)  Borrower shall preserve and maintain (i) its existence and all of its rights,
franchises and privileges as an Ohio corporation; and (ii) the listing of Borrower's common
stock on the New York Stock Exchange.

(f)  Borrower shall comply with all statutes, ordinances, governmental regulations
and judicial decisions and orders applicable to any Mortgaged Property, or applicable to
Borrower or its business (except, as to the latter, to the extent that the failure so to comply
could not reasonably be expected to have a material, adverse effect upon Borrower's financial
condition or operations or to affect Borrower's right or ability to comply with its obligations
hereunder or under any other Loan Document), and shall promptly notify the Bank in the event
that Borrower receives any written notice, claim or demand from any governmental agency
which alleges that Borrower is in violation of any of the same.

(g)  Borrower will notify the Bank, in writing, promptly after Borrower shall become
aware of the same, of any final judgment in an amount exceeding Five Hundred Thousand
Dollars ($500,000) rendered against Borrower or any affiliate of Borrower; (b) the
commencement or institution of any legal or administrative action, suit, proceeding or
investigation by or against Borrower in or before any court, governmental or regulatory body,
agency, commission or official, board of arbitration or arbitrator, the outcome of which could
materially and adversely affect Borrower's current or future financial position, assets, business,
operations or prospects, or could prevent or impede the implementation or completion,
observance or performance of any of the arrangements or transactions contemplated by any
of the Loan Documents; or (c) the occurrence of any adverse development, not previously
disclosed by Borrower to the Bank in writing, in any such action, suit, proceeding or
investigation.

(h)  Borrower will duly and punctually pay or cause to be paid the principal and
interest on the Loans and all fees and other amounts payable hereunder or under the Loan
Documents, as and when required by this Agreement and/or the other Loan Documents.
Borrower shall pay all other Indebtedness (whether existing on the date hereof or arising at any
time thereafter) as and when the same is due and payable.

(i)  Borrower shall pay and discharge promptly all taxes, assessments and other
governmental charges or levies at any time imposed upon it or upon its income, revenues or
Property, as well as all claims of any kind (including claims for labor, material or supplies)
which, if unpaid, might by law become a Lien or charge upon all or any part of its income,
revenues or Property.  Notwithstanding the foregoing to the contrary, Borrower may, provided
that there is not then an Event of Default hereunder, contest the propriety or amount of any
such taxes, assessments or governmental charges, or of any such claims, if (a) such contest
is instituted in good faith and prosecuted with reasonable diligence; (b) such contest shall
preclude the sale or forfeiture of the affected Property (or Borrower shall provide the Bank with
such reasonable security or other assurances as may be requested by the Bank in connection
with such contest); and (c) Borrower shall indemnify the Bank of and from any and all liability,
loss, cost or expense incurred by or asserted against any such party in connection with, or in
consequence of, any such contest.

(j)  Borrower will obtain all approvals, consents, orders, authorizations and
licenses necessary for the proper and lawful performance by Borrower of any of its agreements
or obligations under the Note, this Agreement or any of the other Loan Documents or for the
payment by Borrower of any sums which shall become due and payable by Borrower to the
Bank hereunder or thereunder, or to ensure the continuing legality, validity, binding effect or
enforceability of this Agreement, the Note or any of the other Loan Documents or, to continue
the proper operation of the business and operations of Borrower.

(k)  Borrower will execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any and all such further assurances and other agreements or
instruments, and take or cause to be taken all such other action, as shall be reasonably
requested by the Bank from time to time in order to give full effect to this Agreement or any of
the other Loan Documents.

(l)  Borrower shall use all funds advanced to or for its account pursuant to this
Agreement only for its general corporate purposes, and for no other purpose whatsoever
without the prior, written consent of the Bank.

(m)  Borrower will not make any material alterations in the nature or character
of its business as carried on at the date hereof, or undertake, conduct or transact any business
in a manner prohibited by applicable law.

(n)  Borrower shall not at any time consolidate with or merge into or with any
Person, or Persons or enter into or undertake any plan or agreement of consolidation or merger
with any Person, provided, however, that this Section 10(n) shall not prohibit Borrower from
merging any one or more of Borrower's subsidiaries with or into Borrower.

(o)  Borrower shall not own, purchase or acquire (or enter into any contract to
purchase or acquire) any "margin security" as defined by any regulation of the Federal Reserve
Board unless, prior to any such purchase or acquisition or entering into any such contract, the
Bank shall have received an opinion of counsel satisfactory to the Bank to the effect that such
purchase or acquisition will not cause this Agreement or the Note to be in violation of any
regulation of the Federal Reserve Board applicable to the transactions described in this
Agreement.

11.	Disbursement Procedures.  Advances shall be disbursed pursuant to the
procedures set forth in this Section 11.  All requests for disbursements of Advances shall be
made by Borrower, in writing, on a Request for Advance.  Such Request for Advance may be
transmitted to the Bank at its Head Office via fax or telecopy, provided that Borrower
immediately notify the Bank by telephone of such transmission.  All Requests for Advance shall
be transmitted to and received by the Bank not later than 11:00 a.m., Cleveland time, on a
business day which is not less than three (3) business days prior to the Draw Date specified
on such Request for Advance.

(b)  The Bank shall disburse the proceeds of each Advance to Borrower, in
immediately available funds, not later than Noon, Cleveland time, on the Draw Date therefor,
provided that:  (x) Borrower shall have provided the Bank with a Request for Advance for such
Advance as and when provided above; (y) all of the conditions precedent applicable to such
Advance shall be satisfied as at the Closing Date or such later Draw Date as may be applicable
to such Advance; and (z) there shall be no uncured Default or Event of Default.

12.	Default and Remedies.

(a)  Any of the following events shall constitute an "Event of Default" under this
Agreement:

(i)	Borrower shall default in the payment of any sum due to the Bank
hereunder or under the Note, and such default shall continue for a period of five
(5) days following the due date of such payment;

(ii)	Borrower shall default in the performance or observance of any
agreements or conditions required to be performed or observed by it under this
Agreement, other than those described in clause (a), above, and such default
shall continue for a period of thirty (30) days or more after written notice
specifying such default (provided that if such default cannot be cured by the
payment of monies and cannot reasonably be cured within thirty (30) days,
Borrower shall have a reasonable time to effect a cure, if curative action is
commenced within said thirty (30) day period and is thereafter pursued diligently
and in good faith by Borrower to completion);

(iii)  Any representation or warranty made by Borrower in this Agreement,
any Loan Document or in any certificate or document furnished under the terms
of this Agreement shall prove to be untrue in any material respect;

(iv)  Borrower shall admit in writing its inability to pay its debts as they
become due and payable, or shall make an assignment for the benefit of
creditors, or shall be adjudicated a bankrupt, or shall file a voluntary petition in
bankruptcy, or effect a plan or other arrangement with creditors, or shall have
applied for or permitted the appointment of a receiver or trustee or custodian for
any of his or its property or assets, or a trustee, receiver or custodian shall have
been appointed for any property or assets of Borrower who shall not have been
discharged within sixty (60) days after the date of his appointment; or

(v)  an Event of Default shall have occurred under any Loan Document
and shall remain uncured beyond the expiration of any period of notice and/or
grace applicable to the same under such instrument.

(b)  Upon the occurrence and at any time during the pendency of a Default, the
Bank may, at its option, exercise any or all of the following rights and remedies:

(i)  The Bank may terminate its obligation to make Advances under this
Agreement, and may declare the entire unpaid principal balance of the advances
made under this Agreement to be immediately due and payable, together with
accrued and unpaid interest on such advances at the rate set forth in the Note,
without further notice to or demand on the Borrowers.

(ii)  The Bank may accelerate the maturity of the indebtedness evidenced
by the Note and avail itself of any and all other rights and remedies which may
then be available to it hereunder, under any of the other Loan Documents, at law
or in equity.  All such remedies shall be cumulative, and not exclusive; the
Bank's exercise of any one or more of such rights or remedies shall neither
constitute an election of remedies nor operate as a waiver of any other rights or
remedies which may be or become available to the Bank.

13.	Miscellaneous Provisions.  (a)  This Agreement shall inure to the benefit of and
be binding upon Borrower and the Bank and their respective successors and assigns; provided,
however, that this Agreement may not be assigned by Borrower without the prior, written
consent of the Bank.  No delay on the part of the Bank in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege constitute such waiver nor exhaust the same, which shall be continuing.  The
rights and remedies of the Bank specified in this Agreement shall be in addition to and not
exclusive of any other rights and remedies which the Bank, by operation of law, would
otherwise have.

(b)	All agreements, representations and warranties made in this Agreement
shall survive its execution, the making of the advances by the Bank, and the execution of the
Note and the other Loan Documents, and shall continue until the Bank receives payment in full
for all indebtedness of the Borrower incurred under this Agreement.

(c)	This Agreement may be executed in any number of counterparts, all of
which shall constitute a single agreement.

(d)	All notices, requests, demands and other communications in connection
with this Agreement shall be in writing and shall be sent by certified mail, postage prepaid,
return receipt requested and addressed as set forth below:

(i)  if to the Bank:

National City Bank

1900 East Ninth Street

Cleveland, Ohio  44114

Attn:  Gary L. Wimer, Senior Vice President

Locator No. 2152

with a copy concurrently to:

Frantz Ward LLP

55 Public Square - 19th Floor

Cleveland, Ohio  44113

Attn:  William K. Smith, Esq.

(ii)  if to Borrower:

Associated Estates Realty Corporation

5025 Swetland Court

Cleveland, Ohio  44143

Attn:  Jeffrey I. Friedman, President

with a copy concurrently to:

Associated Estates Realty Corporation

5025 Swetland Court

Cleveland, Ohio  44143

Attn:  Martin A. Fishman, Esq., General Counsel

All notices furnished in compliance with the foregoing shall be deemed effective when received
by the party to whom it is addressed.

(f)  This Agreement shall be governed by the laws of the State of Ohio.

(g)  AS A MATERIAL INDUCEMENT FOR THE BANK TO EXTEND CREDIT TO
BORROWER, AND AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL
OF ITS OWN SELECTION, BORROWER HEREBY EXPRESSLY WAIVES THE RIGHT TO
TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS OR ARISING IN ANY WAY FROM THE
OBLIGATIONS ARISING HEREUNDER.

(h)	The headings of the Sections and paragraphs of this Agreement have
been inserted for convenience of reference only and shall not be deemed to alter, limit or affect
the scope, meaning or interpretation of any provision of this Agreement.

(i)  If any provision of this Agreement or the application thereof to any person or
circumstance shall be invalid or unenforceable to any extent, the balance of this Agreement and
the application of all provisions of this Agreement to all other persons and circumstances shall
not be affected thereby; each provision of this Agreement shall remain valid and enforceable
to the fullest extent permitted by law.

(j)  All Advances and all Loans under this Agreement constitute one loan, and
all Obligations of Borrower under this Agreement and all of the other Loan Documents
constitute one general obligation.  All of the rights of the Bank contained in this Agreement shall
likewise apply insofar as applicable to any modification of or supplement to this Agreement. No
officers, directors, shareholders or employees of Borrower shall have any personal liability for
any obligations under this Agreement or as a result of any documents or certificates delivered
pursuant to this Agreement, except in cases of actual fraud or willful misconduct; provided,
however, that nothing in this sentence shall be deemed in any way to limit the absolute and
unconditional liability of Borrower for the full and timely payment, observance and performance
of all of its obligations hereunder.

[signatures on next page]

IN WITNESS WHEREOF, Borrower and the Bank have executed this Agreement as of
the date first set forth above.

NATIONAL CITY BANK

By: /s/ Gary L. Wimer

Gary L. Wimer,

Senior Vice President

ASSOCIATED ESTATES REALTY

CORPORATION

By:/s/ Jeffrey I. Friedman

Jeffrey I. Friedman, CEO



******Payment Authorization**



******Request for Advance**



**Request for Issuance of Letter of Credit**