** **

CREDIT AGREEMENT

DATED AS OF APRIL 24,  2007

AMONG

ASSOCIATED ESTATES REALTYCORPORATION,

AS BORROWER

AND

NATIONAL CITY BANK

AS ADMINISTRATIVE AGENT, LEADARRANGER,AND BOOK MANAGER

AND

THE SEVERAL LENDERSFROM TIME TO TIME PARTIES HERETO,AS LENDERS

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CREDITAGREEMENT

This Credit Agreement, dated asof April 24, 2007, is among Associated Estates Realty Corporation (the "Borrower"),National City Bank, and the several banks, financial institutions and otherentities from time to time parties to this Credit Agreement (collectively, the"Lenders") and National City Bank, not individually, but as "Agent"or "Administrative Agent."

RECITALS

WHEREAS, the Borrower is primarily engaged in the businessof purchasing, owning, operating, developing and managing apartmentcommunities.

WHEREAS, the Borrower desires to borrow and Lenders desireto make available to the Borrower an unsecured revolving credit facility in theamount of $100,000,000, on the terms and conditions contained herein, for thepurpose of allowing Borrower to refinance existing obligations and to provideit with working capital for the support of ongoing projects and to purchaseadditional real estate.

NOW, THEREFORE, in considerationof the mutual covenants and agreements herein contained, the parties heretoagree as follows:

### ARTICLEIDEFINITIONS

Asused in this Agreement:

"ABR Applicable Margin" means****as of any date, with respect to the determination of the Floating Rate thepercentage in effect on such date under the definition of the "Applicable Margin".

"Acquisition" means anytransaction, or any series of related transactions, consummated on or after thedate of this Agreement, by which the Borrower or any of its Subsidiaries(i) acquires any going business or all or substantially all of the assets ofany firm, corporation or division thereof, whether through purchase of assets,merger or otherwise or (ii) directly or indirectly acquires (in one transactionor as the most recent transaction in a series of transactions) at least amajority (in number of votes) of the securities of a corporation which haveordinary voting power for the election of directors (other than securitieshaving such power only by reason of the happening of a contingency) or amajority (by percentage or voting power) of the outstanding partnershipinterests of a partnership.

"Adjusted Funds From Operations"shall mean Funds From Operations, without any reduction  for Defeasance Costs.

"Administrative Agent" meansNational City Bank in its capacity as agent for the Lenders pursuant to ArticleX, and not in its individual capacity as a Lender, and any successorAdministrative Agent appointed pursuant to Article X.

"Advance" means a borrowinghereunder consisting of the aggregate amount of the several Loans made by oneor more of the Lenders to the Borrower of the same Type and, in the case ofLIBOR Rate Advances, for the same LIBOR Interest Period, including Swingline Advances.

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"Affiliate" of any Person meansany other Person directly or indirectly controlling, controlled by or undercommon control with such Person.  A Person shall be deemed to control anotherPerson if the controlling Person owns 10% or more of any class of votingsecurities (or other ownership interests) of the controlled Person orpossesses, directly or indirectly, the power to direct or cause the directionof the management or policies of the controlled Person, whether throughownership of stock, by contract or otherwise.

"Affordable Housing Projects"means any Project for which rents are subsidized and certain aspects of theoperations are regulated by the U.S. Department of Housing and UrbanDevelopment.

"Aggregate Commitment" means, asof any date, the aggregate of the then-current Commitments of all the Lenders,which is, as of the Agreement Execution Date, $100,000,000.

"Agreement" means this CreditAgreement, as it may be amended or modified and in effect from time to time.

"Agreement Execution Date" meansthe date this Agreement has been fully executed and delivered by all partieshereto.

"Allocated Facility Amount"means, at any time, the sum of all then outstanding Advances and all thenoutstanding Reimbursement Obligations.

"Alternate Base Rate" means, forany day, a rate of interest per annum equal to the higher of (i) the PrimeRate for such day and (ii) the Federal Funds Effective Rate for such day plus1/2% per annum. 

"Applicable Margin" means an annual percentage to be usedin calculating the interest rate applicable to the various Types of Advanceswhich shall vary from time to time with the ratio of Consolidated OutstandingIndebtedness to Total Asset Value as follows:

 

| Consolidated Outstanding  Indebtedness to Total Asset Value | LIBOR Applicable Margin | ABR Applicable Margin |
|-------------------------------------------------------------|-------------------------|-----------------------|
|                                                             |                         |                       |
| Less than 45%                                               | 1.30%                   | . 30%                 |
| Greater than or equal to  45%, but less than 50%            | 1.45%                   | .45%                  |
| Greater than or equal to  50% but less than 55%             | 1.60%                   | .60%                  |
| Greater than or equal to  55% but less than 60%             | 1.75%                   | .75%                  |
| Greater than or equal to  60%                               | 1.85%                   | .85%                  |

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As of the Agreement ExecutionDate, based on the ratio of Consolidated Outstanding Indebtedness to TotalAsset Value shown on the Compliance Certificate delivered to the AdministrativeAgent by Borrower pursuant to Section 5.1(k), the LIBOR Applicable Margin is1.60% and the ABR Applicable Margin is 0.60%. The percentages set forthabove shall be changed from time to time in accordance with the ratio ofConsolidated Outstanding Indebtedness to Total Asset Value as of the last dayof the most recent preceding fiscal quarter for which financial results havebeen reported, which percentage shall change upon the date Administrative Agenthas received a Compliance Certificate as required by Section 7.1(c)from  the Borrower as of the end of such fiscal quarter in the form attachedhereto as Exhibit B, beginning with the Compliance Certificate for thefiscal quarter ending March 30, 2007.  If any such Compliance Certificate shalllater be determined to be incorrect and as a result a higher Applicable Marginshould have been in effect for any period, Borrower shall pay to theAdministrative Agent for the benefit of the Lenders all additional interestwhich would have accrued if the original Compliance Certificate had beencorrect, as shown on an invoice to be prepared by the Administrative Agent anddelivered to Borrower, on the next Payment Date following delivery of suchinvoice.

"Article" means an article ofthis Agreement unless another document is specifically referenced.

"Authorized Officer" means anyof the President and Chief Executive Officer, Vice President and GeneralCounsel, and  Vice President and Chief Financial Officer, of Borrower, actingsingly.

"Borrower" means AssociatedEstates Realty Corporation, a corporation organized under the laws of the Stateof Ohio, and its successors and assigns.

"Borrowing Date" means a date onwhich an Advance is made hereunder.

"Borrowing Notice" is defined inSection 2.10.

"Business Day" means (i) withrespect to any borrowing, payment or rate selection of LIBOR Rate Advances, aday (other than a Saturday or Sunday) on which banks generally are open inCleveland, Ohio and New York, New York for the conduct of substantially all oftheir commercial lending activities and on which dealings in United Statesdollars are carried on in the London interbank market and (ii) for all otherpurposes, a day (other than a Saturday or Sunday) on which banks generally areopen in Cleveland, Ohio and New York, New York for the conduct of substantiallyall of their commercial lending activities.

"Capital Stock" means any andall shares, interests, participations or other equivalents (however designated)of capital stock of a corporation, any and all equivalent ownership interestsin a Person which is not a corporation and any and all warrants or options topurchase any of the foregoing.

"Capitalization Rate" means (i)seven and three quarters percent (7.75%) or (ii) with respect to QualifyingUnencumbered Projects which are also Affordable Housing Projects in thecalculation of Unencumbered Real Property Value, ten percent (10%).

"Capitalized Lease" of a Personmeans any lease of Property imposing obligations on such Person, as lesseethereunder, which are required in accordance with GAAP to be capitalized on abalance sheet of such Person.

"Capitalized Lease Obligations"of a Person means the amount of the obligations of such Person underCapitalized Leases which would be shown as a liability on a balance sheet ofsuch Person prepared in accordance with GAAP.

"CashEquivalents"  means, as of any date:

(i)         securities issued or directly and fullyguaranteed or insured by the United States Government or any agency orinstrumentality thereof having maturities of not more than one year from suchdate;

(ii)        mutual funds organized underthe United States Investment Company Act rated AAm or AAm-G by S&P and P-1by Moody's;

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(iii)       certificates of deposit orother interest-bearing obligations of a bank or trust company which is a memberin good standing of the Federal Reserve System having a short term unsecureddebt rating of not less than A-1 by S&P and not less than P-1 by Moody's(or in each case, if no bank or trust company is so rated, the highestcomparable rating then given to any bank or trust company, but in such caseonly for funds invested overnight or over a weekend) provided that suchinvestments shall mature or be redeemable upon the option of the holdersthereof on or prior to a date one month from the date of their purchase;

(iv)       certificates of deposit orother interest-bearing obligations of a bank or trust company which is a memberin good standing of the Federal Reserve System having a short term unsecureddebt rating of not less than A-1+ by S&P, and not less than P-1 by Moody'sand which has a long term unsecured debt rating of not less than A1 by Moody's(or in each case, if no bank or trust company is so rated, the highestcomparable rating then given to any bank or trust company, but in such caseonly for funds invested overnight or over a weekend) provided that suchinvestments shall mature or be redeemable upon the option of the holdersthereof on or prior to a date three months from the date of their purchase;

(v)        bonds or other obligationshaving a short term unsecured debt rating of not less than A-1+ by S&P andP-1+ by Moody's and having a long term debt rating of not less than A1 byMoody's issued by or by authority of any state of the United States, anyterritory or possession of the United States, including the Commonwealth ofPuerto Rico and agencies thereof, or any political subdivision of any of theforegoing;

(vi)       repurchase agreements issued byan entity rated not less than A-1+ by S&P, and not less than P-1 by Moody'swhich are secured by U.S. Government securities of the type described inclause (i) of this definition maturing on or prior to a date one monthfrom the date the repurchase agreement is entered into;

(vii)      short term promissory notesrated not less than A-1+ by S&P, and  not less than P-1 by Moody's maturingor to be redeemable upon the option of the holders thereof on or prior to adate one month from the date of their purchase; and

(viii)      commercial paper (havingoriginal maturities of not more than 365 days) rated at least A-1+ by S&Pand P-1 by Moody's and issued by a foreign or domestic issuer who, at the timeof the investment, has outstanding long-term unsecured debt obligations rated atleast A1 by Moody's.

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"Change in Control" meansthe occurrence of any of the following:  (i) the Board of Directors orshareholders of Borrower approve a consolidation or merger in which Borrower isnot the surviving corporation, the sale of all or substantially all of theassets of Borrower, or the liquidation or dissolution of Borrower; (ii) anyPerson or group of Persons which are Affiliates of each other (other thanBorrower or another member of the Consolidated Group or a Single Employer Plan(including any trustee of such a Single Employer Plan acting in its capacity astrustee)) purchases any Capital Stock of Borrower (or securities convertibleinto Capital Stock) pursuant to a tender or exchange offer without the priorconsent of the Board of Directors of Borrower, or becomes the beneficialowner of Capital Stock of Borrower (or securities convertible into CapitalStock), in either case, representing 51%  or more of the votingpower of Borrower's outstanding Capital Stock. 

"Code" means the InternalRevenue Code of 1986, as amended, reformed or otherwise modified from time totime.

"Commitment" means, for each Lender, the obligation ofsuch Lender to make Loans not exceeding the amount set forth opposite itssignature below or as set forth in any Notice of Assignment relating to anyassignment that has become effective pursuant to Section 13.3.2, assuch amount may be modified from time to time pursuant to the terms hereof.

"Commitment Fee" is defined in Section 2.4.

"Compliance Certificate" is defined in Section 7.1(c).

"Consolidated Adjusted EBITDA" shallmean, as of the date of calculation, (a) an annualized amount determined bytaking the Consolidated Net Income for the twelve (12) most recent months forwhich financial results have been reported, as adjusted by adding or deductingfor, as applicable, Defeasance Costs, gains or losses from sales of assets,impairment and other non-cash charges, other extraordinary items, interestexpense, income taxes, depreciation expense and amortization expense, plus (b)the Consolidated Group percentage of the net income (or loss) for such periodof the Investment Affiliates as determined in accordance with GAAP and asadjusted in the same manner as Consolidated Net Income under clause (a) of thissentence.

"Consolidated Debt Service"means, for any period, without duplication, (a) Consolidated InterestExpense for such period plus (b) the aggregate amount of scheduledprincipal payments attributable to Consolidated Outstanding Indebtedness(excluding optional prepayments and balloon principal payments at maturity inrespect of any such Indebtedness) required to be made during such period by anymember of the Consolidated Group plus (c) a percentage of all suchscheduled principal payments required to be made during such period by anyInvestment Affiliate on Indebtedness taken into account in calculatingConsolidated Interest Expense, equal to the greater of (x) the percentageof the principal amount of such Indebtedness for which any member of theConsolidated Group is liable and (y) the Consolidated Group Pro Rata Shareof such Investment Affiliate.

"Consolidated Fixed Charges" shall mean, for any periodwithout duplication, the sum of (i) Consolidated Debt Service for such period,plus (ii) all Preferred Dividends payable by Borrower or any other member ofthe Consolidated Group with respect to such period.  

"Consolidated Group" shall meanthe Borrower and all Subsidiaries which are consolidated with them forfinancial reporting purposes under GAAP.

"Consolidated Group Pro RataShare" shall mean, with respect to any Investment Affiliate, the percentage ofthe total equity ownership interests held by the Consolidated Group, in theaggregate, in such Investment Affiliate determined by calculating thepercentage of the issued and outstanding stock, partnership interests ormembership interests in such Investment Affiliate held by the ConsolidatedGroup in the aggregate.

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"Consolidated Interest Expense"means, for any period without duplication, the sum of (a) the amount ofinterest expense, determined in accordance with GAAP, of the Consolidated Groupfor such period attributable to Consolidated Outstanding Indebtedness duringsuch period, excluding any interest expense on the Consolidated Group's SecuredIndebtedness attributable to Defeasance Costs which have been added back toConsolidated Adjusted EBITDA pursuant to the definition thereof, plus(b) the applicable Consolidated Group Pro Rata Share of any such interestexpense, determined in accordance with GAAP, of each Investment Affiliate, forsuch period, on Indebtedness of such Investment Affiliate, whether recourse ornon-recourse, similarly excluding any interest expense attributable toDefeasance Costs of such Investment Affiliate which has been added back to netincome of such Investment Affiliate in calculating Consolidated AdjustedEBITDA.

"Consolidated Net Income" means,for any period, consolidated net income (or loss) of the Consolidated Group forsuch period determined on a consolidated basis in accordance with GAAP.

"Consolidated OutstandingIndebtedness" means, as of any date of determination, without duplication, thesum of (a) all Indebtedness of the Consolidated Group outstanding at suchdate, determined on a consolidated basis in accordance with GAAP (whetherrecourse or non-recourse) plus (b) the applicable ConsolidatedGroup Pro Rata Share of any Indebtedness of each Investment Affiliate otherthan Indebtedness of such Investment Affiliate to a member of the ConsolidatedGroup.

"Consolidated Tangible Net Worth" shall mean Net Worth(Common and Preferred Stock, plus Paid-In-Capital and Retained Earnings) plusAccumulated Depreciation as defined in accordance with GAAP. 

"Consolidated UnsecuredIndebtedness" means, as of any date of determination, that portion ofConsolidated Outstanding Indebtedness that is not Secured Indebtedness orSubordinated Debt.

"Controlled Group" means allmembers of a controlled group of corporations and all trades or businesses(whether or not incorporated) under common control which, together with theBorrower or any of its Subsidiaries, are treated as a single employer underSection 414 of the Code.

"Conversion/Continuation Notice"is defined in Section 2.11.

"Default" means an eventdescribed in Article VII.

"Defaulting Lender" means anyLender which fails or refuses to perform its obligations under this Agreementwithin the time period specified for performance of such obligation, or, if notime frame is specified, if such failure or refusal continues for a period offive Business Days after written notice from the Administrative Agent; providedthat if such Lender cures such failure or refusal, such Lender shall cease tobe a Defaulting Lender.

"Default Rate" means theinterest rate which may apply during the continuance of a Default pursuant to Section 2.13which shall mean that (i) each LIBOR Rate Advance shall bear interestfor the remainder of the applicable LIBOR Interest Period at the rate otherwiseapplicable to such LIBOR Interest Period plus 3% per annum and (ii) eachFloating Rate Advance shall bear interest at a rate per annum equal to theFloating Rate otherwise applicable to the Floating Rate Advance plus 3% perannum.

"Defeasance Costs" means expensesincurred in the defeasance or prepayment of secured indebtedness including, butnot limited to:  prepaid interest, yield maintenance or other prepaymentpremiums, legal, accounting and consulting fees directly attributable to thedefeasance of debt; the write‐off of deferred financing fees; servicerprocessing fees; custodial account fees; rating agency fees; and the computeddefeasance premium. 

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"Eligible Unencumbered Project" means a Project whichsatisfies all of the following requirements:  (a) such Project is owned in feesimple or leased under a Ground Lease containing provisions allowing leaseholdmortgage financing of such lease on terms reasonably acceptable to Agent(provided that the aggregate amount added to Unencumbered Real Property Valueon account of Projects subject to such Ground Leases shall not exceed twentypercent (20%) entirely by Borrower or a Wholly Owned Subsidiary which is also aSubsidiary Guarantor; (b) with respect to any Project other than the initialQualifying Unencumbered Projects shown on Schedule 3.1, such Project isa "market rate" Project which is not subject to any restrictions requiringapartment units to be leased at below-market rates, (c) neither such Projectnor any interest of the Borrower or any Subsidiary therein, is subject to anyLien (other than Permitted Liens (but not Liens of the type described in clause(v) of the definition of Permitted Liens)) or a Negative Pledge; (d) if suchProperty is owned or leased by a Subsidiary Guarantor (i) none of Borrower'sdirect or indirect ownership interest in such Subsidiary Guarantor is subjectto any Lien (other than Permitted Liens (but not Liens of the type described inclause (v) of the definition of Permitted Liens)) or to a Negative Pledge; and(ii) Borrower directly, or indirectly through a Subsidiary, has the right totake the following actions without the need to obtain the consent of anyPerson:  (x) to sell, transfer or otherwise dispose of such Project and (y) tocreate a Lien on such Project as security for Indebtedness of the Borrower orsuch Subsidiary Guarantor, as applicable; (e) such Project has been completedand is free of all structural defects or major architectural deficiencies,title defects, environmental conditions or other adverse matters except fordefects, deficiencies, conditions or other matters individually or collectivelywhich are not material to the profitable operation of such Project ; and (f) asof the date such Project first becomes an Eligible Unencumbered Project, atleast 75% of the residential units within such Project are subject to third partyoccupancy leases.

"Environmental Laws" includes,but is not limited to, the following statutes, as amended, any successorthereto, and any regulations promulgated pursuant thereto, and any state orlocal statutes, ordinances, rules, regulations and the like addressing similarissues:  the Comprehensive Environmental Response, Compensation and LiabilityAct; the Emergency Planning and Community Right-to-Know Act; the HazardousSubstances Transportation Act; the Resource Conservation and Recovery Act (includingbut not limited to Subtitle I relating to underground storage tanks); the SolidWaste Disposal Act; the Clean Water Act; the Clean Air Act; the ToxicSubstances Control Act; the Safe Drinking Water Act; the Occupational Safetyand Health Act; the Federal Water Pollution Control Act; the FederalInsecticide, Fungicide and Rodenticide Act; the Endangered Species Act; theNational Environmental Policy Act; and the River and Harbors Appropriation Act.

"Equity Issuance" means any issuance by a Person of anyCapital Stock in such Person and shall in any event include the issuance of anyCapital Stock upon the conversion or exchange of any security constitutingIndebtedness that is convertible or exchangeable, or is being converted orexchanged, for Capital Stock.

"ERISA" means the EmployeeRetirement Income Security Act of 1974, as amended from time to time, and anyrule or regulation issued thereunder.

"Excluded Taxes" means, in thecase of each Lender or applicable Lending Installation and the AdministrativeAgent, taxes imposed on its overall net income, and franchise taxes imposed onit, by any jurisdiction with taxing authority over the Lender.

"Facility Letter of Credit" means a Letter of Creditissued pursuant to Section 2.22 of this Agreement.

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"Facility Letter of Credit Fee" is defined in Section2.22(h)(i)(a).

"Facility Letter of Credit Obligations" means, as of anydate, all liabilities, whether actual or contingent, of the Borrower withrespect to Facility Letters of Credit, including the sum of (a) theReimbursement Obligations and (b) the aggregate undrawn face amount of thethen outstanding Facility Letters of Credit.

"Facility Letter of Credit Sublimit" means $20,000,000.

"Facility Termination Date"means April 23, 2010, which shall be the day immediately prior to the third (3rd)anniversary of the Agreement Execution Date, or if such day is not a BusinessDay the last Business Day immediately preceding such day, as such date may beextended pursuant to Section 2.22 hereof.

"Federal Funds Effective Rate"shall mean, for any day, the rate per annum (rounded upward to the nearest oneone-hundredth of one percent (1/100 of 1%)) announced by the Federal ReserveBank of Cleveland on such day as being the weighted average of the rates onovernight federal funds transactions arranged by federal funds brokers on theprevious trading day, as computed and announced by such Federal Reserve Bank insubstantially the same manner as such Federal Reserve Bank computes andannounces the weighted average it refers to as the "Federal Funds EffectiveRate."

"Fee Letter" is defined in Section2.5.

"Financial Contract" of a Personmeans (i) any exchange - traded or over-the-counter futures, forward, swap oroption contract or other financial instrument with similar characteristics, or(ii) any Rate Management Transaction.

"Financial Undertaking" of aPerson means (i) any transaction which is the functional equivalent of ortakes the place of borrowing but which does not constitute a liability on theconsolidated balance sheet of such Person, or (ii) any agreements, devicesor arrangements designed to protect at least one of the parties thereto fromthe fluctuations of interest rates, exchange rates or forward rates applicableto such party's assets, liabilities or exchange transactions, including, butnot limited to, interest rate exchange agreements, forward currency exchangeagreements, interest rate cap or collar protection agreements, forward ratecurrency or interest rate options.

"First Mortgage Receivable"means any Indebtedness owing to a member of the Consolidated Group which issecured by a first-priority mortgage or deed of trust on a Project having avalue in excess of the amount of such Indebtedness and which has beendesignated by the Borrower as a "First Mortgage Receivable" in its most recentcompliance certificate.

"Floating Rate" means, for anyday, a rate per annum equal to (i) the Alternate Base Rate for such day plus(ii) the ABR Applicable Margin for such day, in each case changing whenand as the Alternate Base Rate and ABR Applicable Margin changes.

"Floating Rate Advance" means anAdvance which bears interest at the Floating Rate.

"Floating Rate Loan" means aLoan which bears interest at the Floating Rate.

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"Funds From Operations" shallhave the meaning determined from time to time by the National Association ofReal Estate Investment Trusts to be the meaning most commonly used by itsmembers and for avoidance of doubt shall mean "basic" Funds From Operations, assuch term is customarily used by members of such association.

"GAAP" means generally acceptedaccounting principles in the United States of America as in effect from time totime, applied in a manner consistent with that used in preparing the financialstatements referred to in Section 7.1.

"Governmental Authority" meansany nation or government, any state or other political subdivision thereof andany entity exercising executive, legislative, judicial, regulatory oradministrative functions of or pertaining to government.

"Guarantee Obligation" means, asto any Person (the "guaranteeing person"), any obligation (determinedwithout duplication) of (a) the guaranteeing person or (b) anotherPerson to induce the creation of which the guaranteeing person has issued areimbursement, counter-indemnity or similar obligation, in either caseguaranteeing or in effect guaranteeing any Indebtedness, leases, or dividends(the "primary obligations") of any other third Person (the "primaryobligor") in any manner, whether directly or indirectly, including, withoutlimitation, any obligation of the guaranteeing person, whether or notcontingent, (i) to purchase any such primary obligation or any propertyconstituting direct or indirect security therefor, (ii) to advance orsupply funds (1) for the purchase or payment of any such primaryobligation or (2) to maintain working capital or equity capital of theprimary obligor or otherwise to maintain the net worth or solvency of theprimary obligor, (iii) to purchase property, securities or servicesprimarily for the purpose of assuring the owner of any such primary obligationof the ability of the primary obligor to make payment of such primaryobligation or (iv) otherwise to assure or hold harmless the owner of anysuch primary obligation against loss in respect thereof; provided, however,that the term Guarantee Obligation shall not include endorsements ofinstruments for deposit or collection in the ordinary course of business, orany indemnification obligations arising in the ordinary course of business,including without limitation guaranties of non-recourse "carve-out" exceptionsin secured loans and environmental indemnity agreements in favor of securedlenders.  The amount of any Guarantee Obligation of any guaranteeing personshall be deemed to be the maximum stated amount of the primary obligationrelating to such Guarantee Obligation (or, if less, the maximum statedliability set forth in the instrument embodying such Guarantee Obligation), provided,that in the absence of any such stated amount or stated liability, the amountof such Guarantee Obligation shall be such guaranteeing person's maximumreasonably anticipated liability in respect thereof as determined by theBorrower in good faith.

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"Indebtedness" of any Person atany date means without duplication, (a) all indebtedness of such Personfor borrowed money including without limitation any repurchase obligation orliability of such Person with respect to securities, accounts or notesreceivable sold by such Person, (b) all obligations of such Person for thedeferred purchase price of property or services (other than current accountspayable and trade liabilities incurred in the ordinary course of business andpayable in accordance with customary practices), to the extent such obligationsconstitute indebtedness for the purposes of GAAP, (c) any otherindebtedness of such Person which is evidenced by a note, bond, debenture orsimilar instrument, including any so-called "trust deferred debt" (d) allCapitalized Lease Obligations, (e) all obligations of such Person in respect ofacceptances issued or created for the account of such Person, (f) allGuarantee Obligations of such Person (excluding in any calculation ofconsolidated Indebtedness of the Consolidated Group, Guarantee Obligations ofone member of the Consolidated Group in respect of primary obligations of anyother member of the Consolidated Group), (g) all reimbursement obligations ofsuch Person for letters of credit and, to the extent such obligationsconstitute "contingent liabilities" which are required to be accrued underGAAP, other contingent liabilities, (h) any Net Mark-to-Market Exposureand (i) all liabilities secured by any lien (other than liens for taxes not yetdue and payable) on any property owned by such Person even though such Person hasnot assumed or otherwise become liable for the payment thereof.

"Interest Period" means a LIBORInterest Period.

"Investment" of a Person meansany loan, advance (other than commission, travel and similar advances toofficers and employees made in the ordinary course of business), extension ofcredit (other than accounts receivable arising in the ordinary course ofbusiness on terms customary in the trade), deposit account or contribution ofcapital by such Person to any other Person or any investment in, or purchase orother acquisition of, the stock, partnership interests, notes, debentures orother securities of any other Person made by such Person.

"Investment Affiliate" means anyPerson in which the Consolidated Group, directly or indirectly, has anyownership interest, whose financial results are not consolidated under GAAPwith the financial results of the Consolidated Group.

"Issuance Date" is definedin Section 2.22.

"Issuance Notice" isdefined in Section 2.22.

"Issuing Bank" means, withrespect to each Facility Letter of Credit, the Lender which issues suchFacility Letter of Credit.  National City Bank shall be the sole Issuing Bank.

"Lenders" means the lendinginstitutions listed on the signature pages of this Agreement, their respectivesuccessors and assigns, any other lending institutions that subsequently becomeparties to this Agreement.

"Lending Installation" means,with respect to a Lender, any office, branch, subsidiary or affiliate of suchLender, which would not result in Borrower incurring an obligation to makedeductions for Taxes under Section 4.5(a).

"Letter of Credit" of a Person means a letter of credit orsimilar instrument which is issued upon the application of such Person or uponwhich such Person is an account party or for which such Person is in any wayliable.

"Letter of Credit Collateral Account" is defined inSection2.22.

"Letter of Credit Request" is defined inSection 2.22.

"LIBOR Applicable Margin" meansas of any date, with respect to the determination of the LIBOR Rate, thepercentage in effect on such date under the definition of "Applicable Margin".

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"LIBOR Base Rate" means, therate (rounded upwards to the nearest 1/16th) with respect to a LIBORRate Advance for the relevant LIBOR Interest Period, the applicable BritishBankers' Association LIBOR rate for deposits in U.S. dollars as reportedby any generally recognized financial information service as of 11:00 a.m.(London time) two Business Days prior to the first day of such LIBOR InterestPeriod, and having a maturity equal to such LIBOR Interest Period, *provided*that,if no such British Bankers' Association LIBOR rate is available to theAdministrative Agent, the applicable LIBOR Base Rate for the relevant LIBORInterest Period shall instead be the rate determined by the AdministrativeAgent to be the rate at which National City Bank or one of its Affiliate banksoffers to place deposits in U.S. dollars with first-class banks in the Londoninterbank market at approximately 11:00 a.m. (London time) two BusinessDays prior to the first day of such LIBOR Interest Period, in the approximateamount of Administrative Agent's relevant LIBOR Rate Loan and having a maturityequal to such LIBOR Interest Period.

"LIBOR Flex Rate" means,with respect to any Swingline Loan for any day, the fluctuating LIBOR Base Ratethat would be applicable to an amount similar to the principal amount of suchSwingline Loan for a LIBOR Interest Period of one month, with each daily changein such LIBOR Base Rate automatically, immediately, and without notice changingthe LIBOR Flex Rate thereafter applicable hereunder plus the LIBORApplicable Margin for such day.  The LIBOR Flex Rate shall be adjusted bythe Administrative Agent, if necessary, at the end of each Business Day duringthe term hereof.  The Administrative Agent shall not be required to notifyBorrower of any adjustment in the LIBOR Flex Rate; however, Borrower mayrequest a quote of the prevailing LIBOR Flex Rate on any Business Day.

"LIBOR Interest Period" means,with respect to each amount bearing interest at a LIBOR based rate, a period ofone, two, three or six months, to the extent deposits with such maturities areavailable to the Lenders, commencing on a Business Day, as selected by theBorrower; provided, however, that any LIBOR Interest Period which begins on aday for which there is no numerically corresponding date in the calendar monthin which such LIBOR Interest Period would otherwise end shall instead end onthe last Business Day of such calendar month.  

"LIBOR Rate" means, for anyLIBOR Interest Period, the sum of (A) the LIBOR Base Rate applicable theretodivided by one minus the then-current Reserve Requirement and (B) the LIBORApplicable Margin.

"LIBOR Rate Advance" means anAdvance which bears interest at a LIBOR Rate.

"LIBOR Rate Loan" means a Loanwhich bears interest at a LIBOR Rate.

"Lien" means any lien (statutoryor other), mortgage, pledge, negative pledge, hypothecation, assignment,deposit arrangement, encumbrance or priority or other security agreement or preferentialarrangement of any kind or nature whatsoever (including, without limitation,the interest of a vendor or lessor under any conditional sale, CapitalizedLease or other title retention agreement).

"Loan" means, with respect to aLender, such Lender's portion of any Advance.

"Loan Documents" means thisAgreement, the Notes, the Subsidiary Guaranty, and any other document from timeto time evidencing or securing indebtedness incurred by the Borrower under thisAgreement, as any of the foregoing may be amended or modified from time totime.

"Loan Parties" means theBorrower and the Subsidiary Guarantors.

"Material Adverse Effect" means,in the Administrative Agent's reasonable discretion, any event that isreasonably anticipated to have a material adverse effect on (i) the business,property or condition (financial or otherwise) of the Consolidated Group (takenas a whole), (ii) the ability of the Borrower to perform its obligations underthe Loan Documents, or (iii) the validity or enforceability of any of the LoanDocuments.

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"Materials of EnvironmentalConcern" means any gasoline or petroleum (including crude oil or any fractionthereof) or petroleum products or any hazardous or toxic substances, materialsor wastes, defined or regulated as such in or under any Environmental Law,including, without limitation, asbestos, polychlorinated biphenyls andurea-formaldehyde insulation, but excluding substances of kinds and amountsordinarily used or stored in similar properties for the purposes of cleaning orother maintenance or operations or as inventory of tenants and otherwise incompliance with all Environmental Laws.

"Maximum Legal Rate" means themaximum nonusurious interest rate, if any, that at any time or from time totime may be contracted for, taken, reserved, charged or received on theindebtedness evidenced by the Notes and as provided for herein or in the Notesor other Loan Documents, under the laws of such state or states whose laws areheld by any court of competent jurisdiction to govern the interest rateprovisions hereof.

"Moody's" means Moody'sInvestors Service, Inc. and its successors.

"Multiemployer Plan" means aPlan maintained pursuant to a collective bargaining agreement or any otherarrangement to which the Borrower or any member of the Controlled Group is aparty to which more than one employer is obligated to make contributions.

"Net Mark-to-Market Exposure" ofa Person means, as of any date of determination, the excess (if any) of allunrealized losses over all unrealized profits of such Person arising from RateManagement Transactions or any other Financial Contract.  "Unrealized losses"means the fair market value of the cost to such Person of replacing such RateManagement Transaction or other Financial Contract as of the date ofdetermination (assuming the Rate Management Transaction or other FinancialContract were to be terminated as of that date), and "unrealized profits" meansthe fair market value of the gain to such Person of replacing such RateManagement Transaction or other Financial Contract as of the date ofdetermination (assuming such Rate Management Transaction or other FinancialContract were to be terminated as of that date).

"Net Operating Income" means,with respect to any Project for any period, "property rental and other income"(as determined by GAAP) attributable to such Project accruing for such period minusthe amount of all expenses (as determined in accordance with GAAP) incurred inconnection with and directly attributable to the ownership and operation ofsuch Project for such period, including, without limitation, Management Feesand amounts accrued for the payment of real estate taxes and insurancepremiums, but excluding any general and administrative expenses related to theoperation of the Borrower or the other members of the Consolidated Group, anyinterest expense or other debt service charges and any non-cash charges such asdepreciation or amortization of financing costs.  As used herein "ManagementFees", means, with respect to each Project for any period, an amount equalto two and one-half percent (2.5%) per annum on the aggregate rent due andpayable under leases at such Project.

"Net Proceeds" means withrespect to any Equity Issuance by a Person, the aggregate amount of all cashand the fair market value of all other Property (other than securities of suchPerson being converted or exchanged in connection with such Equity Issuance)received by such Person in respect of such Equity Issuance net of investmentbanking fees, legal fees, accountants' fees, underwriting discounts andcommissions and other customary fees and expenses actually incurred by suchPerson in connection with such Equity Issuance.

"Non-U.S. Lender" is defined in Section4.5(d).

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"Non-Recourse Indebtedness"means, with respect to any Person, Secured Indebtedness for which the liabilityof such Person (except with respect to fraud, Environmental Lawsliability, bankruptcy and other customary non-recourse "carve-out" exceptions)either is contractually limited to collateral securing such Indebtedness or isso limited by operation of law.

"Note" means a promissory note,in substantially the form of Exhibit A hereto, duly executed by Borrowerand payable to the order of a Lender in the amount of its Commitment, includingany amendment, modification, renewal or replacement of such promissory note.

"Notice of Assignment" isdefined in Section 13.3.2.

"Obligations" means theAdvances, the Reimbursement Obligations and all accrued and unpaid fees and allother obligations of Borrower to the Administrative Agent or the Lendersarising under this Agreement or any of the other Loan Documents.

"Other Taxes" is defined in Section4.5(b).

"Participants" is defined in Section13.2.1.

"Payment Date" means, (i) withrespect to the payment of interest accrued on any LIBOR Rate Advance orSwingline Advance, the first Business Day of each calendar month or (ii) withrespect to the payment of interest accrued on any Floating Rate Advance, thefirst Business Day of each April, July, October and January.

"PBGC" means the Pension BenefitGuaranty Corporation, or any successor thereto.

"Percentage" means for eachLender the ratio that such Lender's Commitment bears to the AggregateCommitment, expressed as a percentage.

"Permitted Acquisitions" aredefined in Section 7.15.

"Permitted Liens" are defined inSection 7.16.

"Person" means any naturalperson, corporation, firm, joint venture, partnership, association, enterprise,trust or other entity or organization, or any government or politicalsubdivision or any agency, department or instrumentality thereof.

"Plan" means an employee pensionbenefit plan which is covered by Title IV of ERISA or subject to the minimumfunding standards under Section 412 of the Code as to which the Borrower or anymember of the Controlled Group may have any liability.

"Preferred Dividends" means,with respect to any entity, dividends or other distributions which are payableto holders of any ownership interests in such entity which entitle the holdersof such ownership interests to be paid on a preferred basis prior to dividendsor other distributions to the holders of other types of ownership interests insuch entity, provided that "Preferred Dividends" shall not mean any preferredequity in any joint venture relationship between the Borrower or any subsidiaryof the Borrower and any Person other than a shareholder in the Borrower.

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"Prime Rate" means a rate perannum equal to the prime rate of interest publicly announced from time to timeby Administrative Agent or its parent as its prime rate (which is notnecessarily the lowest rate charged to any customer), changing when and as saidprime rate changes.  In the event that there is a successor to theAdministrative Agent by merger, or the Administrative Agent assigns its dutiesand obligations to an Affiliate, then the term "Prime Rate" as used in thisAgreement shall mean the prime rate, base rate or other analogous rate of thenew Administrative Agent.

"Project" means any real estateasset owned by the Borrower or any of its Subsidiaries or any InvestmentAffiliate, and operated or intended to be operated as a multifamily residentialproperty.

"Property" of a Person means anyand all property, whether real, personal, tangible, intangible, or mixed, ofsuch Person, or other assets owned, leased or operated by such Person.

"Purchasers" is defined in Section13.3.1.

"Qualifying UnencumberedProject" means the Projects shown on Schedule 3.1 and any Project whichhas satisfied the requirements set forth in Section 3.1 below.

"Rate Management Transaction" means any transaction(including an agreement with respect thereto) now existing or hereafter enteredinto by the Borrower which is a rate swap, basis swap, forward ratetransaction, commodity swap, commodity option, equity or equity index swap,equity or equity index option, bond option, interest rate option, foreignexchange transaction, cap transaction, floor transaction, collar transaction,forward transaction, currency swap transaction, cross-currency rate swaptransaction, currency option or any other similar transaction (including anyoption with respect to any of these transactions) or any combination thereof,whether linked to one or more interest rates, foreign currencies, commodityprices, equity prices or other financial measures.

"Real Property Under Development" is defined as anyProject which either is under construction or completed and has not yetachieved a leasing level of 85% or more.

"Recourse Indebtedness" meansany Indebtedness of Borrower or any other member of the Consolidated Group withrespect to which the liability of the obligor is not limited to the obligor'sinterest in specified assets securing such Indebtedness, subject to customarylimited exceptions for certain acts or types of liability, and provided furtherthat Non-Recourse Indebtedness shall not be considered Recourse Indebtednesseven if a breach of such customary limited exceptions to recourse liabilitywould result in such Non-Recourse Indebtedness becoming recourse to the obligorthereunder.

"Regulation D" means RegulationD of the Board of Governors of the Federal Reserve System as from time to timein effect and any successor thereto or other regulation or officialinterpretation of said Board of Governors relating to reserve requirementsapplicable to member banks of the Federal Reserve System.

"Regulation U" means RegulationU of the Board of Governors of the Federal Reserve System as from time to timein effect and any successor or other regulation or official interpretation ofsaid Board of Governors relating to the extension of credit by banks for thepurpose of purchasing or carrying margin stocks applicable to member banks ofthe Federal Reserve System.

"Reimbursement Obligations"means at any time, the aggregate of the Obligations of the Borrower to theLenders, the Issuing Bank and the Administrative Agent in respect of allunreimbursed payments or disbursements made by the Lenders, the Issuing Bankand the Administrative Agent under or in respect of the Facility Letters ofCredit.

"Release" is defined in Section3.3. 

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"Reportable Event" means areportable event as defined in Section 4043 of ERISA and the regulations issuedunder such section, with respect to a Plan, excluding, however, such events asto which the PBGC by regulation waived the requirement of Section 4043(a) ofERISA that it be notified within 30 days of the occurrence of such event,provided, however, that a failure to meet the minimum funding standard ofSection 412 of the Code and of Section 302 of ERISA shall be a Reportable Eventregardless of the issuance of any such waiver of the notice requirement inaccordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.

"Required Lenders" means Lendersin the aggregate having at least 67% of the Aggregate Commitment or, if theAggregate Commitment has been terminated, Lenders in the aggregate holding atleast 67% of the aggregate unpaid principal amount of the outstanding Advances.

"Reserve Requirement" means,with respect to a LIBOR Rate Loan and LIBOR Interest Period, that percentage(expressed as a decimal) which is in effect on such day, as prescribed by theFederal Reserve Board or other governmental authority or agency havingjurisdiction with respect thereto for determining the maximum reserves(including, without limitation, basic, supplemental, marginal and emergencyreserves) for eurocurrency funding (currently referred to as "EurocurrencyLiabilities" in Regulation D) maintained by a member bank of the FederalReserve System.

"Section" means a numberedsection of this Agreement, unless another document is specifically referenced.

"Secured Indebtedness" means anyIndebtedness which is secured by a Lien on a Project, any ownership interestsin any Person or any other assets which had, in the aggregate, a value inexcess of the amount of such Indebtedness at the time such Indebtedness wasincurred.

"Single Employer Plan" means aPlan maintained by the Borrower or any member of the Controlled Group foremployees of the Borrower or any member of the Controlled Group.

"S&P" means Standard &Poor's Ratings Group and its successors.

"Subordinated Debt" means (i)any Indebtedness of Borrower or any other member of the Consolidated Group thatis subordinated by its express terms to the repayment of the Obligations underthis Facility; and (ii) any Indebtedness of Borrower or any Subsidiary ofBorrower due to any Affiliate of Borrower that is expressly subordinate inpriority and payment to the Obligations under this Facility.

"Subsidiary" of a Person means(i) any corporation more than 50% of the outstanding securities having ordinaryvoting power of which shall at the time be owned or controlled, directly orindirectly, by such Person or by one or more of its Subsidiaries or by suchPerson and one or more of its Subsidiaries, or (ii) any partnership,association, joint venture or similar business organization more than 50% ofthe ownership interests having ordinary voting power of which shall at the timebe so owned or controlled.  Unless otherwise expressly provided, all referencesherein to a "Subsidiary" shall mean a Subsidiary of Borrower.

"Subsidiary Guarantor" means, asof any date, each Wholly-Owned Subsidiary of Borrower which is then a party tothe Subsidiary Guaranty pursuant to Section 6.20.  

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"Subsidiary Guaranty" means theguaranty to be executed and delivered by those Subsidiaries of the Borrowerlisted on Schedule 6.21, substantially in the form of Exhibit D, as thesame may be amended, supplemented or otherwise modified from time to timepursuant to Section 6.21, including any joinders executed by additionalSubsidiary Guarantors. 

"Substantial Portion" means,with respect to the Property of the Borrower and its Subsidiaries, Propertywhich represents more than 10% of then-current Total Asset Value.

"Swingline Advances" means, as of any date, collectively,all Swingline Loans then outstanding under this Facility.

"Swingline Commitment" means the obligation of theSwingline Lender to make Swingline Loans not exceeding $10,000,000, which isincluded in, and is not in addition to, the Swingline Lender's total Commitmenthereunder.

"Swingline Lender" shall mean National City Bank, in itscapacity as a Lender.

"Swingline Loan" means a loan made by the Swingline Lenderpursuant to Section 2.21 hereof.

"Taxes" means any and allpresent or future taxes, duties, levies, imposts, deductions, charges orwithholdings, and any and all liabilities with respect to the foregoing, butexcluding Excluded Taxes and Other Taxes.

"Total Asset Value" means, as ofany date, (i) the Net Operating Income for the most recent four (4)consecutive fiscal quarters of the Borrower for which financial results havebeen reported attributable to Projects then owned or leased by Borrower or anyother member of the Consolidated Group (excluding 100% of the Net OperatingIncome attributable to Projects which have not been so owned or leased for four(4) full fiscal quarters as of the end of the most recent fiscal quarter forwhich financial results have been reported) divided by the Capitalization Rate,plus (ii) 100% of cost for any such Projects first acquired or leased duringsuch four (4) fiscal quarter period (including the amount of any assumedIndebtedness secured thereby), plus (iii) theConsolidated Group Pro Rata Share of Net Operating Income attributable toProjects then owned or leased by an Investment Affiliate for the most recentfour (4) consecutive fiscal quarters of the Borrower for which financialresults have been reported (excluding Net Operating Income attributable to anysuch Projects which have not been so owned or leased for four (4) fiscal quarters as of the end of such most recent fiscalquarter for which financial results have been reported) divided by theCapitalization Rate, plus (iv) the Consolidated Group Pro Rata Share of 100%of cost for any such Projects first acquired or leased by an InvestmentAffiliate during such four (4) fiscal quarter period (including the amount ofany assumed Indebtedness secured thereby); (v) cashand Cash Equivalents owned by Borrower or any other member of the ConsolidatedGroup as of the end of the most recent fiscal quarter for which financialresults have been reported, plus (vi) the Consolidated Group Pro Rata Share ofall cash and Cash Equivalents owned by Investment Affiliates as of the end ofthe most recent fiscal quarter financial results have been reported plus (vii)Real Property Under Development and Undeveloped Land of the Consolidated Group,valued at cost, plus (viii) the Consolidated Group Pro Rata Share of any RealProperty Under Development and Undeveloped Land of Investment Affiliates,valued at cost, plus (ix) First Mortgage Receivables owned by the ConsolidatedGroup, valued in accordance with GAAP, plus (x) the Consolidated Group Pro RataShare of First Mortgage Receivables owned by any Investment Affiliates, valuedin accordance with GAAP.

"Transferee" is defined in Section13.4.

"Type" means, with respect toany Advance, its nature as a Floating Rate Advance, a LIBOR Rate Advance or aSwingline Advance.

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"Undeveloped Land" means, as of any date, any undeveloped land owned from time to time by the Borrower orany other member of the Consolidated Group.

**"**Unencumbered Real Property Value" shall mean, asof any date, (i) Unencumbered Real Property Adjusted NOI divided by the CapitalizationRate applicable thereto plus (ii) the cost of all Qualifying UnencumberedProjects which have not been owned or leased by Borrower or a Wholly-OwnedSubsidiary for four (4) consecutive full fiscal quarters as of the end of themost recent fiscal quarter of Borrower for which financial results have beenreported, with the cost of each such Qualifying Unencumbered Project being theamount capitalized as "real estate" on Borrower's balance sheet plus anyportion of the acquisition cost required to be allocated as an intangible assetby GAAP.  

"Unencumbered Real Property Adjusted NOI" shall mean, asof any date, (i) the Net Operating Income for the most recent four (4)consecutive fiscal quarters of Borrower for which financial results have beenreported attributable to Qualifying Unencumbered Projects then owned or leasedby Borrower or a Subsidiary Guarantor (excluding Qualifying UnencumberedProjects which have not been so owned or leased for four (4) full fiscalquarters as of the end of the most recent fiscal quarter of Borrower for whichfinancial results have been reported less (ii) management fees equal to2.5% of the aggregate gross revenues attributable to such QualifyingUnencumbered Projects for such period less (iii) a capital expenditure reserveequal to $150 per unit for all such Qualifying Unencumbered Projects.

"Unfunded Liabilities" means theamount (if any) by which the present value of all vested nonforfeitablebenefits under all Single Employer Plans exceeds the fair market value of allsuch Plan assets allocable to such benefits, all determined as of the then mostrecent valuation date for such Plans.

"Unmatured Default" means anevent which but for the lapse of time or the giving of notice, or both, wouldconstitute a Default.

"Wholly-Owned Subsidiary" of aPerson means (i) any Subsidiary all of the outstanding voting securities ofwhich shall at the time be owned or controlled, directly or indirectly, by suchPerson or one or more Wholly-Owned Subsidiaries of such Person, or by suchPerson and one or more Wholly-Owned Subsidiaries of such Person, or (ii) anypartnership, association, joint venture or similar business organization 100%of the ownership interests having ordinary voting power of which shall at thetime be so owned or controlled.

Theforegoing definitions shall be equally applicable to both the singular andplural forms of the defined terms.

### ARTICLEIITHE CREDIT

### 2.1              Generally

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.  Subject to theterms and conditions of this Agreement, Lenders severally agree to makeAdvances through the Administrative Agent to Borrower from time to time priorto the Facility Termination Date, providedthat the making of anysuch Advance will not cause the then‐current Allocated Facility Amount toexceed the then-current Aggregate Commitment.  Each Lender shall fund itsPercentage of each such Advance and no Lender will be required to fund anyamounts which, when aggregated with such Lender's Percentage of all otherAdvances then outstanding, would exceed such Lender's then-current Commitment. This facility ("Facility") is a revolving credit facility and, subjectto the provisions of this Agreement, Borrower may request Advances hereunder,repay such Advances and reborrow Advances at any time prior to the FacilityTermination Date.

### 2.2              Ratable Advances

.  Each Advancehereunder shall consist of Loans made from the several Lenders ratably inproportion to the ratio their respective Commitments bear to the AggregateCommitment.  The ratable Advances may be Floating Rate Advances, LIBOR RateAdvances or a combination thereof, selected by Borrower in accordance with Sections2.10 and 2.11.

### 2.3              Final Principal Payment

.  Any outstandingAdvances and all other unpaid Obligations shall be paid in full by Borrower onthe Facility Termination Date.

### 2.4              Commitment Fee

.  Borrower agrees topay to the Lenders a fee on the unused portion of the Aggregate Commitment (the"Commitment Fee") equal to 25 basis points per annum if such unusedportion exceeds 50% or 15 basis points per annum if such unused portion is 50%or less of the Aggregate Commitment.  The Commitment Fee shall be calculated onthe amount by which the weighted average Aggregate Commitment for any fiscalquarter exceeds the weighted average Allocated Facility Amount for such fiscalquarter and shall  due and payable in arrears on the first Business Day of eachcalendar quarter for the preceding fiscal quarter and on any termination of theAggregate Commitment in its entirety.

### 2.5              Other Fees

.  The Borrower agreesto pay all fees payable to the Administrative Agent pursuant to the Borrower'sletter agreement with the Administrative Agent dated as of April 24, 2007(the "Fee Letter"). 

### 2.6              Usury

.  This Agreement andeach Note are subject to the express condition that at no time shall Borrowerbe obligated or required to pay interest on the principal balance of the Loanat a rate which could subject any Lender to either civil or criminal liabilityas a result of being in excess of the Maximum Legal Rate.  If by the terms ofthis Agreement or the Loan Documents, Borrower is at any time required orobligated to pay interest on the principal balance due hereunder at a rate inexcess of the Maximum Legal Rate, the interest rate or the Default Rate, as thecase may be, shall be deemed to be immediately reduced to the Maximum LegalRate and all previous payments in excess of the Maximum Legal Rate shall bedeemed to have been payments in reduction of principal and not on account ofthe interest due hereunder.  All sums paid or agreed to be paid to Lender forthe use, forbearance, or detention of the sums due under the Loan, shall, tothe extent permitted by applicable law, be amortized, prorated, allocated, andspread throughout the full stated term of the Loan until payment in full sothat the rate or amount of interest on account of the Loan does not exceed theMaximum Legal Rate of interest from time to time in effect and applicable tothe Loan for so long as the Loan is outstanding.

### 2.7              Voluntary Commitment Reductions

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.  Borrower may, atany time upon five (5) days prior written notice to the Agent, elect to reduceor terminate the Aggregate Commitment under this Facility provided that (i)each such reduction shall be in the minimum amount of $5,000,000, (ii) all suchreductions shall reduce each Lender's Commitment and the Swingline Commitmenton a pro rata basis, (iii) any amount by which the Allocated Facility Amountexceeds the reduced Aggregate Commitment shall be paid on the effective dateof, and as a condition to such reduction, and (iv) Borrower shall pay all costsassociated with any related prepayments of LIBOR Rate Advances or due under anyother provisions contained in this Credit Agreement.

### 2.8              Minimum Amount of Each Advance

.  Each LIBOR RateAdvance shall be in an amount not less than $1,000,000 or a whole multiple of$100,000 in excess thereof.  Each Floating Rate Advance and each SwinglineAdvance shall be in the minimum amount of $250,000; provided, however, that,subject to Section 2.1, any Floating Rate Advance or Swingline Advancemay be in the amount of the unused Aggregate Commitment.

### 2.9              Optional Prepayments

.  The Borrower may,upon at least one (1) Business Day's notice to the Administrative Agent, in thecase of all Advances other than Swingline Advances, prepay the Advances, whichnotice shall specify the date and amount of prepayment and whether theprepayment is of LIBOR Rate Advances, Floating Rate Advances, or a combinationthereof, and if a combination thereof, the amount allocable to each; provided,however, that (i) any partial prepayment under this Subsection shall be in anamount not less than $1,000,000 or a whole multiple of $100,000 in excessthereof and; (ii) any LIBOR Rate Advance prepaid on any day other than the lastday of the applicable LIBOR Interest Period must be accompanied by any amountspayable pursuant to Section 4.4.  Upon receipt of any such notice theAdministrative Agent shall promptly notify each Lender thereof.  If any suchnotice is given, the amount specified in such notice shall be due and payableon the date specified therein, together with any amounts payable pursuant to Section4.4.

### 2.10           Method of Selecting Types andInterest Periods for New Advances

.  The Borrower shallselect the Type of Advance and, in the case of each LIBOR Rate Advance, theInterest Period applicable to each Advance from time to time.  The Borrowershall give the Administrative Agent irrevocable notice (a "Borrowing Notice")in the form attached as Exhibit F hereto (i) not later than 2:00p.m. Cleveland time on the Business Day immediately preceding the BorrowingDate of each Floating Rate Advance, (ii) not later than noon Cleveland time, at least three (3) Business Days before the Borrowing Date for each LIBOR RateAdvance, and (iii) not later than 2:00 p.m. Cleveland time, on the BorrowingDate for each Swingline Advance, of:

### (i)                 the Borrowing Date, which shall bea Business Day, of such Advance,

### (ii)               the aggregate amount of suchAdvance,

### (iii)              the Type of Advance selected, and

### (iv)             in the case of each LIBOR RateAdvance, the LIBOR Interest Period applicable thereto.

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Each Lender shall make availableits Loan or Loans, in funds immediately available in Cleveland to theAdministrative Agent at its address specified pursuant to Article XIVon each Borrowing Date not later than (i) 11:00 a.m. (Cleveland time), inthe case of Floating Rate Advances which have been requested by a BorrowingNotice given to the Administrative Agent not later than 2:00 p.m.(Cleveland time) on the Business Day immediately preceding such Borrowing Dateor (ii) noon (Cleveland time) in the case of all other ratable Advances or(iii) 4:00 p.m. (Cleveland time) in the case of Swingline Advances.  TheAdministrative Agent will make the funds so received from the Lenders availableto the Borrower at the Administrative Agent's aforesaid address.

No Interest Period may end afterthe Facility Termination Date and, unless the Lenders otherwise agree inwriting, in no event may there be more than six (6) different Interest Periodsfor LIBOR Rate Advances outstanding at any one time (or more than five (5)different Interest Periods at any time that a Floating Rate Advance is alsooutstanding).

### 2.11           Conversion and Continuation ofOutstanding Advances

.  Floating RateAdvances shall continue as Floating Rate Advances unless and until suchFloating Rate Advances are converted into LIBOR Rate Advances.  Each LIBOR RateAdvance shall continue as a LIBOR Rate Advance until the end of the thenapplicable LIBOR Interest Period therefor, at which time such LIBOR RateAdvance shall be automatically converted into a Floating Rate Advance unlessthe Borrower shall have given the Administrative Agent aConversion/Continuation Notice requesting that, at the end of such LIBORInterest Period, such LIBOR Rate Advance either continue as a LIBOR RateAdvance for the same or another Interest Period or be converted to an Advanceof another Type.  Subject to the terms of Section 2.8, the Borrowermay elect from time to time to convert all or any part of an Advance of anyType into any other Type or Types of Advances; provided that any conversion ofany LIBOR Rate Advance shall be made on, and only on, the last day of theInterest Period applicable thereto.  The Borrower shall give the AdministrativeAgent irrevocable notice (a "Conversion/Continuation Notice") of eachconversion of an Advance to a LIBOR Rate Advance or continuation of a LIBORRate Advance not later than 11:00 a.m. (Cleveland time), at least threeBusiness Days, in the case of a conversion into or continuation of a LIBOR RateAdvance, prior to the date of the requested conversion or continuation, specifying:

### (i)                 the requested date which shall bea Business Day, of such conversion or continuation;

### (ii)               the aggregate amount and Type ofthe Advance which is to be converted or continued; and

### (iii)              the amount and Type(s) ofAdvance(s) into which such Advance is to be converted or continued and, in thecase of a conversion into or continuation of a LIBOR Rate Advance, the durationof the LIBOR Interest Period applicable thereto.

### 2.12           Changes in Interest Rate, Etc.

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 Each Floating RateAdvance shall bear interest on the outstanding principal amount thereof, foreach day from and including the date such Advance is made or is converted froma LIBOR Rate Advance into a Floating Rate Advance pursuant to Section 2.11to but excluding the date it becomes due or is converted into a LIBOR RateAdvance pursuant to Section 2.11 hereof, at a rate per annum equal tothe Floating Rate for such day.  Changes in the rate of interest on thatportion of any Advance maintained as a Floating Rate Advance will take effectsimultaneously with each change in the Alternate Base Rate.  Each LIBOR RateAdvance shall bear interest from and including the first day of the LIBORInterest Period applicable thereto to (but not including) the last day of suchLIBOR Interest Period at the interest rate determined as applicable to suchLIBOR Rate Advance.

### 2.13           Rates Applicable After Default

.  During thecontinuance of a Default the Administrative Agent may, at the direction of theRequired Lenders, by notice to the Borrower, declare that (i) no Advance may bemade as, converted into, or continued beyond the expiration of any then-currentInterest Period as, a Fixed Rate Advance, and (ii) the Default Rate shall apply(which notice may be revoked at the option of the Required Lendersnotwithstanding any provision of Section 9.2 requiring unanimous consentof the Lenders to changes in interest rates), provided, however, that theDefault Rate shall become applicable automatically if a Default occurs under Section8.1, 8.2, or 8.3, unless waived by the Required Lenders.

### 2.14           Method of Payment

.  All payments of theObligations hereunder shall be made, without setoff, deduction, orcounterclaim, in immediately available funds to the Administrative Agent at theAdministrative Agent's address specified pursuant to Article XIV,or at any other Lending Installation of the Administrative Agent specified inwriting at least three (3) Business Days in advance by the Administrative Agentto the Borrower, by noon (Cleveland time) on the date when due and shall beapplied ratably by the Administrative Agent among the Lenders.  As provided elsewhere herein, all Lenders' interests in theAdvances and the Loan Documents shall be ratable undivided interests and noneof such Lenders' interests shall have priority over the others.  Each paymentdelivered to the Administrative Agent for the account of any Lender or amountto be applied or paid by the Administrative Agent to any Lender shall be paidpromptly (on the same day as received by the Administrative Agent if receivedprior to noon (Cleveland time) on such day and otherwise on the next BusinessDay) by the Administrative Agent to such Lender in the same type of funds thatthe Administrative Agent received at its address specified pursuant to ArticleXIV or at any Lending Installation specified in a notice received by theAdministrative Agent from such Lender.  Payments received by the AdministrativeAgent but not timely funded to the Lenders shall bear interest payable by theAdministrative Agent at the Federal Funds Effective Rate from the date due untilthe date paid.  The Administrative Agent is hereby authorized to charge theaccount of the Borrower maintained with National City Bank for each payment ofprincipal, interest and fees as it becomes due hereunder.

### 2.15           Notes; Telephonic Notices

.  Each Lender ishereby authorized to record the principal amount of each of its Loans and eachrepayment on the schedule attached to its Note, provided, however, that thefailure to so record shall not affect the Borrower's obligations under suchNote.  The Borrower hereby authorizes the Lenders and the Administrative Agentto extend, convert or continue Advances, effect selections of Types of Advancesand to transfer funds based on written notices made by any Authorized Officerand Borrower agrees to deliver promptly to the Administrative Agent suchwritten notice.  The Administrative Agent will at the request of the Borrower,from time to time, but not more often than monthly, provide notice of theamount of the outstanding Aggregate Commitment, the Type of Advance, and theapplicable interest rate, if for a LIBOR Rate Advance.  Upon a Lender'sfurnishing to Borrower an affidavit to such effect, if a Note is mutilated,destroyed, lost or stolen, Borrower shall deliver to such Lender, insubstitution therefore, a new note containing the same terms and conditions assuch Note being replaced.

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### 2.16           Interest Payment Dates;Interest and Fee Basis

.  Interest accrued oneach Advance shall be payable on each Payment Date, commencing with the firstsuch date to occur after the date hereof, at maturity, whether by accelerationor otherwise, and upon any termination of the Aggregate Commitment in itsentirety.  Interest on LIBOR Rate Advances, Facility Letter of Credit Fees andCommitment Fees shall be calculated for actual days elapsed on the basis of a360-day year.  Interest on Floating Rate Advances and Swingline Advances shallbe calculated for actual days elapsed on the basis of a 365 (or 366, asapplicable) day year. Interest shall be payable for the day an Advance is madebut not for the day of any payment on the amount paid if payment is receivedprior to noon (Cleveland time) at the place of payment.  If any payment ofprincipal of or interest on an Advance shall become due on a day which is not aBusiness Day, such payment shall be made on the next succeeding Business Dayand, in the case of a principal payment, such extension of time shall beincluded in computing interest in connection with such payment.

### 2.17           Notification of Advances,Interest Rates and Prepayments

.  The AdministrativeAgent will notify each Lender of the contents of each Borrowing Notice,Conversion/Continuation Notice, and repayment notice received by it hereundernot later than the close of business on the Business Day such notice isreceived by the Administrative Agent.  The Administrative Agent will notifyeach Lender of the interest rate applicable to each LIBOR Rate Advance promptlyupon determination of such interest rate and will give each Lender promptnotice of each change in the Alternate Base Rate.

### 2.18           Lending Installations

.  Each Lender maybook its Loans at any Lending Installation selected by such Lender and maychange its Lending Installation from time to time.  All terms of this Agreementshall apply to any such Lending Installation and the Notes shall be deemed heldby each Lender for the benefit of such Lending Installation.  Each Lender may,by written or telex notice at least three (3) Business Days in advance to theAdministrative Agent and the Borrower, designate a Lending Installation throughwhich Loans will be made by it and for whose account Loan payments are to bemade.

### 2.19           Non-Receipt of Funds by theAdministrative Agent

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.  Unless the Borroweror a Lender, as the case may be, notifies the Administrative Agent prior to thetime at which it is scheduled to make payment to the Administrative Agent of(i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of theBorrower, a payment of principal, interest or fees to the Administrative Agentfor the account of the Lenders, that it does not intend to make such payment,the Administrative Agent may assume that such payment has been made.  TheAdministrative Agent may, but shall not be obligated to, make the amount ofsuch payment available to the intended recipient in reliance upon such assumption. If such Lender or the Borrower, as the case may be, has not in fact made suchpayment to the Administrative Agent, the recipient of such payment shall, ondemand by the Administrative Agent, repay to the Administrative Agent theamount so made available together with interest thereon in respect of each dayduring the period commencing on the date such amount was so made available bythe Administrative Agent until the date the Administrative Agent recovers suchamount at a rate per annum equal to (i) in the case of payment by a Lender, theFederal Funds Effective Rate for such day plus an administrative fee of $200 or(ii) in the case of payment by the Borrower, the interest rate applicable tothe relevant Loan plus an administrative fee of $200.  If such Lender so repayssuch amount and interest thereon to the Administrative Agent within oneBusiness Day after such demand, all interest accruing on the Loan not funded bysuch Lender during such period shall be payable to such Lender when received fromthe Borrower.

### 2.20           Replacement of Lenders underCertain Circumstances

.  The Borrower shallbe permitted to replace any Lender which (a) is not capable of receivingpayments without any deduction or withholding of United States federal incometax pursuant to Section 4.5, or (b) cannot maintain its LIBORRate Loans at a suitable Lending Installation pursuant to Section 4.3,with a replacement bank or other financial institution; provided that(i) such replacement does not conflict with any applicable legal orregulatory requirements affecting the Lenders, (ii) no Default or (afternotice thereof to the Borrower) no Unmatured Default  shall have occurred andbe continuing at the time of such replacement, (iii) the Borrower shallrepay (or the replacement bank or institution shall purchase, at par) all Loansand other amounts owing to such replaced Lender prior to the date ofreplacement, (iv) the Borrower shall be liable to such replaced Lenderunder Sections 4.4 and 4.6 if any LIBOR Rate Loan owing tosuch replaced Lender shall be prepaid (or purchased) other than on the last dayof the Interest Period relating thereto, (v) the replacement bank orinstitution, if not already a Lender, and the terms and conditions of suchreplacement, shall be reasonably satisfactory to the Administrative Agent,(vi) the replaced Lender shall be obligated to make such replacement inaccordance with the provisions of Section 13.3 (provided that theBorrower shall be obligated to pay the processing fee referred to therein),(vii) until such time as such replacement shall be consummated, theBorrower shall pay all additional amounts (if any) required pursuant to Section 4.5and (viii) any such replacement shall not be deemed to be a waiver of anyrights which the Borrower, the Administrative Agent or any other Lender shallhave against the replaced Lender.

### 2.21           Swingline Advances.

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 In addition to theother options available to the Borrower hereunder, the Swingline Commitmentshall be available for Swingline Advances subject to the following terms andconditions.  Swingline Advances shall be made available for same day borrowingsprovided that notice is given in accordance with Section 2.10hereof during the period commencing on the Agreement Effective Date and endingon a date ten (10) days prior to the then-current Facility Termination Date. Each Swingline Advance shall bear interest at a variable rate for each day suchSwingline Advance is outstanding equal to the LIBOR Flex Rate for such day.  Inno event shall the Swingline Lender be required to fund a Swingline Advance ifit would increase the total aggregate outstanding Loans by Swingline Lenderhereunder plus its Percentage of Reimbursement Obligations to an amount inexcess of the Swingline Lender's Commitment.  No Swingline Advance may be madeto repay a Swingline Advance, but Borrower may repay Swingline Advances fromsubsequent pro rata Advances hereunder.  On the fifteenth day and on the lastBusiness Day of each calendar month, if any Swingline Advances have notpreviously been paid, each Lender irrevocably agrees to purchase its Percentageof any Swingline Advance made by the Swingline Lender regardless of whether theconditions for disbursement are satisfied at the time of such purchase,including the existence of a Default hereunder provided that Swingline Lenderdid not have actual knowledge of such Default at the time the Swingline Advancewas made and provided further that no Lender shall be required to have totaloutstanding Loans plus its Percentage of Reimbursement Obligations exceed itsCommitment.  Such purchase shall take place on the date of the request bySwingline Lender so long as such request is made by 11:00 a.m. (Clevelandtime), and otherwise on the Business Day following such request.  All requestsfor purchase shall be in writing.  From and after the date it is so purchased,each such Swingline Advance shall, to the extent purchased, (i) be treatedas a Loan made by the purchasing Lenders and not by the selling Lender for allpurposes under this Agreement and the payment of the purchase price by a Lendershall be deemed to be the making of a Loan by such Lender and shall constituteoutstanding principal under such Lender's Note, and (ii) shall no longerbe considered a Swingline Advance except that all interest accruing on orattributable to such Swingline Advance for the period prior to the date of suchpurchase shall be paid when due by the Borrower to the Administrative Agent forthe benefit of the Swingline Lender and all such amounts accruing on orattributable to such Loans for the period from and after the date of suchpurchase shall be paid when due by the Borrower to the Administrative Agent forthe benefit of the purchasing Lenders.  If prior to purchasing its Percentageof a Swingline Advance one of the events described in Section 8.7 shall haveoccurred and such event prevents the consummation of the purchase contemplatedby preceding provisions, each Lender will purchase an undivided participatinginterest in the outstanding Swingline Advance in an amount equal to itsPercentage of such Swingline Advance.  From and after the date of each Lender'spurchase of its participating interest in a Swingline Advance, if the SwinglineLender receives any payment on account thereof, the Swingline Lender will distributeto such Lender its participating interest in such amount (appropriatelyadjusted, in the case of interest payments, to reflect the period of timeduring which such Lender's participating interest was outstanding and funded);provided, however, that in the event that such payment was received by theSwingline Lender and is required to be returned to the Borrower, each Lenderwill return to the Swingline Lender any portion thereof previously distributedby the Swingline Lender to it.  If any Lender fails to so purchase itsPercentage of any Swingline Advance, such Lender shall be deemed to be aDefaulting Lender hereunder.

### 2.22           Letter of Credit Subfacility.  

###  

### (a)               Obligation to Issue.  Subject to the terms and conditionsof this Agreement and in reliance upon the representations and warranties ofthe Borrower herein set forth, the Issuing Bank hereby agrees to issue for theaccount of the Borrower, one or more Facility Letters of Credit in accordancewith this Section 2.22, from time to time during the period commencingon the Agreement Effective Date and ending on a date sixty (60) days prior tothe then-current Facility Termination Date.

### (b)              Types and Amounts. The Issuing Bank shall not have anyobligation to:

### (i)                 issue any Facility Letter of Credit if the aggregate maximumamount then available for drawing under Letters of Credit issued by suchIssuing Bank, after giving effect to the Facility Letter of Credit requestedhereunder, shall exceed any limit imposed by law or regulation upon suchIssuing Bank;

### (ii)               issue any Facility Letter of Credit if, after giving effectthereto, (1) the then applicable Allocated Facility Amount would exceed thethen current Aggregate Commitment, or (2) the Facility Letter of CreditObligations would exceed the Facility Letter of Credit Sublimit; or

### (iii)              issue any Facility Letter of Credit having an expiration date, orcontaining automatic extension provision to extend such date, to a date beyondthe thirtieth (30th) day preceding the then-current FacilityTermination Date.

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### (c)               Conditions. In addition to being subject to thesatisfaction of the conditions contained in Article V hereof, theobligation of the Issuing Bank to issue any Facility Letter of Credit issubject to the satisfaction in full of the following conditions:

### (i)                 the Borrower shall have delivered to the Issuing Bank at suchtimes and in such manner as the Issuing Bank may reasonably prescribe suchdocuments and materials as may be reasonably required pursuant to the terms ofthe proposed Facility Letter of Credit (it being understood that if any inconsistencyexists between such documents and the Loan Documents, the terms of the LoanDocuments shall control) and the proposed Facility Letter of Credit shall bereasonably satisfactory to the Issuing Bank as to form and content;

### (ii)               as of the date of issuance, no order, judgment or decree of anycourt, arbitrator or governmental authority shall purport by its terms toenjoin or restrain the Issuing Bank from issuing the requested Facility Letterof Credit and no law, rule or regulation applicable to the Issuing Bank and norequest or directive (whether or not having the force of law) from anygovernmental authority with jurisdiction over the Issuing Bank shall prohibitor request that the Issuing Bank refrain from the issuance of Letters of Creditgenerally or the issuance of the requested Facility Letter or Credit inparticular; and

### (iii)              there shall not exist any Default.

### (d)              Procedure for Issuance of Facility Letters of Credit. Borrower shall give the Issuing Bank and theAdministrative Agent at least three (3) Business Days' prior written notice ofany requested issuance of a Facility Letter of Credit under this Agreement (a"Letter of Credit Request") and shall (i) immediately provide the Issuing Bankand the Administrative Agent with a telecopy of the written notice requiredhereunder which has been signed by an Authorized Officer or a telex containingall information required to be contained in such written notice and (ii)promptly provide the Issuing Bank and the Administrative Agent (in no eventlater than the requested date of issuance) with the written notice requiredhereunder containing the original signature of an authorized officer; suchnotice shall be irrevocable, except as provided below in this Section2.22(d), and shall specify:

### (i)                 the stated amount of the FacilityLetter of Credit requested (which stated amount shall not be less than$50,000);

### (ii)               the effective date (which day shall be a Business Day) ofissuance of such requested Facility Letter of Credit (the "Issuance Date");

### (iii)              the date on which such requested Facility Letter of Credit is toexpire (which day shall be a Business Day);

### (iv)             the purpose for which such Facility Letter of Credit is to beissued;

### (v)               the Person for whose benefit the requested Facility Letter ofCredit is to be issued; and

### (vi)             any special language required to be included in the FacilityLetter of Credit.

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            Such notice, to be effective, must bereceived by such Issuing Bank and the Administrative Agent not later than noon (Cleveland time) on the last Business Day on which notice can be given under thisSection2.22(d).

            Subject to the terms and conditions ofthis Section 2.22 and provided that the applicable conditions set forthin Article V hereof have been satisfied, the Issuing Bank shall, onthe Issuance Date, issue a Facility Letter of Credit on behalf of the Borrowerin accordance with the Letter of Credit Request and the Issuing Bank's usualand customary business practices unless the Issuing Bank has actually received(i) written notice from the Borrower specifically revoking the Letter of CreditRequest with respect to such Facility Letter of Credit given not later thanBusiness Day immediately preceding the Issuance Date, or (ii) written ortelephonic notice from the Administrative Agent stating that the issuance ofsuch Facility Letter of Credit would violate Section 2.22(b).

            The Issuing Bank shall give theAdministrative Agent (who shall promptly notify Lenders) and the Borrowerwritten or telex notice, or telephonic notice confirmed promptly thereafter inwriting, of the issuance of a Facility Letter of Credit (the "IssuanceNotice").

            The Issuing Bank shall not extend oramend any Facility Letter of Credit unless the requirements of this Section2.22(d) are met as though a new Facility Letter of Credit was beingrequested and issued.

### (e)               Reimbursement Obligations; Duties of Issuing Bank.

### (i)                 The Issuing Bank shall promptly notify the Borrower and theAdministrative Agent (who shall promptly notify Lenders) of any draw under aFacility Letter of Credit.  Any such draw shall not be deemed to be a defaulthereunder but shall constitute an Advance of the Facility in the amount of theReimbursement Obligation with respect to such Facility Letter of Credit andshall bear interest from the date of the relevant drawing(s) under thepertinent Facility Letter of Credit at the Floating Rate; provided that if aDefault or an Unmatured Default regarding the non-payment of any monetaryobligations to the Administrative Agent or the Lenders exists at the time ofany such drawing(s), then the Borrower shall reimburse the Issuing Bank fordrawings under a Facility Letter of Credit issued by the Issuing Bank no laterthan the next succeeding Business Day after the payment by the Issuing Bank anduntil repaid such Reimbursement Obligation shall bear interest at the DefaultRate.

### (ii)               Any action taken or omitted to be taken by the Issuing Bank underor in connection with any Facility Letter of Credit, if taken or omitted in theabsence of willful misconduct or gross negligence, shall not put the IssuingBank under any resulting liability to any Lender or, provided that such IssuingBank has complied with the procedures specified in Section 2.22(d),relieve that Lender of its obligations hereunder to the Issuing Bank. Indetermining whether to pay under any Facility Letter of Credit, the IssuingBank shall have no obligation relative to the Lenders other than to confirmthat any documents required to be delivered under such Letter of Credit appearto have been delivered in compliance, and that they appear to comply on their face,with the requirements of such Letter of Credit.

### (f)                Participation.

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### (i)                 Immediately upon issuance by the Issuing Bank of any FacilityLetter of Credit in accordance with the procedures set forth in Section 2.22(d),each Lender shall be deemed to have irrevocably and unconditionally purchasedand received from the Issuing Bank, without recourse, representation orwarranty, an undivided interest and participation equal to such Lender'sPercentage in such Facility Letter of Credit (including, without limitation, allobligations of the Borrower with respect thereto) and all related rightshereunder and under the Guaranty and other Loan Documents.  Each Lender'sobligation to make further Loans to Borrower (other than any payments suchLender is required to make under subparagraph (ii) below) or to purchase aninterest from the Issuing Bank in any subsequent Facility Letters of Creditissued by the Issuing Bank on behalf of Borrower shall be reduced by suchLender's Percentage of the undrawn portion of each Facility Letter of Creditoutstanding.

### (ii)               In the event that the Issuing Bank makes any payment under anyFacility Letter of Credit and the Borrower shall not have repaid such amount tothe Issuing Bank pursuant to Section 2.22(g) hereof, the Issuing Bankshall promptly notify the Administrative Agent, which shall promptly notifyeach Lender of such failure, and each Lender shall promptly and unconditionallypay to the Administrative Agent for the account of the Issuing Bank the amountof such Lender's Percentage of the unreimbursed amount of such payment, and theAdministrative Agent shall promptly pay such amount to the Issuing Bank. Lender's payments of its Percentage of such Reimbursement Obligation asaforesaid shall be deemed to be a Loan by such Lender and shall constituteoutstanding principal under such Lender's Note.  The failure of any Lender tomake available to the Administrative Agent for the account of the Issuing Bankits Percentage of the unreimbursed amount of any such payment shall not relieveany other Lender of its obligation hereunder to make available to theAdministrative Agent for the account of such Issuing Bank its Percentage of theunreimbursed amount of any payment on the date such payment is to be made, butno Lender shall be responsible for the failure of any other Lender to makeavailable to the Administrative Agent its Percentage of the unreimbursed amountof any payment on the date such payment is to be made.  Any Lender which failsto make any payment required pursuant to this Section 2.22(f)(ii)shall be deemed to be a Defaulting Lender hereunder.

### (iii)              Whenever the Issuing Bank receives a payment on account of aReimbursement Obligation, including any interest thereon, the Issuing Bankshall promptly pay to the Administrative Agent and the Administrative Agentshall promptly pay to each Lender which has funded its participating interesttherein, in immediately available funds, an amount equal to such Lender'sPercentage thereof.

### (iv)             Upon the request of the Administrative Agent or any Lender, theIssuing Bank shall furnish to such Administrative Agent or Lender copies of anyFacility Letter of Credit to which the Issuing Bank is party and such otherdocumentation as may reasonably be requested by the Administrative Agent orLender.

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### (v)               The obligations of a Lender to make payments to theAdministrative Agent for the account of the Issuing Bank with respect to aFacility Letter of Credit shall be absolute, unconditional and irrevocable, notsubject to any counterclaim, set‐off, qualification or exception whatsoeverother than a failure of any such Issuing Bank to comply with the terms of thisAgreement relating to the issuance of such Facility Letter of Credit, and suchpayments shall be made in accordance with the terms and conditions of thisAgreement under all circumstances.

### (g)               Payment of Reimbursement Obligations.  The Borrower agreesto pay to the Administrative Agent for the account of the Issuing Bank theamount of all Advances for Reimbursement Obligations, interest and otheramounts payable to the Issuing Bank under or in connection with any FacilityLetter of Credit when due, irrespective of any claim, set‐off, defense orother right which the Borrower may have at any time against any Issuing Bank orany other Person, under all circumstances, including without limitation any ofthe following circumstances:

### (i)                 any lack of validity or enforceability of this Agreement or anyof the other Loan Documents;

### (ii)               the existence of any claim, setoff, defense or other right whichthe Borrower may have at any time against a beneficiary named in a FacilityLetter of Credit or any transferee of any Facility Letter of Credit (or anyPerson for whom any such transferee may be acting), the Administrative Agent,the Issuing Bank, any Lender, or any other Person, whether in connection withthis Agreement, any Facility Letter of Credit, the transactions contemplatedherein or any unrelated transactions (including any underlying transactionsbetween the Borrower and the beneficiary named in any Facility Letter ofCredit);

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

### (iv)             the surrender or impairment of any security for the performanceor observance of any of the terms of any of the Loan Documents; or

### (v)               the occurrence of any Default.

            In the event any payment by the Borrowerreceived by the Issuing Bank or the Administrative Agent with respect to aFacility Letter of Credit and distributed by the Administrative Agent to theLenders on account of their participations is thereafter set aside, avoided orrecovered from the Administrative Agent or Issuing Bank in connection with anyreceivership, liquidation, reorganization or bankruptcy proceeding, each Lenderwhich received such distribution shall, upon demand by the AdministrativeAgent, contribute such Lender's Percentage of the amount set aside, avoided orrecovered together with interest at the rate required to be paid by the IssuingBank or the Administrative Agent upon the amount required to be repaid by theIssuing Bank or the Administrative Agent.

### (h)               Compensation for Facility Letters of Credit.

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### (i)                 (a)        The Borrower shall pay to the Administrative Agent,for the ratable account of the Lenders (including the Issuing Bank), based uponthe Lenders' respective Percentages, a per annum fee (the "Facility Letterof Credit Fee") as a percentage of the face amount of each Facility Letterof Credit outstanding equal to the LIBOR Applicable Margin in effect from timeto time while such Facility Letter of Credit is outstanding.  The FacilityLetter of Credit Fee relating to any Facility Letter of Credit shall accrue ona daily basis and shall be due and payable in arrears on the first Business Dayof each calendar quarter following the issuance of such Facility Letter ofCredit and, to the extent any such fees are then due and unpaid, on theFacility Termination Date or any other earlier date that the Obligations aredue and payable in full.  The Administrative Agent shall promptly remit suchFacility Letter of Credit Fees, when paid, to the other Lenders in accordancewith their Percentages thereof.  The Borrower shall not have any liability toany Lender for the failure of the Administrative Agent to promptly deliverfunds to any such Lender and shall be deemed to have made all such payments onthe date the respective payment is made by the Borrower to the AdministrativeAgent, provided such payment is received by the time specified in Section 2.14hereof.

### (ii)               (b)        The Issuing Bank also shall have the right to receivesolely for its own account an issuance fee equal to one‐eighth of onepercent (0.125%) of the face amount of each Facility Letter of Credit, payableby the Borrower on the Issuance Date for each such Facility Letter of Creditand on the date of any increase therein or extension thereof.  The Issuing Bankshall also be entitled to receive its reasonable out‐of‐pocketcosts and the Issuing Bank's standard charges of issuing, amending andservicing Facility Letters of Credit and processing draws thereunder.

### (i)                 Letter of Credit Collateral Account.  The Borrower herebyagrees that it will immediately upon the occurrence of the Default, establish aspecial collateral account (the "Letter of Credit Collateral Account")at the Administrative Agent's office at the address specified pursuant to Article XIV,in the name of the Borrower but under the sole dominion and control of theAdministrative Agent, for the benefit of the Lenders, and in which the Borrowershall have no interest other than as set forth in Section 9.1.  TheLetter of Credit Collateral Account shall hold the deposits the Borrower isrequired to make after a Default on account of any outstanding Facility Lettersof Credit as described in Section 9.1.  In addition to theforegoing, the Borrower hereby grants to the Administrative Agent, for thebenefit of the Lenders, a security interest in and to the Letter of CreditCollateral Account and any funds that may hereafter be on deposit in suchaccount, including income earned thereon.  The Lenders acknowledge and agreethat the Borrower has no obligation to fund the Letter of Credit CollateralAccount unless and until so required under Section 9.1 hereof.

### ARTICLEIII UNENCUMBERED POOL PROPERTIES

###             3.1        Eligibility of Projects

**.**

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### (a)               As of the Agreement ExecutionDate, the Lenders have approved for inclusion as Qualifying UnencumberedProjects those Projects identified on Schedule 3.1, and such Projectsshall become the initial Qualifying Unencumbered Projects.  Lenders acknowledgethat two of such Projects are encumbered as of the Agreement Execution Date.Borrower hereby agrees, and irrevocably directs the Administrative Agent, tofund such portion of the proceeds of the initial Advance hereunder as is neededto cause such Projects to be released from the applicable Liens to repay thatportion of the Indebtedness secured thereby required to be repaid under theapplicable "pay off" letters delivered to the Administrative Agent pursuant to Section5.1 hereof.

### (b)              If, after the Agreement ExecutionDate, Borrower desires that the Lenders include any additional Projects asQualifying Unencumbered Projects Borrower shall so notify the Agent inwriting.  No Property will be evaluated by the Lenders unless it is an EligibleUnencumbered Project and unless and until the Borrower delivers to the Agentthe following, in form and substance satisfactory to the Agent: 

### (i)                 a description of such Project ,such description to include the age, location, size and occupancy rate of suchProject ;

### (ii)               a certificate of  Borrowercertifying that insurance of the type required hereunder is in effect withrespect to such Project and that, to the best of Borrower's knowledge, thereare no material environmental concerns with respect to such Project; and

### (iii)              such other information, includingoperating statements and site plans, that the Agent may reasonably request inorder to evaluate such Project.

### (c)               If, after receipt and review ofthe foregoing, unless Agent has reasonably determined that the additionalProject does not satisfy the requirements to be an Eligible UnencumberedProject, the Agent will notify the Borrower and each Lender within five (5)Business Days after receipt of all of the above items that it is prepared toproceed with the acceptance of such Project as an Unencumbered Project.  If theAgent has determined that the additional Project does not satisfy therequirements to be an Eligible Unencumbered Project and therefore that additionof such Property as a Qualifying Unencumbered Project requires Requisite Lenderapproval, the Agent shall so notify the Borrower and the Lenders and shallforward to the Lenders all documents and information submitted by Borrower withrespect to such additional Project. In such event each Lender shall notify theAgent whether it approves of the designation of such Project as a QualifyingUnencumbered Project, notwithstanding such non-compliance, within ten (10)Business Days of receipt of such notice and all such documents andinformation.  If a Lender shall fail to so notify the Agent, then such Lendershall be deemed to have approved of such Project.  Upon approval of suchProject by the Agent, or, if required, by Requisite Lenders, and upon executionand delivery of all of the documents required to be provided under Section3.2, such Project shall become a Qualifying Unencumbered Project .

### 3.2              Conditions Precedent to aProject Becoming a Qualifying Unencumbered Project

**.**** **NoProperty shall become a Qualifying Unencumbered Project until the Agent, or, ifrequired, the Requisite Lenders, shall have approved of such Project asprovided in Section 3.1, and Borrower shall have caused to be executedand delivered to the Agent the following instruments, documents and agreementsin respect of such Property, each to be in form and substance reasonablysatisfactory to the Agent:

### (a)               if such Project is owned by aSubsidiary that is not already a Subsidiary Guarantor, a joinder agreement withrespect to the Subsidiary Guaranty in the form attached thereto as Exhibit A executedby such Subsidiary and all of the items that would have been required to bedelivered to the Agent under Sections 5.1(b) through (f) had suchSubsidiary been a Loan Party on the Effective Date;

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### (b)              a Compliance Certificatecalculated after giving effect to the inclusion of such Project as a QualifyingUnencumbered Project; and

### (c)               such other due diligencematerials, instruments, documents, certificates, and opinions as the Agent mayreasonably request. 

### 3.3              Release of SubsidiaryGuarantors and Qualifying Unencumbered Projects

.  From time to time Borrower may request, upon not lessthan two (2) Business Days prior written notice to the Agent, that theSubsidiary owning a Qualifying Unencumbered Project be released from theGuaranty, or that any Qualifying Unencumbered Project be released from suchstatus in whole or in part, which release (the "Release") shall beeffected by the Agent if all of the following conditions are satisfied as ofthe date of such Release:

### (a)               Borrower shall have delivered aCompliance Certificate showing pro forma compliance with the covenants setforth in Section 10.1 after giving effect to such Release; and

### (b)              If after giving effect to suchRelease (and taking into account any concurrent addition of a new QualifyingUnencumbered Project pursuant to Section 3.1), the resulting reductionin the Unencumbered Real Property Value and Unencumbered Real Property AdjustedNOI would cause a breach of either Section 7.20(c) or Section 7.20(d),Borrower shall have repaid such Advances, if any, as may be required to reducethe outstanding Advances to the maximum amount of Advances that can beoutstanding without creating such a breach of Section 7.20(c) or Section7.20(d).

            Inconnection with a Release, Borrower shall deliver to the Agent a certificatefrom Borrower's chief executive officer or chief financial officer regardingthe matters referred to in the immediately preceding clauses (a) and (b). Notwithstanding the foregoing, the Agent shall not be obligated to release anysuch Subsidiary from the Subsidiary Guaranty if (i) such Subsidiary owns anyother Qualifying Unencumbered Projects that are not being so releasedfrom such status or (ii) a Default or Unmatured Default has occurred and isthen continuing.

### ARTICLEIVCHANGE IN CIRCUMSTANCES

### 4.1              Yield Protection

.  If, on or after thedate of this Agreement, the adoption of any law or any governmental orquasi-governmental rule, regulation, policy, guideline or directive (whether ornot having the force of law), or any change in the interpretation oradministration thereof by any governmental or quasi-governmental authority,central bank or comparable agency charged with the interpretation oradministration thereof, or compliance by any Lender or applicable LendingInstallation with any request or directive (whether or not having the force oflaw) of any such authority, central bank or comparable agency:

### (i)                 subjects any Lender or anyapplicable Lending Installation to any Taxes, or changes the basis of taxationof payments (other than with respect to Excluded Taxes) to any Lender inrespect of its LIBOR Rate Loans, or

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### (ii)               imposes or increases or deemsapplicable any reserve, assessment, insurance charge, special deposit orsimilar requirement against assets of, deposits with or for the account of, orcredit extended by, any Lender or any applicable Lending Installation (otherthan the Reserve Requirement and any other reserves and assessments taken intoaccount in determining the interest rate applicable to LIBOR Rate Advances), or

### (iii)              imposes any other condition thedirect result of which is to increase the cost to any Lender or any applicableLending Installation of making, funding or maintaining its LIBOR Rate Loans, orreduces any amount receivable by any Lender or any applicable LendingInstallation  in connection with its LIBOR Rate Loans, or requires any Lenderor any applicable Lending Installation to make any payment calculated byreference to the amount of LIBOR Rate Loans, by a material amount.

and theresult of any of the foregoing is to increase the cost to such Lender orapplicable Lending Installation, as the case may be, of making or maintainingits LIBOR Rate Loans or Commitment or to reduce the return received by suchLender or applicable Lending Installation in connection with such LIBOR RateLoans or Commitment, then, within 15 days of demand by such Lender, theBorrower shall pay such Lender such additional amount or amounts as willcompensate such Lender for such increased cost or reduction in amount received.

### 4.2              Changes in Capital AdequacyRegulations

.  If a Lender in goodfaith determines the amount of capital required or expected to be maintained bysuch Lender, any Lending Installation of such Lender or any corporationcontrolling such Lender  is increased as a result of a Change (as hereinafterdefined), then, within 15 days of demand by such Lender, the Borrower shall paysuch Lender the amount necessary to compensate for any shortfall in the rate ofreturn on the portion of such increased capital which such Lender in good faithdetermines is attributable to this Agreement, its outstanding credit exposurehereunder or its obligation to make Loans hereunder (after taking into accountsuch Lender's policies as to capital adequacy).  "Change" means(i) any change after the date of this Agreement in the Risk‐Based CapitalGuidelines (as hereinafter defined) or (ii) any adoption of or change inany other law, governmental or quasi‐governmental rule, regulation,policy, guideline, interpretation, or directive (whether or not having theforce of law) after the date of this Agreement which affects the amount ofcapital required or expected to be maintained by any Lender or any LendingInstallation or any corporation controlling any Lender.  "Risk‐BasedCapital Guidelines" means (i) the risk‐based capital guidelinesin effect in the United States on the date of this Agreement, includingtransition rules, and (ii) the corresponding capital regulationspromulgated by regulatory authorities outside the United States implementingthe July 1988 report of the Basle Committee on Banking Regulation andSupervisory Practices Entitled "International Convergence of CapitalMeasurements and Capital Standards," including transition rules, and anyamendments to such regulations adopted prior to the date of this Agreement.

### 4.3              Availability of Types ofAdvances

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.  If any Lender ingood faith determines that maintenance of any of its LIBOR Rate Loans at asuitable Lending Installation would violate any applicable law, rule,regulation or directive, whether or not having the force of law, the AdministrativeAgent shall, with written notice to Borrower, suspend the availability of theaffected Type of Advance and require any LIBOR Rate Advances of the affectedType to be repaid; or if the Required Lenders in good faith determine that(i) deposits of a type or maturity appropriate to match fund LIBOR RateAdvances are not available, the Administrative Agent shall, with written noticeto Borrower, suspend the availability of the affected Type of Advance withrespect to any LIBOR Rate Advances made after the date of any suchdetermination, or (ii) an interest rate applicable to a Type of Advancedoes not accurately reflect the cost of making a LIBOR Rate Advance of suchType, then, if for any reason whatsoever the provisions of Section 4.1are inapplicable, the Administrative Agent shall, with written notice toBorrower, suspend the availability of the affected Type of Advance with respectto any LIBOR Rate Advances made after the date of any such determination.  Ifthe Borrower is required to so repay a LIBOR Rate Advance, the Borrower mayconcurrently with such repayment borrow from the Lenders, in the amount of suchrepayment, a Loan bearing interest at the Floating Rate.

### 4.4              Funding Indemnification.

If any payment of aratable LIBOR Rate Advance occurs on a date which is not the last day of theapplicable Interest Period, whether because of acceleration, prepayment orotherwise, or a ratable LIBOR Rate Advance is not made on the date specified bythe Borrower for any reason other than default by the Lenders or as a result ofunavailability pursuant to Section 4.3, the Borrower will indemnifyeach Lender for any loss or cost incurred by it resulting therefrom, including,without limitation, any loss or cost (incurred or expected to be incurred) inliquidating or employing deposits acquired to fund or maintain the ratableLIBOR Rate Advance and shall pay all such losses or costs within fifteen (15)days after written demand therefor.

### 4.5              Taxes

.

### (a)               All payments by the Borrower to orfor the account of any Lender or the Administrative Agent hereunder or underany Note shall be made free and clear of and without deduction for any and allTaxes.  If the Borrower shall be required by law to deduct any Taxes from or inrespect of any sum payable hereunder to any Lender or the Administrative Agent,(a) the sum payable shall be increased as necessary so that after makingall required deductions (including deductions applicable to additional sumspayable under this Section 4.5) such Lender or the Administrative Agent(as the case may be) receives an amount equal to the sum it would have receivedhad no such deductions been made, (b) the Borrower shall make such deductions,(c) the Borrower shall pay the full amount deducted to the relevant authorityin accordance with applicable law and (d) the Borrower shall furnish to theAdministrative Agent the original copy of a receipt evidencing payment thereofwithin 30 days after such payment is made.

### (b)              In addition, the Borrower herebyagrees to pay any present or future stamp or documentary taxes and any otherexcise or property taxes, charges or similar levies which arise from anypayment made hereunder or under any Note or from the execution or delivery of,or otherwise with respect to, this Agreement or any Note ("Other Taxes").

### (c)               The Borrower hereby agrees toindemnify the Administrative Agent and each Lender for the full amount of Taxesor Other Taxes (including, without limitation, any Taxes or Other Taxes imposedon amounts payable under this Section 4.5) paid by the Administrative Agentor such Lender and any liability (including penalties, interest and expenses)arising therefrom or with respect thereto.  Payments due under thisindemnification shall be made within 30 days of the date the AdministrativeAgent or such Lender makes demand therefor pursuant to Section 4.6.

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### (d)              Each Lender that is notincorporated under the laws of the United States of America or a state thereof(each a "Non-U.S. Lender") agrees that it will, not more than ten Business Daysafter the Agreement Execution Date, (i) deliver to each of the Borrower and theAdministrative Agent two duly completed copies of United States InternalRevenue Service Form W-8BEN or W-8ECI, certifying in either case that suchLender is entitled to receive payments under this Agreement without deductionor withholding of any United States federal income taxes, and (ii) deliver toeach of the Borrower and the Administrative Agent a United States InternalRevenue Form W-8 or W-9, as the case may be, and certify that it is entitled toan exemption from United States backup withholding tax.  Each Non-U.S. Lenderfurther undertakes to deliver to each of the Borrower and the AdministrativeAgent (x) renewals or additional copies of such form (or any successor form) onor before the date that such form expires or becomes obsolete, and (y) afterthe occurrence of any event requiring a change in the most recent forms sodelivered by it, such additional forms or amendments thereto as may bereasonably requested by the Borrower or the Administrative Agent.  All forms oramendments described in the preceding sentence shall certify that such Lenderis entitled to receive payments under this Agreement without deduction orwithholding of any United States federal income taxes, unless an event(including without limitation any change in treaty, law or regulation) hasoccurred prior to the date on which any such delivery would otherwise berequired which renders all such forms inapplicable or which would prevent suchLender from duly completing and delivering any such form or amendment withrespect to it and such Lender advises the Borrower and the Administrative Agentthat it is not capable of receiving payments without any deduction orwithholding of United States federal income tax.

### (e)               For any period during which aNon-U.S. Lender has failed to provide the Borrower with an appropriate formpursuant to clause (iv), above (unless such failure is due to a change intreaty, law or regulation, or any change in the interpretation oradministration thereof by any governmental authority, occurring subsequent tothe date on which a form originally was required to be provided), such Non-U.S.Lender shall not be entitled to indemnification under this Section 4.5with respect to Taxes imposed by the United States.

### (f)                Any Lender that is entitled to anexemption from or reduction of withholding tax with respect to payments underthis Agreement or any Note pursuant to the law of any relevant jurisdiction orany treaty shall deliver to the Borrower (with a copy to the Administrative Agent),at the time or times prescribed by applicable law, such properly completed andexecuted documentation prescribed by applicable law as will permit suchpayments to be made without withholding or at a reduced rate following receiptof such documentation.

### (g)               If the U.S. Internal RevenueService or any other governmental authority of the United States or any othercountry or any political subdivision thereof asserts a claim that theAdministrative Agent did not properly withhold tax from amounts paid to or forthe account of any Lender (because the appropriate form was not delivered orproperly completed, because such Lender failed to notify the AdministrativeAgent of a change in circumstances which rendered its exemption fromwithholding ineffective, or for any other reason), such Lender shall indemnifythe Administrative Agent fully for all amounts paid, directly or indirectly, bythe Administrative Agent as tax, withholding therefor, or otherwise, includingpenalties and interest, and including taxes imposed by any jurisdiction onamounts payable to the Administrative Agent under this subsection, togetherwith all costs and expenses related thereto (including attorneys fees and timecharges of attorneys for the Administrative Agent, which attorneys may beemployees of the Administrative Agent).  The obligations of the Lenders underthis Section 4.5(g) shall survive the payment of the Obligationsand termination of this Agreement and any such Lender obligated to indemnifythe Administrative Agent shall not be entitled to indemnification from theBorrower with respect to such amounts, whether pursuant to this Articleor otherwise, except to the extent the Borrower participated in the actionsgiving rise to such liability.

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### 4.6              Lender Statements; Survival ofIndemnity

.  To the extentreasonably possible, each Lender shall designate an alternate LendingInstallation with respect to its LIBOR Rate Loans to reduce any liability ofthe Borrower to such Lender under Sections 4.1, 4.2 and 4.4 or to avoidthe unavailability of LIBOR Rate Advances under Section 4.3, so long assuch designation is not, in the reasonable judgment of such Lender,disadvantageous to such Lender.  Each Lender shall deliver a written statementof such Lender to the Borrower (with a copy to the Administrative Agent) as tothe amount due, if any, under Sections 4.1, 4.2, or 4.4.  Suchwritten statement shall set forth in reasonable detail the calculations uponwhich such Lender determined such amount and shall be final, conclusive andbinding on the Borrower in the absence of manifest error.  Determination ofamounts payable under such Sections in connection with a LIBOR Rate Loan shallbe calculated as though each Lender funded its LIBOR Rate Loan through thepurchase of a deposit of the type and maturity corresponding to the depositused as a reference in determining the LIBOR Rate applicable to such Loan,whether in fact that is the case or not.  Unless otherwise provided herein, theamount specified in the written statement of any Lender shall be payable ondemand after receipt by the Borrower of such written statement.  Theobligations of the Borrower under Sections 4.1, 4.2, or 4.4 shallsurvive payment of the Obligations and termination of this Agreement.

### ARTICLEVCONDITIONS PRECEDENT

### 5.1              Initial Advance.

 The Lenders shallnot be required to make the initial Advance hereunder unless (i) the Borrowershall, prior to or concurrently with such initial Advance, have paid all feesdue and payable to the Lenders and the Administrative Agent hereunder, and (ii)the Borrower shall have furnished to the Administrative Agent, with sufficientcopies for the Lenders, the following:

### (a)               The duly executed originals of theLoan Documents, including the Notes, payable to the order of each of theLenders, and this Agreement; 

### (b)              Certificates of good standing foreach Loan Party from its state of organization, certified by the appropriategovernmental officer and dated not more than thirty (30) days prior to theAgreement Execution Date;

### (c)               Copies of the formation documents(including code of regulations, if appropriate) of each Loan Party, certifiedby an officer of the Borrower, together with all amendments thereto;

### (d)              Incumbency certificates, executedby officers of the Borrower, which shall identify by name and title and bearthe signature of the Persons authorized to sign the Loan Documents and to makeborrowings hereunder on behalf of such parties, upon which certificate theAdministrative Agent and the Lenders shall be entitled to rely until informedof any change in writing by the Borrower;

### (e)               Copies, certified by a Secretaryor an Assistant Secretary, of the Borrower's resolutions (and resolutions ofthe other Loan Parties, if any are reasonably deemed necessary by counsel forthe Administrative Agent) authorizing the Advances provided for herein, withrespect to the Borrower, and the execution, delivery and performance of theLoan Documents to be executed and delivered by the Loan Parties;

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### (f)                A written opinion of theBorrower's counsel, addressed to the Lenders in substantially the form of ExhibitE hereto or such other form as the Administrative Agent may reasonablyapprove;

### (g)               A closing certificate, signed byan Authorized Officer of the Borrower, stating that on the initial BorrowingDate no Default or Unmatured Default has occurred and is continuing, there hasbeen no Material Adverse Effect nor any current or pending litigation that mayresult in a Material Adverse Effect other than as previously disclosed inwriting to the Administrative Agent, and that all representations and warrantiesof the Borrower are true and correct in all material respects as of the initialBorrowing Date provided that such certificate is in fact true and correct;

### (h)               The most recent financialstatements of the Borrower;

### (i)                 UCC financing statement, judgment,and tax lien searches with respect to the Borrower from the state of itsorganization and the state in which its principal place of business is located;

### (j)                Written money transferinstructions, addressed to the Administrative Agent and signed by an AuthorizedOfficer, together with such other related money transfer authorizations as theAdministrative Agent may have reasonably requested;

### (k)              A Compliance Certificate in theform of Exhibit B, utilizing the covenants established herein andexecuted by the Vice President and General Counsel, the Borrower's chieffinancial officer or chief executive officer;

### (l)                 "Pay off" letters from theapplicable lenders stating the amounts needed to be repaid to obtain therelease of their Liens on the two initial Qualifying Unencumbered Projectsdescribed in Section 3.1 hereof:

### (m)             Evidence that all reasonable costsrelated to the initial Advance, including reasonable legal fees, have been orwill be paid and that all upfront fees due to each of the Lenders under theterms of their respective commitment letters have been paid or will be paid outof the proceeds of the initial Advance hereunder; and

### (n)               Completion of any otherdocumentation the Administrative Agent or its counsel may have reasonablyrequested, the form and substance of which documents shall be reasonablyacceptable to the parties and their respective counsel.

### 5.2              Each Advance.  

The Lenders shall notbe required to make any Advance unless on the applicable Borrowing Date:

### (i)                 There exists no Default orUnmatured Default;

### (ii)               The representations and warrantiescontained in Article VI are true and correct in all materialrespects as of such Borrowing Date with respect to the Loan Parties inexistence on such Borrowing Date, except to the extent any such representationor warranty is stated to relate solely to an earlier date, in which case suchrepresentation or warranty shall be true and correct in all material respectson and as of such earlier date; and

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### (iii)              All legal matters incident to themaking of such Advance shall be satisfactory to the Lenders and their counsel.

Each Borrowing Notice withrespect to each Advance shall constitute a representation and warranty by theBorrower that the conditions contained in Sections 5.2(i) and (ii)have been satisfied.  Any Lender may require a duly completed ComplianceCertificate in substantially the same form of the Certificate attached as Exhibit B.

### ARTICLEVIREPRESENTATIONS AND WARRANTIES

TheBorrower represents and warrants to the Lenders that:

### 6.1              Existence. 

Borrower is acorporation duly organized and validly existing under the laws of the State ofOhio, with its principal place of business in Richmond Heights, Ohio and isduly qualified as a foreign corporation, properly licensed (if required), ingood standing and has all requisite authority to conduct its business in eachjurisdiction in which its business is conducted, except where the failure to beso qualified, licensed and in good standing and to have the requisite authoritywould not have a Material Adverse Effect.  Each of Borrower's Subsidiaries isduly incorporated or otherwise organized, validly existing and in good standingunder the laws of its jurisdiction of organization and has all requisiteauthority to conduct its business in each jurisdiction in which its business isconducted, except where the failure to be so qualified, licensed and in goodstanding and to have the requisite authority would not have a Material AdverseEffect.

### 6.2              Authorization and Validity.  

Each Loan Party hasthe corporate, limited partnership, or limited liability company power andauthority and legal right to execute and deliver the Loan Documents and toperform its obligations thereunder.  The execution and delivery by the Borrowerof the Loan Documents and the performance of its obligations thereunder havebeen duly authorized by proper proceedings, and the Loan Documents constitutelegal, valid and binding obligations of each Loan Party enforceable againsteach Loan Party in accordance with their terms, except as enforceability may belimited by bankruptcy, insolvency or similar laws affecting the enforcement ofcreditors' rights generally.

### 6.3              No Conflict; Government Consent

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.  Neither theexecution and delivery by the Loan Parties of the Loan Documents, nor theconsummation of the transactions therein contemplated, nor compliance with the provisionsthereof will violate any law, rule, regulation, order, writ, judgment,injunction, decree or award binding on the Borrower, any of Borrower'sSubsidiaries, or either of their articles of incorporation, operatingagreements, partnership agreement, or by-laws, or the provisions of anyindenture, instrument or agreement to which the Borrower or any of Borrower'sSubsidiaries is a party or is subject, or by which it, or its Property, isbound, or conflict with or constitute a default thereunder, except where suchviolation, conflict or default would not have a Material Adverse Effect, orresult in the creation or imposition of any Lien in, of or on the Property ofthe Borrower or a Subsidiary pursuant to the terms of any such indenture,instrument or agreement.  No order, consent, approval, license, authorization,or validation of, or filing, recording or registration with, or exemption by,any governmental or public body or authority, or any subdivision thereof, isrequired to authorize, or is required in connection with the execution,delivery and performance of, or the legality, validity, binding effect orenforceability of, any of the Loan Documents other than the filing of a copy ofthis Agreement.

### 6.4              Financial Statements; MaterialAdverse Effect

.  All consolidatedfinancial statements of the Loan Parties heretofore or hereafter delivered tothe Lenders were prepared in accordance with GAAP in effect on the date of suchstatements and fairly present in all material respects the consolidatedfinancial condition and operations of the Consolidated Group at such date andthe consolidated results of their operations for the period then ended,subject, in the case of interim financial statements, to normal and customaryyear-end adjustments.  From the date of the most recent financial statementsdelivered to the Lenders through the Agreement Execution Date, there was nochange in the business, properties, or condition (financial or otherwise) ofthe Borrower and its Subsidiaries which could reasonably be expected to have aMaterial Adverse Effect.

### 6.5              Taxes

. The Loan Partieshave filed all United States federal tax returns and all other tax returnswhich are required to be filed and have paid all taxes due pursuant to saidreturns or pursuant to any assessment received by the Borrower or any of itsSubsidiaries except such taxes, if any, as are being contested in good faithand as to which adequate reserves have been provided, and except any non‐compliancewhich does not have a Material Adverse Effect.  No tax liens have been filedwith respect to such taxes, except for ad valorem real estate tax contests inthe ordinary course of Borrower's business not having a Material AdverseEffect.  The charges, accruals and reserves on the books of the Borrower andits Subsidiaries in respect of any taxes or other governmental charges areadequate.

### 6.6              Litigation and GuaranteeObligations

.  Except as set forthon Schedule 6.6 hereto or as set forth in written notice to theAdministrative Agent from time to time, there is no litigation, arbitration,governmental investigation, proceeding or inquiry pending or, to the knowledgeof any of their executive officers, threatened against or affecting the LoanParties which could reasonably be expected to have a Material Adverse Effect. 

### 6.7              Subsidiaries

.  Schedule 6.7hereto contains, an accurate list of all Subsidiaries of the Borrower, settingforth their respective jurisdictions of incorporation or formation and thepercentage of their respective capital stock or partnership or membershipinterest owned by the Borrower or other Subsidiaries.  All of the issued andoutstanding shares of capital stock of such Subsidiaries that are corporationshave been duly authorized and issued and are fully paid and non-assessable.

### 6.8              ERISA.  

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            TheUnfunded Liabilities of all Single Employer Plans do not in the aggregateexceed $1,000,000.  Neither the Borrower nor any other member of the ControlledGroup has incurred, or is reasonably expected to incur, any withdrawalliability to Multiemployer Plans in excess of $250,000 in the aggregate.  EachPlan complies in all material respects with all applicable requirements of lawand regulations, no Reportable Event has occurred with respect to any Plan,neither the Borrower nor any other members of the Controlled Group haswithdrawn from any Plan or initiated steps to do so, and no steps have beentaken to reorganize or terminate any Plan.

            None ofthe assets of the Borrower or any Subsidiary constitute "plan assets" withinthe meaning of ERISA, the Code and the respective regulations promulgatedthereunder.  The execution, delivery and performance of this Agreement and theother Loan Documents, and the borrowing and repayment of amounts hereunder, donot and will not constitute "prohibited transactions" under ERISA or the Code.

### 6.9              Accuracy of Information.  

To the best ofBorrower's knowledge, no information, exhibit or report furnished by the LoanParties to the Administrative Agent or to any Lender in connection with thenegotiation of, or compliance with, the Loan Documents contained any materialmisstatement of fact or omitted to state a material fact or any fact necessaryto make the statements contained therein not misleading.

### 6.10           Regulation U

.  The Borrower hasnot used the proceeds of any Advance to buy or carry any margin stock (asdefined in Regulation U) in violation of the terms of this Agreement.

### 6.11           Material Agreements

.  Neither theBorrower nor any Subsidiary is in default in the performance, observance orfulfillment of any of the obligations, covenants or conditions contained in (i)any agreement to which it is a party, which default could have a MaterialAdverse Effect or (ii) any agreement or instrument evidencing or governingIndebtedness, which default would constitute a Default hereunder.

### 6.12           Compliance With Laws.  

Except as set forth inSchedule 6.6, Borrower is in compliance in all material aspects with allapplicable statutes, rules, regulations, orders and restrictions of anydomestic or foreign government or any instrumentality or agency thereof, havingjurisdiction over the conduct of their respective businesses or the ownershipof their respective Property, except for any non-compliance which would nothave a Material Adverse Effect.  The Loan Parties have not received any uncuredwritten notice to the effect that its operations are not in material compliancewith any of the requirements of applicable federal, state and localenvironmental, health and safety statutes and regulations or the subject of anyfederal or state investigation evaluating whether any remedial action is neededto respond to a release of any toxic or hazardous waste or substance into theenvironment, which non-compliance or remedial action could have a MaterialAdverse Effect.

### 6.13           Ownership of Projects.  

Except as set forth onSchedule 6.13 hereto, on the date of this Agreement, the Borrower or itsSubsidiaries will, respectively, have good and marketable title, free of allLiens other than Permitted Liens, respectively, to all of the Projectsreflected in the financial statements as owned by it.

### 6.14           Investment Company Act.  

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Neither the Borrowernor any Subsidiary is an "investment company" or a company "controlled" by an"investment company", within the meaning of the Investment Company Act of 1940,as amended.

### 6.15           Solvency.

### (a)               Immediately after the AgreementExecution Date and immediately following the making of each Loan and aftergiving effect to the application of the proceeds of such Loans, (a) thefair value of the assets of the Borrower and its Subsidiaries on a consolidatedbasis, at a fair valuation, will exceed the debts and liabilities,subordinated, contingent or otherwise, of the Borrower and its Subsidiaries ona consolidated basis; (b) the present fair saleable value of the Property ofthe Borrower and its Subsidiaries on a consolidated basis will be greater thanthe amount that will be required to pay the probable liability of the Borrowerand its Subsidiaries on a consolidated basis on their debts and otherliabilities, subordinated, contingent or otherwise, as such debts and other liabilitiesbecome absolute and matured; (c) the Borrower and its Subsidiaries on aconsolidated basis will be able to pay their debts and liabilities,subordinated, contingent or otherwise, as such debts and liabilities becomeabsolute and matured; and (d) the Borrower and its Subsidiaries on aconsolidated basis will not have unreasonably small capital with which toconduct the businesses in which they are engaged as such businesses are nowconducted and are proposed to be conducted after the date hereof.

### (b)              The Borrower does not intend to,or to permit any of its Subsidiaries to, and does not believe that it or any ofits Subsidiaries will, incur debts beyond its ability to pay such debts as theymature, taking into account the timing of and amounts of cash to be received byit or any such Subsidiary and the timing of the amounts of cash to be payableon or in respect of its Indebtedness or the Indebtedness of any suchSubsidiary.

### 6.16           Insurance.

 The Loan Parties carry insurance on their Projectswith financially sound and reputable insurance companies, in such amounts, withsuch deductibles and covering such risks as are customarily carried bycompanies engaged in similar businesses and owning similar Projects inlocalities where the Borrower and its Subsidiaries operate. 

### 6.17           REIT Status

.  Borrower is qualified as a real estate investmenttrust under Section 856 of the Code and currently is in compliance in allmaterial respects with all provisions of the Code applicable to thequalification of the Borrower as a real estate investment trust.

### 6.18           Title to Property

.  The execution,delivery or performance of the Loan Documents required to be delivered by theBorrower hereunder will not result in the creation of any Lien on the Projectsof the Consolidated Group.  No consent to the transactions contemplatedhereunder is required from any ground lessor or mortgagee or beneficiary undera deed of trust or any other party except as has been delivered to the Lenders.

### 6.19           Environmental Matters

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.  Each of thefollowing representations and warranties is true and correct on and as of theAgreement Execution Date except as disclosed on Schedule 6.19 attachedhereto and to the extent that the facts and circumstances giving rise to anysuch failure to be so true and correct, in the aggregate, would not reasonablybe expected to have a Material Adverse Effect:

### (a)               To the best knowledge of theBorrower, all Projects owned by the Borrower and/or its Subsidiaries are incompliance in all material respects with all applicable Environmental Laws.

### (b)              Neither the Borrower nor any ofits Subsidiaries has received any uncured, written notice of violation, allegedviolation, non-compliance, liability or potential liability regardingenvironmental matters or compliance with Environmental Laws from any GovernmentalAuthority with regard to any of the Projects, nor does the Borrower haveknowledge or reason to believe that any such written notice is beingthreatened.

### (c)               To the best knowledge of theBorrower, Materials of Environmental Concern are not transported or disposed offrom the Projects of the Borrower and its Subsidiaries in violation of, or in amanner or to a location which could reasonably give rise to liability of theBorrower or any Subsidiary under, Environmental Laws, nor are any Materials ofEnvironmental Concern being generated, treated, stored or disposed of at, on orunder any of the Projects of the Borrower and its Subsidiaries in violation of,or in a manner that could give rise to liability of the Borrower or anySubsidiary under, any applicable Environmental Laws.

### (d)              No judicial proceedings orgovernmental or administrative action is pending, or, to the knowledge of theBorrower, threatened, under any Environmental Law to which the Borrower or anyof its Subsidiaries is or, to the Borrower's knowledge, will be named as aparty with respect to the Projects of the Borrower and its Subsidiaries, norare there any consent decrees or other decrees, consent orders, administrativeorder or other orders, or other administrative of judicial requirements outstandingunder any Environmental Law with respect to the Projects of the Borrower andits Subsidiaries.

### (e)               To the best knowledgeof the Borrower, there has been no release or threat of release of Materials ofEnvironmental Concern at or from the Projects of the Borrower and itsSubsidiaries, or arising from or related to the operations of the Borrower andits Subsidiaries in connection with the Projects in violation of or in amountsor in a manner that could give rise to liability under Environmental Laws.

### 6.20           Office of Foreign Asset Control

.  Borrower and any Subsidiary Guarantor are not (andwill not be) a person with whom any Lender is restricted from doing businessunder regulations of the Office of Foreign Asset Control ("OFAC") of theDepartment of the Treasury of the United States of America (including, thosePersons named on OFAC's Specially Designated and Blocked Persons list) or underany statute, executive order (including, the September 24, 2001 Executive OrderBlocking Property and Prohibiting Transactions With Persons Who Commit,Threaten to Commit, or Support Terrorism), or other governmental action and isnot and shall not knowingly engage in any dealings or transactions or otherwisebe associated with such persons.  In addition, Borrower hereby agrees toprovide to any Lender with any additional information that any Lender deemsnecessary from time to time in order to ensure compliance with all applicableLaws concerning money laundering and similar activities.

### 6.21           Subsidiary Guaranty

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.           Borrowershall cause each Subsidiary Guarantor listed on Schedule 3.1, as amendedfrom time to time, to execute and deliver to the Administrative Agent theSubsidiary Guaranty.  Borrower shall cause each Subsidiary which hereafter ownsa Qualifying Unencumbered Project to execute and deliver to the AdministrativeAgent a joinder in the Subsidiary Guaranty in the form of Exhibit Aattached to the form of Subsidiary Guaranty.  Borrower covenants and agreesthat each Subsidiary which it shall cause to execute the Subsidiary Guarantyshall be fully authorized to do so by its supporting organizational andauthority documents and shall be in good standing in its state of organizationand shall have obtained any necessary foreign qualifications required toconduct its business.  

### 6.22           Intellectual Property

.  To the bestknowledge of Borrower, Borrower and each Subsidiary of Borrower owns or has theright to use, under valid license agreements or otherwise, all materialpatents, licenses, franchises, trademarks, trademark rights, trade names, tradename rights, trade secrets and copyrights (collectively, "IntellectualProperty") necessary to the conduct of its businesses as now conducted and ascontemplated by the Loan Documents, without known conflict as of the AgreementDate with any patent, license, franchise, trademark, trade secret, trade name,copyright, or other proprietary right of any other Person.  To the bestknowledge of Borrower, Borrower and each other Subsidiary have taken all suchsteps as they deem reasonably necessary to protect their respective rightsunder and with respect to such Intellectual Property.

### ARTICLEVIICOVENANTS

Duringthe term of this Agreement the following shall apply, unless the RequiredLenders shall otherwise consent in writing:

### 7.1              Financial Reporting.  

Borrower will maintaina system of accounting established and administered in accordance with GAAP,and will furnish to the Administrative Agent and the Lenders:

### (a)               As soon as available, but in anyevent not later than 45 days after the close of each fiscal quarter, other thanthe fourth quarter, an unaudited consolidated balance sheet as of the close ofeach such fiscal quarter and the related unaudited consolidated statements ofincome, retained earnings, and cash flows for each such quarter and for suchquarter and the preceding quarters of the current fiscal year, on an aggregatebasis, setting forth in each case in comparative form the figures for thecorresponding period during the previous fiscal year, all certified by theBorrower's chief financial officer or chief accounting officer as being trueand correct in all material respects to such officer's knowledge;

### (b)              As soon as available, but in anyevent not later than 90 days after the close of each fiscal year, auditedfinancial statements, including a consolidated balance sheet as at the end ofsuch year and the related consolidated statements of income and retainedearnings and of cash flows for such year, setting forth in each case incomparative form the figures for the previous year, without a "going concern" orlike qualification or exception, prepared by independent certified publicaccountants of nationally recognized standing reasonably acceptable to theAdministrative Agent and Lenders (PriceWaterhouse Coopers and the other bigfour firms are pre-approved);

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### (c)               Together with the quarterly andannual financial statements required hereunder, a compliance certificate, insubstantially the form of Exhibit B attached hereto (a "ComplianceCertificate") signed by the Borrower's chief financial officer or chiefexecutive officer showing the calculations and computations necessary todetermine compliance with this Agreement and stating that, to such officer'sknowledge, no Default or Unmatured Default exists, or if, to such officer'sknowledge, any Default or Unmatured Default exists, stating the nature andstatus thereof;

### (d)              As soon as possible and in anyevent within 10 days after a responsible officer of the Borrower knows that anyReportable Event has occurred with respect to any Plan, a statement, signed bythe chief financial officer of the Borrower, describing said Reportable Eventand the action which the Borrower proposes to take with respect thereto;

### (e)               As soon as possible and in anyevent within 10 days after receipt by an executive officer of the Borrower, acopy of (i) any notice or claim from any Governmental Authority to the effectthat the Borrower or any of its Subsidiaries is or may be liable to any Personas a result of the release by the Borrower, any of its Subsidiaries, or anyother Person of any Material of Environmental Concern into the environment,(ii) any notice of litigation or alleging any violation of any federal, stateor local environmental, health or safety law or regulation by the Borrower orany of its Subsidiaries, which would have a Material Adverse Effect, (iii) anynotice of any Lien on any Qualifying Unencumbered Project (other than PermittedLiens) or any Lien on any other Project (other than Permitted Liens) that wouldreasonably be expected to have a Material Adverse Effect, (iv) any notice ofdefault on Recourse Indebtedness and or on any Non-Recourse Indebtedness thatexceeds $25,000,000, (v) any notice of default on interest rate hedgeagreements, and (vi) any other default under any obligations of any Loan Partywould reasonably be expected to have a Material Adverse Effect;

### (f)                Prior to the incurrence of anyDefeasance Costs in connection with the defeasance or prepayment ofIndebtedness in excess of [$5,000,000], a written notice (to be delivered tothe Administrative Agent only) identifying such Indebtedness and the expecteddate of defeasance or prepayment and containing an estimate of the types andamounts of Defeasance Costs reasonably anticipated to be incurred in connectionwith such defeasance or prepayment;

### (g)               Promptly upon the furnishingthereof to the shareholders of the Borrower, copies of all financialstatements, reports and proxy statements so furnished; and

### (h)               Except for non-public materialinformation and information that is privileged pursuant to the attorney-clientand/or work product privileges, such other information (including, withoutlimitation, financial and non-financial information and a listing of capitalexpenditures, a rent roll, and such other information on any Project) as theAdministrative Agent or any Lender may from time to time reasonably request.

### 7.2              Use of Proceeds

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.  The Borrower mayuse the proceeds of the Advances to refinance existing Indebtedness, to provideworking capital, to support ongoing Projects, to repurchase outstanding CapitalStock of Borrower and to acquire additional Projects.  The Borrower will not,nor will it permit any Subsidiary to, use any of the proceeds of the Advances(i) to purchase or carry any "margin stock" (as defined in Regulation U) ifsuch usage could constitute a violation of Regulation U by any Lender,(ii) to fund any purchase of, or offer for, a controlling portion of theCapital Stock of any Person, unless the board of directors or other manager ofsuch Person has consented to such offer, or (iii) to make any Acquisition otherthan a Permitted Acquisition.

### 7.3              Notice of Default

.  The Borrower willgive, and will cause each of its Subsidiaries to give, prompt notice in writingto the Administrative Agent and the Lenders of the occurrence of any Default orUnmatured Default.

### 7.4              Conduct of Business

.  The Borrower willdo, and will cause each of its Subsidiaries (other than those whose businesseshave been discontinued) to do all things necessary to remain duly incorporatedor duly qualified, validly existing and in good standing as a real estateinvestment trust, corporation, limited liability company general partnership orlimited partnership, as the case may be, in its jurisdiction ofincorporation/formation (except with respect to permitted mergers and PermittedAcquisitions) and maintain all requisite authority to conduct its business ineach jurisdiction in which its business is conducted and to carry on andconduct their businesses in substantially the same manner as they are presentlyconducted where the failure to do so could reasonably be expected to have aMaterial Adverse Effect and, specifically, neither the Borrower nor itsSubsidiaries may undertake any business other than the acquisition,development, ownership, management, operation and leasing of multifamilyresidential properties, and ancillary businesses specifically related to suchtypes of properties, including without limitation its third party management,investment advisory, and painting businesses.

### 7.5              Taxes

.  The Borrower willpay, and will cause each of its Subsidiaries to pay, when due all taxes,assessments and governmental charges and levies upon them of their income,profits or Properties, except those which are being contested in good faith byappropriate proceedings and with respect to which adequate reserves have beenset aside, if and to the extent deemed reasonably necessary by Borrower.

### 7.6              Insurance.  

The Borrower will, andwill cause each of its Subsidiaries to, maintain insurance which is consistentwith the representation contained in Section 6.16 on all theirProperties and the Borrower will furnish to any Lender upon reasonable requestfull information as to the insurance carried.

### 7.7              Compliance with Laws

.  The Borrower will,and will cause each of its Subsidiaries to, comply with all laws, rules,regulations, orders, writs, judgments, injunctions, decrees or awards to whichthey may be subject, the violation of which could reasonably be expected tohave a Material Adverse Effect, if and to the extent deemed reasonablynecessary by Borrower.

### 7.8              Maintenance of Properties andEquipment

.  The Borrower will,and will cause each of its Subsidiaries to, do all things necessary tomaintain, preserve, protect and keep their respective Properties and equipmentin good repair, working order and condition, ordinary wear and tear excepted.

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### 7.9              Inspection

.  The Borrower will,and will cause each of its Subsidiaries to, permit the Lenders upon reasonablenotice and during normal business hours and subject to rights of tenants, bytheir respective representatives and agents, to inspect any of the Projects,corporate books and financial records of the Borrower and each of itsSubsidiaries, to examine and make copies of the books of accounts and otherfinancial records of the Borrower and each of its Subsidiaries, and to discussthe affairs, finances and accounts of the Borrower and each of its Subsidiarieswith executive officers thereof, and to be advised as to the same by, exceptfor non-public material information and information that is privileged pursuantto the attorney-client and/or work product privileges, their respectiveofficers at such reasonable times and intervals as the Lenders may designate.

### 7.10           Maintenance of Status

.  The Borrower shallat all times  maintain its status as a real estate investment trust incompliance with all applicable provisions of the Code relating to such status.

### 7.11           Dividends

.  The Borrower andits Subsidiaries shall be permitted to declare and pay dividends on theirCapital Stock from time to time, provided, however, that in noevent shall the Borrower declare or pay dividends on its Capital Stock (otherthan Preferred Dividends) or make distributions with respect thereto (otherthan Preferred Dividends), if such dividends and distributions paid withrespect to the most recent four (4) consecutive full fiscal quarters for whichfinancial results are available, in the aggregate for such period, would exceed95% of Adjusted Funds From Operations of the Borrower for such period. Notwithstanding the foregoing, the Borrower shall be permitted at all times to distributewhatever amount of dividends is necessary to maintain its tax status as a realestate investment trust.

### 7.12           No Change in Control

.  The Borrower willnot consent to a Change in Control.

### 7.13           Non-Real Estate Investments

.  Borrower shall notmake any acquisition of non-real estate related assets or service companieswithout the Administrative Agent's approval.  Purchases of computers,automobiles, furniture, office equipment and similar fixed assets used in thenormal course of business are permitted.

### 7.14           Major Transactions

.  Neither Borrowernor any other member of the Consolidated Group, without the prior writtenapproval of the Administrative Agent, will either (i) acquire in a singletransaction real estate assets which have a value in excess of 20% of the then-currentTotal Asset Value or (ii) dispose of in a single transaction real estate assetswhich comprise 10% or more of the then-current Total Asset Value.  

### 7.15           Acquisitions and Investments

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.  The Borrower willnot, nor will it permit any Subsidiary to, make or suffer to exist anyInvestments (including without limitation, loans and advances to, and otherInvestments in, Subsidiaries), or commitments therefor, or become a partner inany partnership or joint venture, or to make any Acquisition of any Person, except:

### (a)               Cash and Cash Equivalents;

### (b)              Investments in Projects, RealProperty Under Development, Undeveloped Land and First Mortgage Receivables,subject to the limits established in Section 7.22;

### (c)               Investments in existingSubsidiaries, Investments in Subsidiaries formed for the purpose of developingor acquiring Projects, and Investments in joint ventures and partnershipsengaged solely in the business of purchasing, developing, owning, operating,leasing and managing Projects;

### (d)              transactions permitted pursuant toSection 7.23; 

### (e)               Acquisitions of Persons whoseprimary operations consist of the ownership, development, operation andmanagement of multifamily residential properties; and

### (f)                Rate Management Transactionsrelated to hedging interest rates with respect to the Consolidated OutstandingIndebtedness or the Indebtedness of Investment Affiliates.

providedthat, after giving effect to such Acquisitions and Investments, Borrowercontinues to comply with all its covenants herein.  Acquisitions permittedpursuant to this Section 7.15 shall be deemed to be "PermittedAcquisitions".

### 7.16           Liens

.  The Borrower willnot, nor will it permit any of its Subsidiaries to, create, incur, or suffer toexist any Lien in, of or on the Property of the Borrower or any of itsSubsidiaries, except:

### (a)               Liens for taxes, assessments orgovernmental charges or levies on its Property if the same shall not at thetime be delinquent or thereafter can be paid without penalty, or are beingcontested in good faith and by appropriate proceedings and for which adequatereserves shall have been set aside on its books, if and to the extent deemedreasonably necessary by Borrower;

### (b)              Liens imposed by law, such ascarriers', warehousemen's and mechanics' liens and other similar liens arisingin the ordinary course of business which secure payment of obligations whichare being or will timely be contested in good faith by appropriate proceedingsand for which adequate reserves shall have been set aside on its books, if andto the extent deemed reasonably necessary by Borrower;

### (c)               Liens arising out of pledges ordeposits under workers' compensation laws, unemployment insurance, old agepensions, or other social security or retirement benefits, or similarlegislation;

### (d)              Easements, restrictions and suchother encumbrances or charges against real property as are of a naturegenerally existing with respect to properties of a similar character and whichdo not materially and adversely interfere with the use thereof in the businessof the Borrower or its Subsidiaries;

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### (e)               Liens on Projects to secure anyIndebtedness to the extent such Liens will not result in a Default in any ofBorrower's covenants herein.

Lienspermitted pursuant to this Section 7.16 shall be deemed to be "PermittedLiens".

### 7.17           Affiliates

.  The Borrower willnot, nor will it permit any of its Subsidiaries to, enter into any transaction(including, without limitation, the purchase or sale of any Property orservice) with, or make any payment or transfer to, any Affiliate which is not amember of the Consolidated Group except in the ordinary course of business andpursuant to the reasonable requirements of the Borrower's or such Subsidiary'sbusiness and upon fair and reasonable terms no less favorable to the Borroweror such Subsidiary than the Borrower or such Subsidiary would obtain in acomparable arms-length transaction.

### 7.18           Recourse Secured Indebtedness

.  Borrower will notallow, or permit any member of the Consolidated Group to allow, the aggregateoutstanding principal amount of Secured Indebtedness of the Consolidated Groupwhich is also Recourse Indebtedness to exceed $60,000,000 at any time.  Theamount of the Consolidated Group's Secured Indebtedness which is Non-RecourseIndebtedness shall be limited only by Section 7.20(a) and Section7.20(b).

### 7.19           Minimum Consolidated TangibleNet Worth.  

Borrower shall notpermit Consolidated Tangible Net Worth to be less than $334,938,331 pluseighty-five percent (85%) of the Net Proceeds of any Equity Issuance receivedafter the Agreement Execution Date.

### 7.20           Indebtedness and Cash Flow Covenants

.  The Borrower shallnot permit:

### (a)               The ratio of ConsolidatedOutstanding Indebtedness to Total Asset Value to be greater than 0.65:1 at theend of any fiscal quarter;

### (b)              The ratio of Consolidated AdjustedEBITDA to Consolidated Fixed Charges to be less than (i) 1.20:1 as of the endof any fiscal quarter ending on or prior to March 31, 2008, (ii) 1.30:1 as ofthe end of any fiscal quarter ending after March 31, 2008 and on or prior toMarch 31, 2009, and (iii) 1.40:1 as of the end of any fiscal quarter endingafter March 31, 2009; 

### (c)               The ratio of Unencumbered RealProperty Value to Consolidated Unsecured Indebtedness to be less than 2.00:1 atany time; and 

### (d)              The ratio of Unencumbered RealProperty Adjusted NOI to Consolidated Interest Expense on Consolidated UnsecuredIndebtedness as of the end of any fiscal quarter to be less than 2.40:1.

### 7.21           Environmental Matters

.  Borrower and itsSubsidiaries shall:

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### (a)               Comply with, and use allreasonable efforts to ensure compliance by all tenants and subtenants, if any,with, all applicable Environmental Laws and obtain and comply with andmaintain, any and all licenses, approvals, notifications, registrations orpermits required by applicable Environmental Laws, except to the extent thatfailure to do so could not be reasonably expected to have a Material AdverseEffect; provided that in no event shall the Borrower or its Subsidiaries berequired to modify the terms of leases, or renewals thereof, with existingtenants (i) at Projects owned by the Borrower or its Subsidiaries as of thedate hereof, or (ii) at Projects hereafter acquired by the Borrower or itsSubsidiaries as of the date of such acquisition, to add provisions to sucheffect.

### (b)              Conduct and complete allinvestigations, studies, sampling and testing, and all remedial, removal andother actions required under Environmental Laws and promptly comply in allmaterial respects with all lawful orders and directives of all GovernmentalAuthorities regarding Environmental Laws, except to the extent that (i) thesame are being contested in good faith by appropriate proceedings and thependency of such proceedings could not be reasonably expected to have aMaterial Adverse Effect, or (ii) the Borrower has determined in good faiththat contesting the same is not in the best interests of the Borrower and itsSubsidiaries and the failure to contest the same could not be reasonablyexpected to have a Material Adverse Effect.

### (c)               Defend, indemnify and holdharmless Administrative Agent and each Lender, and their respective officersand directors, from and against any claims, demands, penalties, fines,liabilities, settlements, damages, costs and expenses of whatever kind ornature known or unknown, contingent or otherwise, arising out of, or in any wayrelating to the violation of, noncompliance with or liability under anyEnvironmental Laws applicable to the operations of the Borrower, itsSubsidiaries or the Projects, or any orders, requirements or demands ofGovernmental Authorities related thereto, including, without limitation,attorney's and consultant's fees, investigation and laboratory fees, responsecosts, court costs and litigation expenses, except to the extent that any ofthe foregoing arise out of the gross negligence or willful misconduct of theparty seeking indemnification therefor.  This indemnity shall continue in fullforce and effect regardless of the termination of this Agreement.  

### (d)              Defend each suchindemnified party by counsel selected by Borrower, subject to the reasonableapproval of the indemnified party, promptly after notice of any claims madeagainst an indemnified party hereunder.

### 7.22           Permitted Investments

.

### (a)               The Borrower's Investment in RealProperty Under Development (with each asset valued in accordance with GAAP atcost, as incurred through the reporting date for construction in progress inthe most recent quarter of the Consolidated Group for which financial resultshave been reported) shall not at any time exceed ten percent (10%) of TotalAsset Value.

### (b)              The Borrower's Investment in Undeveloped   Land shall not at any time exceed five percent (5%) of Total Asset Value.

### (c)               The Borrower's Investment in FirstMortgage Receivables (with each asset valued at the lower of its acquisitioncost and its fair market value) shall not at any time exceed five percent (5%)of Total Asset Value.

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### (d)              The Borrower's aggregateInvestment in Investment Affiliates (valued at the greater of the cashinvestment in that entity by the Borrower or the portion of Total Asset Valueattributable to such entity or its assets as the case may be)****shall notat any time exceed ten percent (10%) of Total Asset Value.

### (e)               The aggregate Investment of theBorrower in the above items (a)-(d), in the aggregate and after eliminating anyduplication of Investments included in more than one of such items, shall notat any time exceed twenty-five percent (25%) of Total Asset Value.

### 7.23           Additional UnsecuredIndebtedness. 

Neither Borrower norany other member of the Consolidated Group shall incur any Indebtedness of arevolving nature other than this Facility.  Neither Borrower nor any othermember of the Consolidated Group shall incur any other non-revolving unsecuredIndebtedness other than Indebtedness which does not cause any violation of theprovisions of Section 7.20(c) or Section 7.20(d).  Future trustpreferred issuances will be permitted only to the extent they are expresslysubordinate to this Facility.  The Administrative Agent and its counsel havedetermined an intercreditor agreement is not required to confirm suchsubordination of Borrower's existing trust preferred Indebtedness.  

### 7.24           Limits on OwnershipEncumbrances. 

The Borrower will notallow, or permit any member of the Consolidated Group to allow, its direct orindirect ownership interests in any other member of the Consolidated Group orany Investment Affiliate to be encumbered to secure any Indebtedness, otherthan "mezzanine" Indebtedness of a member of the Consolidated Group providedthat such "mezzanine" Indebtedness is either (A) Non-Recourse Indebtednessincurred for the purpose of financing the construction and development of  anew Project  not to exceed $10,000,000, when aggregated with all otherconstruction and development "mezzanine" Indebtedness then outstanding orcommitted, so long as such Indebtedness is not cross-collateralized orcross-defaulted with other Indebtedness of any member of the Consolidated Groupor (B) created in connection with Indebtedness of a direct or indirectWholly-Owned Subsidiary of such member secured by a mortgage or deed of truston such Wholly-Owned Subsidiary's real Property and initially held by thelender under such secured Indebtedness or an Affiliate thereof. 

### ARTICLE VIIIDEFAULTS

Theoccurrence of any one or more of the following events shall constitute aDefault:

### 8.1              Nonpayment of any principal payment due hereunder or under any Note whendue.

### 8.2              Nonpayment of interest upon any Note or of any fee or other paymentObligations under any of the Loan Documents within five (5) Business Days afterwritten notice from Administrative Agent that the same has become due.

### 8.3              The breach of any of the terms orprovisions of Sections 7.2, 7.10, 7.11, 7.12, 7.18,7.19, 7.20, 7.22, 7.23, and 7.24. 

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### 8.4              Any representation or warranty made or deemed made by or on behalf ofthe Borrower or any of its Subsidiaries to the Lenders or the AdministrativeAgent under or in connection with this Agreement, or any material certificateor information delivered in connection with this Agreement or any other LoanDocument shall be materially false on the date as of which made, unless suchmatter is corrected within thirty (30) days after written notice of suchmaterial falsity.

### 8.5              The breach by the Borrower (other than a breach which constitutes aDefault under Section 8.1, 8.2, 8.3 or 8.4) ofany of the terms or provisions of this Agreement which is not remedied withinthirty (30) days after written notice to Borrower from the Administrative Agentor any Lender.

### 8.6              The default by the Borrower or any other member of the ConsolidatedGroup or any Investment Affiliate in the payment of any amount due under, orthe performance of any term, provision or condition contained in, any agreementwith respect to (A) any Recourse Indebtedness of the Borrower or any othermember of the Consolidated Group, or (B) any Non-Recourse Indebtedness of theBorrower or any other member of the Consolidated Group or any InvestmentAffiliate having an outstanding principal balance in excess of $25,000,000 inthe aggregate (collectively, "Material Indebtedness") or any other event shalloccur or condition exist, which causes or permits any such Material Indebtednessto be due and payable or required to be prepaid (other than by a regularlyscheduled payment) prior to the stated maturity thereof. 

### 8.7              Borrower or any member of the Borrower shall voluntarily (i) have anorder for relief entered with respect to it under the Federal bankruptcy lawsas now or hereafter in effect, (ii) make an assignment for the benefit ofcreditors, (iii) apply for, seek, consent to, or acquiesce in, the appointmentof a receiver, custodian, trustee, examiner, liquidator or similar official forit or any Substantial Portion of its Property, (iv) institute any proceedingseeking an order for relief under the Federal bankruptcy laws as now orhereafter in effect or seeking to adjudicate it as a bankrupt or insolvent, orseeking dissolution, winding up, liquidation, reorganization, arrangement,adjustment or composition of it or its debts under any law relating tobankruptcy, insolvency or reorganization or relief of debtors or fail to filean answer or other pleading denying the material allegations of any suchproceeding filed against it, (v) take any corporate action to authorize oreffect any of the foregoing actions set forth in this Section 8.7, (vi)fail to contest in good faith any appointment or proceeding described in Section 8.8or (vii) admit in writing its inability to pay its debts generally as theybecome due.

### 8.8              A receiver, trustee, examiner, liquidator or similar official shall beappointed for any member of the Consolidated Group or for any SubstantialPortion of the Property of any member of the Consolidated Group (other than areceiver in connection with the foreclosure of any Secured Indebtedness havingan outstanding principal balance of $25,000,000 or less) or a proceedingdescribed in Section 8.7(iv) shall be instituted against any member ofthe Consolidated Group and such appointment continues undischarged or suchproceeding continues undismissed or unstayed for a period of ninety (90)consecutive days.

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### 8.9              Any member of the Consolidated Group shall fail within sixty (60) daysto pay, bond or otherwise discharge any judgments or orders for the payment ofmoney in an amount which, when added to all other judgments or ordersoutstanding against Borrower, would exceed $10,000,000 in the aggregate inexcess of any insurance proceeds available to pay such judgments or orders,which have not been stayed on appeal or otherwise appropriately contested ingood faith.

### 8.10           Failure to remediate within the time period permitted by law orgovernmental order, after all administrative hearings and appeals have beenconcluded (or within a reasonable time in light of the nature of the problem ifno specific time period is so established), material environmental problems atProperties owned by the Borrower or any of its Subsidiaries or InvestmentAffiliates if the reasonably estimated costs of remediation are in excess of$10,000,000 in the aggregate.

### 8.11           The occurrence of any "Default" as defined in any Loan Document or thebreach of any of the terms, covenants, or provisions of any Loan Document,which default or breach continues beyond any period of grace therein provided.

### 8.12            

### 8.13           The Borrower, without obtaining consent of the Required Lenders,shall enter into any merger, consolidation, reorganization or liquidation ortransfer or otherwise dispose of all or substantially all of their Properties,unless (a) in the case of a merger or consolidation the Borrower is thesurviving entity in such merger or consolidation and (b) after giving effect tothe merger, the Borrower remains in compliance with the terms of the CreditAgreement, provided that any such action shall not constitute a Default unlessthe Borrower shall fail to reverse such action within sixty (60) days afterwritten notice from the Administrative Agent that such action constitutes aDefault hereunder.

### ARTICLEIXACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

### 9.1              Acceleration

.  If any Defaultdescribed in Section 8.7 or 8.8 occurs with respect to theBorrower, the obligations of the Lenders to make Loans and hereunder shallautomatically terminate and the Obligations shall immediately become due andpayable without any election or action on the part of the Administrative Agentor any Lender.  If any other Default occurs, so long as a Default existsLenders shall have no obligation to make any Loans and the Required Lenders, atany time prior to the date that such Default has been fully cured, maypermanently terminate the obligations of the Lenders to make Loans hereunderand declare the Obligations to be due and payable, or both, whereupon if theRequired Lenders elected to accelerate (i) the Obligations shall becomeimmediately due and payable, without presentment, demand, protest or notice ofany kind, all of which the Borrower hereby expressly waives and (ii) if anyautomatic or optional acceleration has occurred, the Administrative Agent, asdirected by the Required Lenders (or if no such direction is given within 30days after a request for direction, as the Administrative Agent deems in thebest interests of the Lenders, in its sole discretion), shall use its goodfaith efforts to collect, including without limitation, by filing anddiligently pursuing judicial action, all amounts owed by the Borrower and anySubsidiary Guarantor under the Loan Documents.

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In addition to theforegoing, following the occurrence of a Default and so long as any FacilityLetter of Credit has not been fully drawn and has not been cancelled or expiredby its terms, upon demand by the Administrative Agent the Borrower shalldeposit in the Letter of Credit Collateral Account cash in an amount equal tothe aggregate undrawn face amount of all outstanding Facility Letters of Creditand all fees and other amounts due or which may become due with respectthereto.  The Borrower shall have no control over funds in the Letter of CreditCollateral Account and shall not be entitled to receive any interest thereon. Such funds shall be promptly applied by the Administrative Agent to reimbursethe Issuing Bank for drafts drawn from time to time under the Facility Lettersof Credit and associated issuance costs and fees.  Such funds, if any,remaining in the Letter of Credit Collateral Account following the payment ofall Obligations in full shall, unless the Administrative Agent is otherwisedirected by a court of competent jurisdiction, be promptly paid over to theBorrower.

If, within 10 days afteracceleration of the maturity of the Obligations or termination of theobligations of the Lenders to make Loans hereunder as a result of any Default(other than any Default as described in Section 8.7 or 8.8 withrespect to the Borrower) and before any judgment or decree for the payment ofthe Obligations due shall have been obtained or entered, all of the Lenders (intheir sole discretion) shall so direct, the Administrative Agent shall, bynotice to the Borrower, rescind and annul such acceleration and/or termination.

### 9.2              Amendments

.  Subject to theprovisions of this Article VIII the Required Lenders (or theAdministrative Agent with the consent in writing of the Required Lenders) andthe Borrower may enter into agreements supplemental hereto for the purpose ofadding or modifying any provisions to the Loan Documents or changing in anymanner the rights of the Lenders or the Borrower hereunder or waiving anyDefault hereunder; provided, however, that no such supplemental agreement orwaiver shall, without the consent of all Lenders:

### (a)               Extend the Facility TerminationDate (except as provided in Section 2.22), or forgive all or any portionof the principal amount of any Loan or accrued interest thereon or the CommitmentFee, reduce the Applicable Margins (or modify any definition herein which wouldhave the effect of reducing the Applicable Margins) or the interest rate orunderlying interest rate options or extend the time of payment of any suchprincipal, interest or facility fees.

### (b)              Modify Section 7.20(c) or Section7.20(d) or diminish any of the requirements for a Project to qualify as aQualifying Unencumbered Project (or modify any other definitions herein whichwould have the effect of diminishing such requirements).

### (c)               Change the definition of RequiredLenders.

### (d)              Increase the Aggregate Commitment.

### (e)               Permit the Borrower to assign itsrights under this Agreement.

### (f)                Amend Sections 9.1, 9.2,or 12.2.

Noamendment of any provision of this Agreement relating to the AdministrativeAgent shall be effective without the written consent of the AdministrativeAgent.

### 9.3              Preservation of Rights

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.  No delay oromission of the Lenders or the Administrative Agent to exercise any right underthe Loan Documents shall impair such right or be construed to be a waiver ofany Default or an acquiescence therein, and the making of a Loannotwithstanding the existence of a Default or the inability of the Borrower tosatisfy the conditions precedent to such Loan shall not constitute any waiveror acquiescence.  Any single or partial exercise of any such right shall notpreclude other or further exercise thereof or the exercise of any other right,and no waiver, amendment or other variation of the terms, conditions orprovisions of the Loan Documents whatsoever shall be valid unless in writingsigned by the Lenders required pursuant to Section 9.2, and thenonly to the extent in such writing specifically set forth.  All remediescontained in the Loan Documents or by law afforded shall be cumulative and allshall be available to the Administrative Agent and the Lenders until theObligations have been paid in full.

### 9.4              Insolvency of Borrower

.  In the event of theinsolvency of the Borrower, the Lenders shall have no obligation to makefurther disbursements of the Facility, and the outstanding principal balance ofthe Facility, including accrued and unpaid interest thereon, shall beimmediately due and payable.

### ARTICLEXGENERAL PROVISIONS

### 10.1           Survival of Representations

.  All representationsand warranties of the Borrower contained in this Agreement shall survivedelivery of the Notes and the making of the Loans herein contemplated.

### 10.2           Governmental Regulation.  

Anything contained inthis Agreement to the contrary notwithstanding, no Lender shall be obligated toextend credit to the Borrower in violation of any limitation or prohibitionprovided by any applicable statute or regulation.

### 10.3           No Plan Assets.    None of thefunds to be advanced by the Lenders under this Agreement will constitute "planassets" within the meaning of ERISA, the Code and the respective regulationspromulgated thereunder.  

### 10.4           Headings

.  Section headings inthe Loan Documents are for convenience of reference only, and shall not governthe interpretation of any of the provisions of the Loan Documents.

### 10.5           Entire Agreement

.  The Loan Documentsembody the entire agreement and understanding among the Borrower, theAdministrative Agent and the Lenders and supersede all prior commitments,agreements and understandings among the Borrower, the Administrative Agent andthe Lenders relating to the subject matter thereof.

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### 10.6           Several Obligations; Benefitsof this Agreement

.  The respectiveobligations of the Lenders hereunder are several and not joint and no Lendershall be the partner or agent of any other (except to the extent to which theAdministrative Agent is authorized to act as such).  The failure of any Lenderto perform any of its obligations hereunder shall not relieve any other Lenderfrom any of its obligations hereunder.  This Agreement shall not be construedso as to confer any right or benefit upon any Person other than the parties tothis Agreement and their respective successors and assigns.

### 10.7           Expenses; Indemnification

.  The Borrower shallreimburse the Administrative Agent for any reasonable costs and actual documented(reasonable evidence shall be provided for any expense over $500) out-of-pocketexpenses (including, without limitation, all reasonable fees for consultantsand fees and reasonable expenses for attorneys for the Administrative Agent,which attorneys may not be employees of the Administrative Agent) paid orincurred by the Administrative Agent in connection with the amendment,modification, and enforcement of the Loan Documents.  The Borrower also agreesto reimburse the Administrative Agent and the Lenders for any reasonable costs,external charges and out-of-pocket expenses (including, without limitation, allfees and reasonable expenses for attorneys for the Administrative Agent and theLenders, which attorneys may not be employees of the Administrative Agent orthe Lenders) paid or incurred by the Administrative Agent or any Lender inconnection with the collection and enforcement of the Loan Documents(including, without limitation, any workout).  The Borrower further agrees toindemnify the Administrative Agent, each Lender and their Affiliates, and theirdirectors and officers against all losses, claims, damages, penalties,judgments, liabilities and expenses (including, without limitation, allreasonable fees and reasonable expenses for attorneys of the indemnifiedparties, all reasonable expenses of litigation or preparation therefor whetheror not the Administrative Agent, or any Lender is a party thereto) which any ofthem may pay or incur arising out of or relating to this Agreement, the other LoanDocuments, the Projects, the transactions contemplated hereby or the direct orindirect application or proposed application of the proceeds of any Loanhereunder, except to the extent that any of the foregoing arise out of thegross negligence or willful misconduct of the party seeking indemnificationtherefor.  The obligations of the Borrower under this Section shall survive thetermination of this Agreement.  Defense of any suchindemnified party shall be provided by counsel selected by Borrower, subject tothe reasonable approval of the indemnified party, promptly after notice toBorrower of the indemnified claims.

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### 10.8           Electronic Document Deliveries. Documents required to be delivered pursuant to theLoan Documents shall be delivered by electronic communication and delivery,including, the Internet, e-mail or intranet websites  to which theAdministrative Agent and each Lender have access (including a commercial,third-party website such as www.Edgar.com <http://www.Edgar.com> or awebsite sponsored or hosted by the Administrative Agent or the Borrower)provided that (A) the foregoing shall not apply to notices to any Lender (orthe Issuing Bank) pursuant to Article II and (B) the Lender has not notifiedthe Administrative Agent or Borrower that it cannot or does not want to receiveelectronic communications.   The Administrative Agent or the Borrower may, inits discretion, agree to accept notices and other communications to ithereunder by electronic delivery pursuant to procedures approved by it for all orparticular notices or communications.  Documents or notices deliveredelectronically shall be deemed to have been delivered twenty-four (24) hoursafter the date and time on which the Administrative Agent or Borrower postssuch documents or the documents become available on a commercial website andthe Administrative Agent or Borrower notifies each Lender of said posting andprovides a link thereto provided if such notice or other communication is notsent or posted during the normal business hours of the recipient, said postingdate and time shall be deemed to have commenced as of  9:00 a.m. on the openingof business on the next business day for the recipient.  Notwithstandinganything contained herein, in every instance the Borrower shall be required to providepaper copies of the Compliance Certificate to the Administrative Agent andshall deliver paper copies of any documents to the Administrative Agent or toany Lender that requests such paper copies until a written request to ceasedelivering paper copies is given by the Administrative Agent or such Lender. Except for the Compliance Certificate Provision,  the Administrative Agentshall have no obligation to request the delivery of or to maintain paper copiesof the documents delivered electronically, and in any event shall have noresponsibility to monitor compliance by the Borrower with any such request fordelivery.  Each Lender shall be solely responsible for requesting delivery toit of paper copies and maintaining its paper or electronic documents. 

### 10.9           Accounting.  

Except as provided tothe contrary herein, all accounting terms used herein shall be interpreted andall accounting determinations hereunder shall be made in accordance with GAAP.

### 10.10       Severability of Provisions

.  Any provision inany Loan Document that is held to be inoperative, unenforceable, or invalid inany jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,or invalid without affecting the remaining provisions in that jurisdiction orthe operation, enforceability, or validity of that provision in any otherjurisdiction, and to this end the provisions of all Loan Documents are declaredto be severable.

### 10.11       Nonliability of Lenders.  

The relationshipbetween the Borrower, on the one hand, and the Lenders and the AdministrativeAgent, on the other, shall be solely that of borrower and lender.  Neither theAdministrative Agent nor any Lender shall have any fiduciary responsibilitiesto the Borrower.  Neither the Administrative Agent nor any Lender undertakesany responsibility to the Borrower to review or inform the Borrower of anymatter in connection with any phase of the Borrower's business or operations.

###  

### 10.12        CHOICE OF LAW

.  THE LOAN DOCUMENTS(OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALLBE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OFCONFLICTS) OF THE STATE OF OHIO, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLETO NATIONAL BANKS.

### 10.13       CONSENT TO JURISDICTION

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.  THE BORROWER HEREBYIRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATESFEDERAL OR OHIO STATE COURT SITTING IN CLEVELAND IN ANY ACTION OR PROCEEDINGARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBYIRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAYBE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTIONIT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION ORPROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENTFORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANYLENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHERJURISDICTION.  ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THEADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENTOR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISINGOUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLYIN A COURT IN CLEVELAND, OHIO.

### 10.14       WAIVER OF JURY TRIAL

.  THE BORROWER, THEADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIALPROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING INTORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, ORCONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

### ARTICLEXITHE ADMINISTRATIVE AGENT

### 11.1           Appointment

.  National City Bank,is hereby appointed Administrative Agent hereunder and under each other LoanDocument, and each of the Lenders irrevocably authorizes the AdministrativeAgent to act as the agent of such Lender.  The Administrative Agent agrees toact as such upon the express conditions contained in this Article X. Notwithstanding the use of the defined term "Administrative Agent," it isexpressly understood and agreed that the Administrative Agent shall not haveany fiduciary responsibilities to any Lender by reason of this Agreement or anyother Loan Document and that the Administrative Agent is merely acting as thecontractual representative of the Lenders with only those duties as areexpressly set forth in this Agreement and the other Loan Documents.  In itscapacity as the Lenders' contractual representative, the Administrative Agent(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) isa "representative" of the Lenders within the meaning of the term "securedparty" as defined in the Ohio Uniform Commercial Code and (iii) is acting as anindependent contractor, the rights and duties of which are limited to thoseexpressly set forth in this Agreement and the other Loan Documents.  Each ofthe Lenders hereby agrees to assert no claim against the Administrative Agenton any agency theory or any other theory of liability for breach of fiduciaryduty, all of which claims each Lender hereby waives.

### 11.2           Powers

.  The AdministrativeAgent shall have and may exercise such powers under the Loan Documents as arespecifically delegated to the Administrative Agent by the terms of eachthereof, together with such powers as are reasonably incidental thereto.  TheAdministrative Agent shall have no implied duties to the Lenders, or anyobligation to the Lenders to take any action thereunder except any actionspecifically provided by the Loan Documents to be taken by the AdministrativeAgent.

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### 11.3           General Immunity

.  Neither theAdministrative Agent nor any of its directors, officers, agents or employeesshall be liable to the Borrower, the Lenders or any Lender for (i) any actiontaken or omitted to be taken by it or them hereunder or under any other LoanDocument or in connection herewith or therewith except for its or their owngross negligence or willful misconduct; or (ii) any determination by theAdministrative Agent that compliance with any law or any governmental orquasi-governmental rule, regulation, order, policy, guideline or directive(whether or not having the force of law) requires the Advances and Commitmentshereunder to be classified as being part of a "highly leveraged transaction".

### 11.4           No Responsibility for Loans,Recitals, etc.

 Neither theAdministrative Agent nor any of its directors, officers, agents or employeesshall be responsible for or have any duty to ascertain, inquire into, or verify(i) any statement, warranty or representation made in connection with any LoanDocument or any borrowing hereunder; (ii) the performance or observance of anyof the covenants or agreements of any obligor under any Loan Document,including, without limitation, any agreement by an obligor to furnishinformation directly to each Lender; (iii) the satisfaction of any conditionspecified in Article IV, except receipt of items required to bedelivered to the Administrative Agent; (iv) the validity, effectiveness orgenuineness of any Loan Document or any other instrument or writing furnishedin connection therewith; (v) the value, sufficiency, creation, perfection, orpriority of any interest in any collateral security; or (vi) the financialcondition of the Borrower or any Subsidiary Guarantor.  Except as otherwisespecifically provided herein, the Administrative Agent shall have no duty todisclose to the Lenders information that is not required to be furnished by theBorrower to the Administrative Agent at such time, but is voluntarily furnishedby the Borrower to the Administrative Agent (either in its capacity as AdministrativeAgent or in its individual capacity).

### 11.5           Action on Instructions ofLenders

.  The AdministrativeAgent shall in all cases be fully protected in acting, or in refraining fromacting, hereunder and under any other Loan Document in accordance with writteninstructions signed by the required percentage of the Lenders needed to takesuch action or refrain from taking such action, and such instructions and anyaction taken or failure to act pursuant thereto shall be binding on all of theLenders.  The Lenders hereby acknowledge that the Administrative Agent shall beunder no duty to take any discretionary action permitted to be taken by itpursuant to the provisions of this Agreement or any other Loan Document unlessit shall be requested in writing to do so by the Required Lenders.  TheAdministrative Agent shall be fully justified in failing or refusing to takeany action hereunder and under any other Loan Document unless it shall first beindemnified to its satisfaction by the Lenders pro rata against any and allliability, cost and expense that it may incur by reason of taking or continuingto take any such action.

### 11.6           Employment of Agents andCounsel

.  The AdministrativeAgent may execute any of its duties as Administrative Agent hereunder and underany other Loan Document by or through employees, agents, and attorneys-in-factand shall not be answerable to the Lenders, except as to money or securitiesreceived by it or its authorized agents, for the default or misconduct of anysuch agents or attorneys-in-fact selected by it with reasonable care.  TheAdministrative Agent shall be entitled to advice of counsel concerning allmatters pertaining to the agency hereby created and its duties hereunder andunder any other Loan Document.

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### 11.7           Reliance on Documents; Counsel

.  The AdministrativeAgent shall be entitled to rely upon any Note, notice, consent, certificate,affidavit, letter, telegram, statement, paper or document believed by it to begenuine and correct and to have been signed or sent by the proper person orpersons, and, in respect to legal matters, upon the opinion of counsel selectedby the Administrative Agent, which counsel may be employees of theAdministrative Agent.

### 11.8           Administrative Agent'sReimbursement and Indemnification

.  The Lenders agreeto reimburse and indemnify the Administrative Agent ratably in proportion totheir respective Commitments (i) for any amounts not reimbursed by the Borrowerfor which the Administrative Agent is entitled to reimbursement by the Borrowerunder the Loan Documents, (ii) for any other expenses incurred by theAdministrative Agent on behalf of the Lenders, in connection with thepreparation, execution, delivery, administration and enforcement of the LoanDocuments, if not paid by Borrower and (iii) for any liabilities, obligations,losses, damages, penalties, actions, judgments, suits, costs, expenses ordisbursements of any kind and nature whatsoever which may be imposed on,incurred by or asserted against the Administrative Agent in any way relating toor arising out of the Loan Documents or any other document delivered inconnection therewith or the transactions contemplated thereby (includingwithout limitation, for any such amounts incurred by or asserted against theAdministrative Agent in connection with any dispute between the AdministrativeAgent and any Lender or between two or more of the Lenders), or the enforcementof any of the terms thereof or of any such other documents, provided that noLender shall be liable for any of the foregoing to the extent they arise fromthe gross negligence or willful misconduct or a breach of the AdministrativeAgent's express obligations and undertakings to the Lenders.  The obligationsof the Lenders and the Administrative Agent under this Section 11.8shall survive payment of the Obligations and termination of this Agreement.

### 11.9           Rights as a Lender

.  In the event theAdministrative Agent is a Lender, the Administrative Agent shall have the samerights and powers hereunder and under any other Loan Document as any Lender andmay exercise the same as though it were not the Administrative Agent, and theterm "Lender" or "Lenders" shall, at any time when the Administrative Agent isa Lender, unless the context otherwise indicates, include the AdministrativeAgent in its individual capacity.  The Administrative Agent may accept depositsfrom, lend money to, and generally engage in any kind of trust, debt, equity orother transaction, in addition to those contemplated by this Agreement or anyother Loan Document, with the Borrower or any of its Subsidiaries in which theBorrower or such Subsidiary is not restricted hereby from engaging with anyother Person.

### 11.10       Lender Credit Decision

.  Each Lenderacknowledges that it has, independently and without reliance upon theAdministrative Agent or any other Lender and based on the financial statementsprepared by the Borrower and such other documents and information as it hasdeemed appropriate, made its own credit analysis and decision to enter intothis Agreement and the other Loan Documents.  Each Lender also acknowledgesthat it will, independently and without reliance upon the Administrative Agentor any other Lender and based on such documents and information as it shalldeem appropriate at the time, continue to make its own credit decisions in takingor not taking action under this Agreement and the other Loan Documents.

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### 11.11        Successor Administrative Agent

.  Except as otherwiseprovided below, National City Bank shall at all times serve as theAdministrative Agent during the term of this Facility.  The AdministrativeAgent may resign at any time by giving written notice thereof to the Lendersand the Borrower, such resignation to be effective upon the appointment of asuccessor Administrative Agent.  If the Administrative Agent has been grosslynegligent in the performance of its obligations hereunder, the AdministrativeAgent may be removed at any time by written notice received by theAdministrative Agent from all other Lenders, such removal to be effective onthe date specified by the other Lenders.  Upon any such resignation or removal,the Required Lenders, with the reasonable approval of the Borrower (as long asno Default has occurred and is then continuing), shall appoint, on behalf ofthe Borrower and the Lenders, a successor Administrative Agent.  If nosuccessor Administrative Agent shall have been so appointed by the RequiredLenders within thirty days after the resigning Administrative Agent's givingnotice of its intention to resign, then the resigning Administrative Agentshall appoint, on behalf of the Borrower and the Lenders, a successorAdministrative Agent.  Notwithstanding the previous sentence, theAdministrative Agent may at any time without the consent of the Borrower or anyLender, appoint any of its Affiliates which is a commercial bank as a successorAdministrative Agent hereunder.  No successor Administrative Agent shall bedeemed to be appointed hereunder until such successor Administrative Agent hasaccepted the appointment.  Any such successor Administrative Agent shall be a commercialbank having capital and retained earnings of at least $500,000,000.  Upon theacceptance of any appointment as Administrative Agent hereunder by a successorAdministrative Agent, such successor Administrative Agent shall thereuponsucceed to and become vested with all the rights, powers, privileges and dutiesof the resigning or removed Administrative Agent.  Upon the effectiveness ofthe resignation or removal of the Administrative Agent, the resigning orremoved Administrative Agent shall be discharged from its duties andobligations hereunder and under the Loan Documents.  After the effectiveness ofthe resignation or removal of an Administrative Agent, the provisions of this ArticleX shall continue in effect for the benefit of such Administrative Agent inrespect of any actions taken or omitted to be taken by it while it was actingas the Administrative Agent hereunder and under the other Loan Documents.

### 11.12       Notice of Defaults

.  If a Lender becomesaware of a Default or Unmatured Default, such Lender shall notify theAdministrative Agent of such fact provided that the failure to give such noticeshall not create liability on the part of a Lender.  Upon receipt of suchnotice that a Default or Unmatured Default has occurred, the Administrative Agentshall promptly notify each of the Lenders of such fact.

### 11.13       Requests for Approval

.  If theAdministrative Agent requests in writing the consent or approval of a Lender,such Lender shall respond and either approve or disapprove definitively inwriting to the Administrative Agent within ten (10) Business Days (or sooner ifsuch notice specifies a shorter period for responses based on AdministrativeAgent's good faith determination that circumstances exist warranting itsrequest for an earlier response) after such written request from theAdministrative Agent.  If the Lender does not so respond, that Lender shall bedeemed to have approved the request.

### 11.14       Defaulting Lenders

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.  At such time as aLender becomes a Defaulting Lender, such Defaulting Lender's right to vote onmatters which are subject to the consent or approval of the Required Lenders,each affected Lender or all Lenders shall be immediately suspended until suchtime as the Lender is no longer a Defaulting Lender, except that the amount ofthe Commitment of the Defaulting Lender may not be changed without itsconsent.  If a Defaulting Lender has failed to fund its pro rata share of anyAdvance and until such time as such Defaulting Lender subsequently funds itspro rata share of such Advance, all Obligations owing to such Defaulting Lenderhereunder shall be subordinated in right of payment, as provided in thefollowing sentence, to the prior payment in full of all principal of, intereston and fees relating to the Loans funded by the other Lenders in connectionwith any such Advance in which the Defaulting Lender has not funded its prorata share (such principal, interest and fees being referred to as "SeniorLoans" for the purposes of this section).  All amounts paid by Borrower or theSubsidiary Guarantors and otherwise due to be applied to the Obligations owingto such Defaulting Lender pursuant to the terms hereof shall be distributed bythe Administrative Agent to the other Lenders in accordance with theirrespective pro rata shares (recalculated for the purposes hereof to exclude theDefaulting Lender) until all Senior Loans have been paid in full provided,however, in no event will any such distribution to the other Lenders give riseto any liability of the Borrower to the Defaulting Lender.  After the SeniorLoans have been paid in full equitable adjustments will be made in connectionwith future payments by the Borrower to the extent a portion of the SeniorLoans had been repaid with amounts that otherwise would have been distributedto a Defaulting Lender but for the operation of this Section 11.14. This provision governs only the relationship among the Administrative Agent,each Defaulting Lender and the other Lenders; nothing hereunder shall limit theobligation of the Borrower to repay all Loans in accordance with the terms ofthis Agreement.  The provisions of this section shall apply and be effectiveregardless of whether a Default occurs and is continuing, and notwithstanding(i) any other provision of this Agreement to the contrary, (ii) any instructionof the Borrower as to its desired application of payments or (iii) thesuspension of such Defaulting Lender's right to vote on matters which aresubject to the consent or approval of the Required Lenders or all Lenders.

### ARTICLEXIISETOFF; RATABLE PAYMENTS

### 12.1           Setoff

.  In addition to, andwithout limitation of, any rights of the Lenders under applicable law, if theBorrower becomes insolvent, or any Default occurs and is continuing, any andall deposits (including all account balances, whether provisional or final andwhether or not collected or available) and any other Indebtedness at any timeheld or owing by any Lender or any of its Affiliates to or for the credit oraccount of the Borrower may be offset and applied toward the payment of theObligations owing to such Lender at any time prior to the date that suchDefault has been fully cured, whether or not the Obligations, or any parthereof, shall then be due, provided that no Lender shall take such an offset ifsuch action could reasonably be deemed to constitute an election of remediesunder this Agreement that would in any way limit or impair any of the otherrights and remedies of the Administrative Agent and other Lenders hereunderwith respect to such Default. 

### 12.2           Ratable Payments

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.  If any Lender, whetherby setoff or otherwise, has payment made to it upon its Loans (other thanpayments received pursuant to Sections 4.1, 4.2, 4.4 or 4.5)in a greater proportion than that received by any other Lender, such Lenderagrees, promptly upon demand, to purchase a portion of the Loans held by theother Lenders so that after such purchase each Lender will hold its ratableproportion of Loans.  If any Lender, whether in connection with setoff oramounts which might be subject to setoff or otherwise, receives collateral orother protection for its Obligations or such amounts which may be subject tosetoff, such Lender agrees, promptly upon demand, to take such action necessarysuch that all Lenders share in the benefits of such collateral ratably inproportion to their Loans.  In case any such payment is disturbed by legalprocess, or otherwise, appropriate further adjustments shall be made.

### ARTICLEXIIIBENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

### 13.1           Successors and Assigns

.  The terms andprovisions of the Loan Documents shall be binding upon and inure to the benefitof the Borrower and the Lenders and their respective permitted successors andassigns, except that (i) the Borrower shall not have the right to assign itsrights or obligations under the Loan Documents and (ii) any assignment by anyLender must be made in compliance with Section 13.3.  The partiesto this Agreement acknowledge that clause (ii) of this Section 13.1relates only to absolute assignments and does not prohibit assignments creatingsecurity interests, including, without limitation, (x) any pledge or assignmentby any Lender of all or any portion of its rights under this Agreement and anyNote to a Federal Reserve Bank or (y) in the case of a Lender which is a fund,any pledge or assignment of all or any portion of its rights under thisAgreement and any Note to its trustee in support of its obligations to itstrustee; *provided, however,*that no such pledge or assignment creating asecurity interest shall release the transferor Lender from its obligations hereunderunless and until the parties thereto have complied with the provisions of Section13.3.  The Administrative Agent and Borrower may treat the Person whichmade any Loan or which holds any Note as the owner thereof for all purposeshereof unless and until such Person complies with Section 13.3; *provided,however,* that the Administrative Agent and Borrower may in its discretion(but shall not be required to) follow instructions from the Person which madeany Loan or which holds any Note to direct payments relating to such Loan orNote to another Person.  Any assignee of the rights to any Loan or any Noteagrees by acceptance of such assignment to be bound by all the terms andprovisions of the Loan Documents.  Any request, authority or consent of any Person,who at the time of making such request or giving such authority or consent isthe owner of the rights to any Loan (whether or not a Note has been issued inevidence thereof), shall be conclusive and binding on any subsequent holder orassignee of the rights to such Loan.

### 13.2           Participations.

### (a)               Permitted Participants; Effect.  Any Lender may, in the ordinary course of itsbusiness and in accordance with applicable law, at any time sell to one or morebanks, financial institutions, pension funds, or any other funds or entities ("Participants")participating interests in any Loan owing to such Lender, any Note held by suchLender, any Commitment of such Lender or any other interest of such Lenderunder the Loan Documents.  In the event of any such sale by a Lender ofparticipating interests to a Participant, such Lender's obligations under theLoan Documents shall remain unchanged, such Lender shall remain solelyresponsible to the other parties hereto for the performance of suchobligations, such Lender shall remain the holder of any such Note for allpurposes under the Loan Documents, all amounts payable by the Borrower underthis Agreement shall be determined as if such Lender had not sold suchparticipating interests, and the Borrower and the Administrative Agent shallcontinue to deal solely and directly with such Lender in connection with suchLender's rights and obligations under the Loan Documents.  Any Lender sellingsuch participation interests in the Loan to any Participant shall remain theparty entitled to enforce Borrower's obligations arising under Article 4 andBorrower shall have no liability whatsoever to any Participants under suchArticle 4.

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### (b)              Voting Rights.  Each Lender shall retain the sole rightto approve, without the consent of any Participant, any amendment, modificationor waiver of any provision of the Loan Documents other than any amendment,modification or waiver with respect to any Loan or Commitment in which suchParticipant has an interest which would require consent of all the Lenderspursuant to the terms of Section 9.2 or of any other Loan Document.

### (c)               Benefit of Setoff.  The Borrower agrees that eachParticipant which has previously advised the Borrower in writing of itspurchase of a participation in a Lender's interest in its Loans shall be deemedto have the right of setoff provided in Section 12.1 in respect ofits participating interest in amounts owing under the Loan Documents to thesame extent as if the amount of its participating interest were owing directlyto it as a Lender under the Loan Documents.  Each Lender shall retain the rightof setoff provided in Section 12.1 with respect to the amount ofparticipating interests sold to each Participant, provided that such Lender andParticipant may not each setoff amounts against the same portion of theObligations, so as to collect the same amount from the Borrower twice.  TheLenders agree to share with each Participant, and each Participant, byexercising the right of setoff provided in Section 12.1, agrees to sharewith each Lender, any amount received pursuant to the exercise of its right ofsetoff, such amounts to be shared in accordance with Section 12.2 as ifeach Participant were a Lender.

### 13.3           Assignments.

### (a)               Permitted Assignments.  Any Lender may, in the ordinary course of its businessand in accordance with applicable law, at any time assign (i) to any of suchLender's affiliates or, (ii) with the consent of the Administrative Agent, toone or more banks, financial institutions or pension funds, or, (iii) with theprior approval of both the Borrower and the Administrative Agent, to any otherentity having capital and retained earnings of at least $500,000,000 ("Purchasers")all or any portion of its rights and obligations under the Loan Documents,provided that any assignment of only a portion of such rights and obligationsshall be in an amount not less than $5,000,000.  Notwithstanding the foregoing,no approval of the Borrower shall be required for any such assignment if aDefault has occurred and is then continuing.  Such assignment shall besubstantially in the form of Exhibit D hereto or in such other form asmay be agreed to by the parties thereto.  The consent of the AdministrativeAgent shall be required prior to an assignment becoming effective with respectto a Purchaser which is not a Lender or an Affiliate thereof.  Any suchrequired consent of Borrower or Administrative Agent shall not be unreasonablywithheld or delayed.

                                                                             62

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13.4           Dissemination of Information

The Borrowerauthorizes each Lender to disclose to any Participant or Purchaser or any otherPerson acquiring an interest in the Loan Documents by operation of law (each a"Transferee") and any prospective Transferee any and all information insuch Lender's possession concerning the creditworthiness of the Borrower andits Subsidiaries, subject to Section 10.11 of this Agreement.13.5           Tax Treatment.  

If any interest in anyLoan Document is transferred to any Transferee which is organized under thelaws of any jurisdiction other than the United States or any State thereof, thetransferor Lender shall cause such Transferee, concurrently with theeffectiveness of such transfer, to comply with the provisions of Section 4.5.

### ARTICLEXIVNOTICES

### 14.1           Giving Notice.  

All notices and othercommunications provided to any party hereto under this Agreement or any otherLoan Document shall be in writing or by telex or by facsimile and addressed ordelivered to such party at its address set forth below its signature hereto orat such other address (or to counsel for such party) as may be designated bysuch party in a notice to the other parties.  Any notice, if mailed andproperly addressed with postage prepaid, shall be deemed given when received;any notice, if transmitted by telex or facsimile, shall be deemed given whentransmitted (answerback confirmed in the case of telexes).

### 14.2           Change of Address.  

The Borrower, theAdministrative Agent and any Lender may each change the address for service ofnotice upon it by a notice in writing to the other parties hereto.

### ARTICLEXVPATRIOT ACT

Each Lender hereby notifies theBorrower that pursuant to the requirements of the USA Act (Title III of Pub. L.107-56 (signed into law on October 26, 2001) (the "Act"), it is required toobtain, verify and record information that identifies the Borrower, whichinformation includes the name and address of the Borrower and other informationthat will allow such Lender to identify the Borrower in accordance with theAct.  The Borrower agrees to cooperate with each Lender and provide true,accurate and complete information to such Lender in response to any suchrequest.

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### ARTICLEXVICOUNTERPARTS

ThisAgreement may be executed in any number of counterparts, all of which takentogether shall constitute one agreement, and any of the parties hereto mayexecute this Agreement by signing any such counterpart.  This Agreement shallbe effective when it has been executed by the Borrower, the AdministrativeAgent and the Lenders and each party has notified the Administrative Agent bytelex or telephone, that it has taken such action.

*(Remainder of page intentionally leftblank.)*

                                                                             64

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INWITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent haveexecuted this Agreement as of the date first above written.

ASSOCIATED ESTATES REALTY CORPORATION, 

an Ohio corporation

            By:       /s/ Jeffrey I. Friedman

            Name:  Jeffrey I. Friedman

            Title:     President

1 AEC Parkway

Richmond Heights, Ohio  44143

Attention:  Chief Financial Officer &Legal Department

Phone:  216-261-3902

Facsimile:  216-797-8779

With a copy to:

Greenberg Traurig, LLP  77 West Wacker Drive  Chicago, Illinois  60601

Attention:  Michael T. FishmanPhone:  312- 476-5075Fax:  312-456-8435

A-1

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COMMITMENT:                                              NATIONALCITY BANK, 

$30,000,000                                                       Individuallyand as Administrative Agent

            By:       /s/Martin D. Rodriguez

            Name:  Martin D. Rodriguez

            Title:     VicePresident

                                    National City Bank

                                    Investment RealEstate

                                    One ChagrinHighlands

                                    2000 Auburn Drive, Suite 400

                                    Beachwood, Ohio  44122-4327

                                    Attention:  MartinD. Rodriguez

                                    Phone: 216-488-9123

                                    Facsimile: 216-488-3160

A-2

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COMMITMENT:                                              WELLSFARGO BANK, N.A. 

$25,000,000

 

 

            By:       /s/ A. Geraldi Perry

            Name:  A. Geraldi Perry

            Title:     AssistantVice President

                                    200 Public Square

                                    Suite 200

                                    Cleveland, OH  44114

                                    Attention:  ToniG. Perry

                                    Phone: 216-344-6946

                                    Facsimile: 216-344-6971

A-3

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COMMITMENT:                                              RAYMONDJAMES BANK, FSB

$25,000,000

 

            By:       /s/ Thomas F. Macina   

            Name:  Thomas F. Macina

            Title:     SeniorVice President

                                    710 Carillon Parkway

                                    St. Petersburg, FL  33716

                                    Attention:  JamesM. Armstrong

                                    Phone: 727-567-7919

                                    Facsimile: 727-567-8830

A-4

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COMMITMENT:                                              THEHUNTINGTON NATIONAL BANK

$20,000,000

 

            By:       /s/ Timothy B. Smith

            Name:  Timothy B. Smith

            Title:     Officer

                                    917 Euclid Avenue, CM17

                                    Cleveland, OH  44115

                                    Attention: Jennifer Hearns

                                    Phone:216-515-6923

                                    Facsimile:216-515-0179

with notice to:

 

917  Euclid Avenue, CM17

                                    Cleveland, OH  44115

                                    Attention:  TimothySmith

                                    Phone:216-515-0368

                                    Facsimile:216-515-0179

A-5

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**EXHIBIT A**

FORM OF NOTE

____________, 2007

Associated Estates RealtyCorporation, a corporation organized under the laws of the State of Ohio (the"Borrower"), promises to pay to the order of _________________________ (the"Lender") the aggregate unpaid principal amount of all Loans made by the Lenderto the Borrower pursuant to Article II of the Credit Agreement (as the same maybe amended or modified, the "Agreement") hereinafter referred to, inimmediately available funds at the main office of National City Bank inCleveland, Ohio, as Administrative Agent, together with interest on the unpaidprincipal amount hereof at the rates and on the dates set forth in theAgreement.  The Borrower shall pay remaining unpaid principal of and accruedand unpaid interest on the Loans in full on the Facility Termination Date orsuch earlier date as may be required under the Agreement.

The Lender shall, and is herebyauthorized to, record on the schedule attached hereto, or to otherwise recordin accordance with its usual practice, the date and amount of each Loan and thedate and amount of each principal payment hereunder.

This Note is one of the Notesissued pursuant to, and is entitled to the benefits of the Credit Agreement,dated as of ____________, 2007 among the Borrower, National City Bank,individually and as Administrative Agent, and the other Lenders named therein,to which Agreement, as it may be amended from time to time, reference is herebymade for a statement of the terms and conditions governing this Note, includingthe terms and conditions under which this Note may be prepaid or its maturitydate accelerated.  Capitalized terms used herein and not otherwise definedherein are used with the meanings attributed to them in the Agreement.

If there is a Default under theAgreement or any other Loan Document and Administrative Agent exercises theremedies provided under the Agreement and/or any of the Loan Documents for theLenders, then in addition to all amounts recoverable by the AdministrativeAgent and the Lenders under such documents, the Administrative Agent and theLenders shall be entitled to receive reasonable attorneys fees and expensesincurred by the Administrative Agent and the Lenders in connection with theexercise of such remedies.

Borrower and all endorsersseverally waive presentment, protest and demand, notice of protest, demand andof dishonor and nonpayment of this Note, and any and all lack of diligence ordelays in collection or enforcement of this Note, and expressly agree that thisNote, or any payment hereunder, may be extended from time to time, andexpressly consent to the release of any party liable for the obligation securedby this Note, the release of any of the security for this Note, the acceptanceof any other security therefor, or any other indulgence or forbearancewhatsoever, all without notice to any party and without affecting the liabilityof the Borrower and any endorsers hereof.

This Note shall be governed andconstrued under the internal laws of the State of Ohio.

A-6

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**BORROWER AND LENDER, BY ITSACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTIONOR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS NOTE OR ANY OTHER LOANDOCUMENT OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH ISTHE SUBJECT OF THIS NOTE AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BETRIED BEFORE A JUDGE AND NOT BEFORE A JURY.**

ASSOCIATED ESTATESREALTY CORPORATION,

a n Ohio corporation

By:       _____________________________

Name:  _____________________________

Title:                                 _____________________________ A-7

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SCHEDULE OF LOANS AND PAYMENTS OFPRINCIPAL

TO

NOTE OF ASSOCIATED ESTATES REALTYCORPORATION

DATED ___________, 2007

                                                                                               Maturity

                           Principal                    Maturity                      Principal

                           Amountof                 of Interest                   Amount                        Unpaid

Date                    Loan                          Period                         Paid                             Balance

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

A-8

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**EXHIBIT B**

COMPLIANCE CERTIFICATE

 

National City Bank, as Administrative Agent

Investment Real Estate

One Chagin Highlands

2000 Auburn Drive

Suite 400

Cleveland, OH  44122-4327

| Re: | Credit Agreement dated as  of April 24, 2007 (as amended, modified, supplemented, restated, or renewed,  from time to time, the "Agreement") between ASSOCIATED ESTATES REALTY CORPORATION (the  "Borrower"), and NATIONAL CITY BANK, as Administrative Agent for itself and  the other lenders parties thereto from time to time ("Lenders"). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Reference is made to the Agreement.  Capitalized termsused in this Certificate (including schedules and other attachments hereto,this "Certificate") without definition have the meanings specified in theAgreement.

Pursuant to applicable provisions of the Agreement,Borrower hereby certifies to the Lenders that the information furnished in theattached schedules, including, without limitation, each of the calculationslisted below are true, correct and complete in all material respects as of thelast day of the fiscal periods subject to the financial statements andassociated covenants being delivered to the Lenders pursuant to the Agreementtogether with this Certificate (such statements the "Financial Statements" andthe periods covered thereby the "reporting period") and for such reportingperiods.

The Borrower hereby further certifies to the Lenders that:

1.         Compliance with Financial Covenants. Schedule A attached hereto sets forth financial data and computationsevidencing the Borrower's compliance with certain covenants of the Agreement,all of which data and computations are true, complete and correct.  

2.         Review of Condition.  The Borrower hasreviewed the terms of the Agreement, including, but not limited to, therepresentations and warranties of the Borrower set forth in the Agreement andthe covenants of the Borrower set forth in the Agreement, and has made, orcaused to be made under his or her supervision, a review in reasonable detailof the transactions and condition of the Borrower through the reportingperiods.

3.         Representations and Warranties.  To theBorrower's actual knowledge, the representations and warranties of the Borrowercontained in the Loan Documents, including those contained in the Agreement,are true and accurate in all material respects as of the date hereof and weretrue and accurate in all material respects at all times during the reportingperiod except as expressly noted on Schedule B hereto.

B-1

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4.         Covenants.  To the Borrower's actualknowledge, during the reporting period, the Borrower observed and performed allof the respective covenants and other agreements under the Agreement and theLoan Documents, and satisfied each of the conditions contained therein to beobserved, performed or satisfied by the Borrower, except as expressly noted onSchedule B hereto.

5.         No Default.  To the Borrower's actualknowledge, no Default exists as of the date hereof or existed at any timeduring the reporting period, except as expressly noted on Schedule Bhereto.

IN WITNESS WHEREOF, this Certificate is executed by theundersigned this ___ day of April, 2007.

ASSOCIATEDESTATES REALTY CORPORATION,

an Ohio corporation

By:                                                                                   

Name:                                                                              

Title:                                                                                 

B-2

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**SCHEDULE A**

FINANCIAL DATA ANDCOMPUTATIONS

B-3

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** **

**EXHIBIT C**

** **

**FORM OF**

**ASSIGNMENT AND ASSUMPTION**

This Assignment and Assumption (the "Assignment andAssumption") is dated as of the Effective Date set forth below and isentered into by and between [*Insert name of Assignor*] (the "Assignor")and [*Insert name of Assignee*] (the "Assignee").  Capitalizedterms used but not defined herein shall have the meanings given to them in theCredit Agreement identified below  (as amended, the "Credit Agreement"),receipt of a copy of which is hereby acknowledged by the Assignee.  TheStandard Terms and Conditions set forth in Annex 1 attached hereto are herebyagreed to and incorporated herein by reference and made a part of thisAssignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor herebyirrevocably sells and assigns to the Assignee, and the Assignee herebyirrevocably purchases and assumes from the Assignor, subject to and inaccordance with the Standard Terms and Conditions and the Credit Agreement, asof the Effective Date inserted by the Administrative Agent as contemplatedbelow (i) all of the Assignor's rights and obligations in its capacity as aLender under the Credit Agreement and any other documents or instrumentsdelivered pursuant thereto to the extent related to the amount and percentageinterest identified below of all of such outstanding rights and obligations ofthe Assignor under the respective facilities identified below (includingwithout limitation any letters of credit, guarantees, and swingline loansincluded in such facilities) and (ii) to the extent permitted to be assignedunder applicable law, all claims, suits, causes of action and any other rightof the Assignor (in its capacity as a Lender) against any Person, whether knownor unknown, arising under or in connection with the Credit Agreement, any otherdocuments or instruments delivered pursuant thereto or the loan transactionsgoverned thereby or in any way based on or related to any of the foregoing,including, but not limited to, contract claims, tort claims, malpracticeclaims, statutory claims and all other claims at law or in equity related tothe rights and obligations sold and assigned pursuant to clause (i) above (therights and obligations sold and assigned pursuant to clauses (i) and (ii) abovebeing referred to herein collectively as, the "Assigned Interest"). Such sale and assignment is without recourse to the Assignor and, except asexpressly provided in this Assignment and Assumption, without representation orwarranty by the Assignor.

1.         Assignor:                      ______________________________

2.         Assignee:                      ______________________________

                                                [andis an Affiliate of [*identify Lender*][1]]

3.         Borrower(s):                 ______________________________

4.         Administrative Agent:    ______________________,as the administrative agent under the Credit Agreement

5.         Credit Agreement:         The CreditAgreement dated as of April _, 2007 among Associated Estates Realty Corporation,the Lenders parties thereto, National City Bank, as Administrative Agent, andthe other agents parties thereto

                                                                           C-1

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| Facility Assigned[2] | Aggregate Amount of Commitment/Loans  for all Lenders* | Amount of Commitment/Loans Assigned* | Percentage Assigned of Commitment/Loans[3]                           |
|----------------------|--------------------------------------------------------|--------------------------------------|----------------------------------------------------------------------|
|                      | $                                                      | $                                    |             % |
|                      | $                                                      | $                                    |             % |
|                      | $                                                      | $                                    |             % |

[7.        TradeDate:                  ______________][4]

Effective Date:  _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICHSHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTERTHEREFOR.]

The terms set forth inthis Assignment and Assumption are hereby agreed to:

                                                                       ASSIGNOR

                                                                        [NAMEOF ASSIGNOR]

                                                                        By:______________________________

                                                                          Title:

                                                                       ASSIGNEE

                                                                        [NAMEOF ASSIGNEE]

                                                                        By:______________________________

                                                                          Title:

[Consented to and][5]Accepted:

National City Bank, 

as Administrative Agent

By_________________________________

 Title:

[Consented to:][6]

Associated Estates RealtyCorporation

By________________________________

                                                                                                    

 Title:                                                                                        C-2

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ANNEX 1

(_________)[7]

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

                        1.  Representationsand Warranties.  

                        1.1  Assignor.  The Assignor (a) represents and warrants that (i) it is thelegal and beneficial owner of the Assigned Interest, (ii) the Assigned Interestis free and clear of any lien, encumbrance or other adverse claim and (iii) ithas full power and authority, and has taken all action necessary, to executeand deliver this Assignment and Assumption and to consummate the transactionscontemplated hereby; and (b) assumes no responsibility with respect to (i) anystatements, warranties or representations made in or in connection with theCredit Agreement or any other Credit Document[8],(ii) the execution, legality, validity, enforceability, genuineness,sufficiency or value of the Credit Documents or any collateral thereunder,(iii) the financial condition of the Borrower, any of its Subsidiaries orAffiliates or any other Person obligated in respect of any Credit Document or(iv) the performance or observance by the Borrower, any of its Subsidiaries orAffiliates or any other Person of any of their respective obligations under anyCredit Document.

                        1.2. Assignee.  The Assignee (a) represents and warrants that (i) it has fullpower and authority, and has taken all action necessary, to execute and deliverthis Assignment and Assumption and to consummate the transactions contemplatedhereby and to become a Lender under the Credit Agreement, (ii) it meets allrequirements of an Eligible Assignee under the Credit Agreement (subject toreceipt of such consents as may be required under the Credit Agreement), (iii)from and after the Effective Date, it shall be bound by the provisions of theCredit Agreement as a Lender thereunder and, to the extent of the AssignedInterest, shall have the obligations of a Lender thereunder, (iv) it hasreceived a copy of the Credit Agreement, together with copies of the mostrecent financial statements delivered pursuant to Section ___ thereof, as applicable,and such other documents and information as it has deemed appropriate to makeits own credit analysis and decision to enter into this Assignment andAssumption and to purchase the Assigned Interest on the basis of which it hasmade such analysis and decision independently and without reliance on theAdministrative Agent or any other Lender, and (v) if it is a Foreign Lender[9],attached to the Assignment and Assumption is any documentation required to bedelivered by it pursuant to the terms of the Credit Agreement, duly completedand executed by the Assignee; and (b) agrees that (i) it will, independentlyand without reliance on the Administrative Agent, the Assignor or any otherLender, and based on such documents and information as it shall deem appropriateat the time, continue to make its own credit decisions in taking or not takingaction under the Credit Documents, and (ii) it will perform in accordance withtheir terms all of the obligations which by the terms of the Credit Documentsare required to be performed by it as a Lender.

                                                                          C-3

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                        2.   Payments.   From and after the Effective Date, the Administrative Agent shall make allpayments in respect of the Assigned Interest (including payments of principal,interest, fees and other amounts) to the Assignor for amounts which haveaccrued to but excluding the Effective Date and to the Assignee for amountswhich have accrued from and after the Effective Date.[10]

                        3.  GeneralProvisions. This Assignment and Assumption shall be binding upon, and inureto the benefit of, the parties hereto and their respective successors andassigns.  This Assignment and Assumption may be executed in any number ofcounterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page ofthis Assignment and Assumption by telecopyshall be effective as delivery of a manually executed counterpart of thisAssignment and Assumption.  ThisAssignment and Assumption shall be governed by, and construed in accordancewith, the law of the State of New York.

                                                                          C-4

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**EXHIBIT D**

SUBSIDIARYGUARANTY

This Guaranty is made as ofApril __, 2007 by the parties identified in the signature pages thereto, andany joinder to this Guaranty hereafter delivered (collectively, the "SubsidiaryGuarantors"), to and for the benefit of National City Bank, individually("National City") and as administrative agent ("Administrative Agent")for itself and the lenders under the Credit Agreement (as defined below) andtheir respective successors and assigns (collectively, the "Lenders").

RECITALS

A.        Associated EstatesRealty Corporation, a corporation organized under the laws of the State of Ohio ("Borrower"), and Subsidiary Guarantors have requested that the Lenders make arevolving credit facility available to Borrower in an aggregate principalamount of $100,000,000 (the "Facility").

B.         The Lenders haveagreed to make available the Facility to Borrower pursuant to the terms andconditions set forth in an Credit Agreement of even date herewith amongBorrower, National City, individually, and as Administrative Agent, and theLenders named therein (as amended, modified or restated from time to time, the"Credit Agreement").  All capitalized terms used herein and nototherwise defined shall have the meanings ascribed to such terms in the CreditAgreement.

C.         Borrower has executedand delivered or will execute and deliver to the Lenders promissory notes inthe principal amount of each Lender's Commitment and promissory notes in theprincipal amount, if any, of each Lender's Loan as evidence of Borrower'sindebtedness to each such Lender with respect to the Facility (the promissorynotes described above, together with any amendments or allonges thereto, orrestatements, replacements or renewals thereof, and/or new promissory notes tonew Lenders under the Credit Agreement, are collectively referred to herein asthe "Notes").

D.        Subsidiary Guarantorsare subsidiaries of Borrower.  Subsidiary Guarantors acknowledge that theextension of credit by the Administrative Agent and the Lenders to Borrowerpursuant to the Credit Agreement will benefit Subsidiary Guarantors by makingfunds available to Subsidiary Guarantors through Borrower and by enhancing thefinancial strength of the consolidated group of which Subsidiary Guarantors andBorrower are members.  The execution and delivery of this Guaranty bySubsidiary Guarantors are conditions precedent to the performance by theLenders of their obligations under the Credit Agreement.

AGREEMENTS

NOW, THEREFORE, SubsidiaryGuarantors, in consideration of the matters described in the foregoingRecitals, which Recitals are incorporated herein and made a part hereof, andfor other good and valuable consideration, hereby agree as follows:

1.         Subsidiary Guarantorsabsolutely, unconditionally, and irrevocably guaranty to each of the Lenders:

(a)        thefull and prompt payment of the principal of and interest on the Notes when due,whether at stated maturity, upon acceleration or otherwise, and at all timesthereafter, and the prompt payment of all sums which may now be or mayhereafter become due and owing under the Notes, the Credit Agreement, and theother Loan Documents;

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(b)        thepayment of all Enforcement Costs (as hereinafter defined in Paragraph 7hereof); and

(c)        thefull, complete, and punctual observance, performance, and satisfaction of allof the obligations, duties, covenants, and agreements of Borrower under theCredit Agreement and the Loan Documents.

Allamounts due, debts, liabilities, and payment obligations described insubparagraphs (a) and (b) of this Paragraph 1 are referred toherein as the "Facility Indebtedness."  All obligations described insubparagraph (c) of this Paragraph 1 are referred to herein asthe "Obligations."  Subsidiary Guarantors and Lenders agree thatSubsidiary Guarantors' obligations hereunder shall not exceed the greater of: (i) the aggregate amount of all monies received, directly or indirectly,by Subsidiary Guarantors from Borrower after the date hereof (whether by loan,capital infusion or other means), or (ii) the maximum amount of theFacility Indebtedness not subject to avoidance under Title 11 of the UnitedStates Code, as same may be amended from time to time, or any applicable statelaw (the "Bankruptcy Code").  To that end, to the extent such obligationswould otherwise be subject to avoidance under the Bankruptcy Code if SubsidiaryGuarantors are not deemed to have received valuable consideration, fair valueor reasonably equivalent value for its obligations hereunder, each SubsidiaryGuarantor's obligations hereunder shall be reduced to that amount which, aftergiving effect thereto, would not render such Subsidiary Guarantor insolvent, orleave such Subsidiary Guarantor with an unreasonably small capital to conductits business, or cause such Subsidiary Guarantor to have incurred debts (orintended to have incurred debts) beyond its ability to pay such debts as theymature, as such terms are determined, and at the time such obligations aredeemed to have been incurred, under the Bankruptcy Code.  In the event aSubsidiary Guarantor shall make any payment or payments under this Guarantyeach other Subsidiary Guarantor of the Facility Indebtedness shall contributeto such Subsidiary Guarantor an amount equal to such non-paying SubsidiaryGuarantor's pro rata share (based on their respective maximum liabilitieshereunder) of such payment or payments made by such Subsidiary Guarantor,provided that such contribution right shall be subordinate and junior in rightof payment in full of all the Facility Indebtedness to Lenders.

2.         In the event of anydefault by Borrower in making payment of the Facility Indebtedness, or inperformance of the Obligations, as aforesaid, in each case beyond theexpiration of any applicable grace period, Subsidiary Guarantors agree, ondemand by the Administrative Agent or the holder of a Note, to pay all theFacility Indebtedness and to perform all the Obligations as are then orthereafter become due and owing or are to be performed under the terms of theNotes, the Credit Agreement, and the other Loan Documents.

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3.         Subsidiary Guarantorsdo hereby waive (i) notice of acceptance of this Guaranty by theAdministrative Agent and the Lenders and any and all notices and demands ofevery kind which may be required to be given by any statute, rule or law,(ii) any defense, right of set-off or other claim which SubsidiaryGuarantors may have against Borrower or which Subsidiary Guarantors or Borrowermay have against the Administrative Agent or the Lenders or the holder of aNote, (iii) presentment for payment, demand for payment (other than asprovided for in Paragraph 2 above), notice of nonpayment (otherthan as provided for in Paragraph 2 above) or dishonor, protest andnotice of protest, diligence in collection and any and all formalities whichotherwise might be legally required to charge Subsidiary Guarantors withliability, (iv) any failure by the Administrative Agent and the Lenders toinform Subsidiary Guarantors of any facts the Administrative Agent and theLenders may now or hereafter know about Borrower, the Facility, or thetransactions contemplated by the Credit Agreement, it being understood andagreed that the Administrative Agent and the Lenders have no duty so to informand that Subsidiary Guarantors are fully responsible for being and remaininginformed by Borrower of all circumstances bearing on the existence or creation,or the risk of nonpayment of the Facility Indebtedness or the risk ofnonperformance of the Obligations, and (v) any and all right to cause amarshalling of assets of Borrower or any other action by any court orgovernmental body with respect thereto, or to cause the Administrative Agentand the Lenders to proceed against any other security given to a Lender inconnection with the Facility Indebtedness or the Obligations.  Credit may begranted or continued from time to time by the Lenders to Borrower withoutnotice to or authorization from Subsidiary Guarantors, regardless of thefinancial or other condition of Borrower at the time of any such grant or continuation. The Administrative Agent and the Lenders shall have no obligation to discloseor discuss with Subsidiary Guarantors the Lenders' assessment of the financialcondition of Borrower.  Subsidiary Guarantors acknowledge that norepresentations of any kind whatsoever have been made by the AdministrativeAgent and the Lenders to Subsidiary Guarantors.  No modification or waiver ofany of the provisions of this Guaranty shall be binding upon the AdministrativeAgent and the Lenders except as expressly set forth in a writing duly signedand delivered on behalf of the Administrative Agent and the Lenders. Subsidiary Guarantors further agree that any exculpatory language contained inthe Credit Agreement, the Notes, and the other Loan Documents shall in no eventapply to this Guaranty, and will not prevent the Administrative Agent and theLenders from proceeding against Subsidiary Guarantors to enforce this Guaranty.

4.         Subsidiary Guarantorsfurther agree that Subsidiary Guarantors' liability as guarantor shall in noway be impaired by any renewals or extensions which may be made from time totime, with or without the knowledge or consent of Subsidiary Guarantors of thetime for payment of interest or principal under a Note or by any forbearance ordelay in collecting interest or principal under a Note, or by any waiver by theAdministrative Agent and the Lenders under the Credit Agreement, or any otherLoan Documents, or by the Administrative Agent or the Lenders' failure orelection not to pursue any other remedies they may have against Borrower, or byany change or modification in a Note, the Credit Agreement, or any other LoanDocuments, or by the acceptance by the Administrative Agent or the Lenders ofany security or any increase, substitution or change therein, or by the releaseby the Administrative Agent and the Lenders of any security or any withdrawalthereof or decrease therein, or by the application of payments received fromany source to the payment of any obligation other than the Facility Indebtedness,even though a Lender might lawfully have elected to apply such payments to anypart or all of the Facility Indebtedness, it being the intent hereof thatSubsidiary Guarantors shall remain liable as principal for payment of theFacility Indebtedness and performance of the Obligations until all indebtednesshas been paid in full and the other terms, covenants and conditions of theCredit Agreement, and other Loan Documents and this Guaranty have beenperformed, notwithstanding any act or thing which might otherwise operate as alegal or equitable discharge of a surety.  Subsidiary Guarantors furtherunderstand and agree that the Administrative Agent and the Lenders may at anytime enter into agreements with Borrower to amend and modify a Note, the CreditAgreement or any of the other Loan Documents, or any other documents relatedthereto, and may waive or release any provision or provisions of a Note, theCredit Agreement, or any other Loan Document and, with reference to suchinstruments, may make and enter into any such agreement or agreements as theAdministrative Agent, the Lenders and Borrower may deem proper and desirable,without in any manner impairing this Guaranty or any of the AdministrativeAgent and the Lenders' rights hereunder or any of Subsidiary Guarantors'obligations hereunder.

- 7 -

14534489\V-10

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5.         This is an absolute,unconditional, complete, present and continuing guaranty of payment andperformance and not of collection.  Subsidiary Guarantors agree that itsobligations hereunder shall be joint and several with any and all otherguarantees given in connection with the Facility from time to time.  SubsidiaryGuarantors agree that this Guaranty may be enforced by the Administrative Agentand the Lenders without the necessity at any time of resorting to or exhaustingany security or collateral, if any, given in connection herewith or with aNote, the Credit Agreement, or any of the other Loan Documents or by orresorting to any other guaranties, and Subsidiary Guarantors hereby waive theright to require the Administrative Agent and the Lenders to join Borrower inany action brought hereunder or to commence any action against or obtain anyjudgment against Borrower or to pursue any other remedy or enforce any otherright.  Subsidiary Guarantors further agree that nothing contained herein orotherwise shall prevent the Administrative Agent and the Lenders from pursuingconcurrently or successively all rights and remedies available to them at lawand/or in equity or under a Note, the Credit Agreement or any other LoanDocuments, and the exercise of any of their rights or the completion of any oftheir remedies shall not constitute a discharge of any of SubsidiaryGuarantors' obligations hereunder, it being the purpose and intent ofSubsidiary Guarantors that the obligations of such Subsidiary Guarantorshereunder shall be primary, absolute, independent and unconditional under anyand all circumstances whatsoever.  Neither Subsidiary Guarantors' obligationsunder this Guaranty nor any remedy for the enforcement thereof shall beimpaired, modified, changed or released in any manner whatsoever by anyimpairment, modification, change, release or limitation of the liability ofBorrower under a Note, the Credit Agreement or any other Loan Document or byreason of Borrower's bankruptcy or by reason of any creditor or bankruptcyproceeding instituted by or against Borrower.  This Guaranty shall continue tobe effective and be deemed to have continued in existence or be reinstated (asthe case may be) if at any time payment of all or any part of any sum payablepursuant to a Note, the Credit Agreement or any other Loan Document isrescinded or otherwise required to be returned by the payee upon theinsolvency, bankruptcy, or reorganization of the payor, all as though suchpayment to such Lender had not been made, regardless of whether such Lendercontested the order requiring the return of such payment.  The obligations ofSubsidiary Guarantors pursuant to the preceding sentence shall survive anytermination, cancellation, or release of this Guaranty.

6.         This Guaranty shallbe assignable by a Lender to any assignee of all or a portion of such Lender'srights under the Loan Documents.

7.         If:  (i) thisGuaranty, a Note, or any of the Loan Documents are placed in the hands of anattorney for collection or is collected through any legal proceeding;(ii) an attorney is retained to represent the Administrative Agent or anyLender in any bankruptcy, reorganization, receivership, or other proceedingsaffecting creditors' rights and involving a claim under this Guaranty, a Note,the Credit Agreement, or any Loan Document; (iii) an attorney is retainedto enforce any of the other Loan Documents or to provide advice or otherrepresentation with respect to the Loan Documents in connection with anenforcement action or potential enforcement action; or (iv) an attorney isretained to represent the Administrative Agent or any Lender in any other legalproceedings whatsoever in connection with this Guaranty, a Note, the CreditAgreement, any of the Loan Documents, or any property subject thereto (otherthan any action or proceeding brought by any Lender or participant against theAdministrative Agent alleging a breach by the Administrative Agent of itsduties under the Loan Documents), then Subsidiary Guarantors shall pay to theAdministrative Agent or such Lender upon demand all reasonable attorney's fees,costs and expenses, including, without limitation, court costs, filing fees andall other costs and expenses incurred in connection therewith (all of which arereferred to herein as "Enforcement Costs"), in addition to all otheramounts due hereunder.

8.         The parties heretointend that each provision in this Guaranty comports with all applicable local,state and federal laws and judicial decisions.  However, if any provision orprovisions, or if any portion of any provision or provisions, in this Guarantyis found by a court of law to be in violation of any applicable local, state orfederal ordinance, statute, law, administrative or judicial decision, or publicpolicy, and if such court should declare such portion, provision or provisionsof this Guaranty to be illegal, invalid, unlawful, void or unenforceable aswritten, then it is the intent of all parties hereto that such portion,provision or provisions shall be given force to the fullest possible extentthat they are legal, valid and enforceable, that the remainder of this Guarantyshall be construed as if such illegal, invalid, unlawful, void or unenforceableportion, provision or provisions were not contained therein, and that therights, obligations and interest of the Administrative Agent and the Lender orthe holder of a Note under the remainder of this Guaranty shall continue infull force and effect.

- 8 -

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9.         Any indebtedness ofBorrower to Subsidiary Guarantors now or hereafter existing is herebysubordinated to the Facility Indebtedness.  Subsidiary Guarantors will notseek, accept, or retain for Subsidiary Guarantors' own account, any paymentfrom Borrower on account of such subordinated debt at any time when a Defaultor Unmatured Default exists under the Credit Agreement or the Loan Documents,and any such payments to Subsidiary Guarantors made while any Default orUnmatured Default then exists under the Credit Agreement or the Loan Documentson account of such subordinated debt shall be collected and received bySubsidiary Guarantors in trust for the Lenders and shall be paid over to theAdministrative Agent on behalf of the Lenders on account of the FacilityIndebtedness without impairing or releasing the obligations of SubsidiaryGuarantors hereunder.  Subsidiary Guarantors also agree not to incur any"Indebtedness" (as defined in the Agreement) not permitted to be incurred bythe owner of a "Qualifying Unencumbered Project" (as defined in the Agreement).

10.        Subsidiary Guarantorshereby subordinate to the Facility Indebtedness any and all claims and rights,including, without limitation, subrogation rights, contribution rights,reimbursement rights and set-off rights, which Subsidiary Guarantors may haveagainst Borrower arising from a payment made by Subsidiary Guarantors underthis Guaranty and agree that, until the entire Facility Indebtedness is paid infull, not to assert or take advantage of any subrogation rights of SubsidiaryGuarantors or the Lenders or any right of Subsidiary Guarantors or the Lendersto proceed against (i) Borrower for reimbursement, or (ii) any otherguarantor or any collateral security or guaranty or right of offset held by theLenders for the payment of the Facility Indebtedness and performance of theObligations, nor shall Subsidiary Guarantors seek or be entitled to seek anycontribution or reimbursement from Borrower or any other guarantor in respectof payments made by Subsidiary Guarantors hereunder.  It is expresslyunderstood that the agreements of Subsidiary Guarantors set forth aboveconstitute additional and cumulative benefits given to the Lenders for theirsecurity and as an inducement for their extension of credit to Borrower.

11.        Any amounts receivedby a Lender from any source on account of any indebtedness may be applied bysuch Lender toward the payment of such indebtedness, and in such order ofapplication, as a Lender may from time to time elect.

12.        Subsidiary Guarantorshereby submit to personal jurisdiction in the State of Ohio for the enforcementof this Guaranty and waive any and all personal rights to object to suchjurisdiction for the purposes of litigation to enforce this Guaranty. Subsidiary Guarantors hereby consent to the jurisdiction of either the Ohiostate courts or the United States District Courts in the state of Ohio, in anyaction, suit, or proceeding which the Administrative Agent or a Lender may atany time wish to file in connection with this Guaranty or any related matter. Subsidiary Guarantors hereby agree that an action, suit, or proceeding toenforce this Guaranty may be brought in any state or federal court in the Stateof Ohio and hereby waives any objection which Subsidiary Guarantors may have tothe laying of the venue of any such action, suit, or proceeding in any suchcourt; provided, however, that the provisions of this Paragraph shall not bedeemed to preclude the Administrative Agent or a Lender from filing any suchaction, suit, or proceeding in any other appropriate forum.

13.        All notices and othercommunications provided to any party hereto under this Agreement or any otherLoan Document shall be in writing or by telex or by facsimile and addressed ordelivered to such party at its address set forth below or at such other addressas may be designated by such party in a notice to the other parties.  Anynotice, if mailed and properly addressed with postage prepaid, shall be deemedgiven when received; any notice, if transmitted by facsimile, shall be deemed givenwhen transmitted.  Notice may be given as follows:

To Subsidiary Guarantors:

c/o Associated Estates Realty Corporation

1 AEC Parkway

Richmond Heights, Ohio 44143

Attention:                                 

Telephone:                               

- 9 -

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Facsimile:                                 

With a copy to:

Associated Estates Realty Corporation

1 AEC Parkway

Richmond Heights, Ohio 44143

Attention:

Telephone:

Facsimile:  216-488-3160

To National City Bank as AdministrativeAgent and as a Lender:

National City Bank

Investment RealEstate

One ChagrinHighlands

2000 Auburn Drive, Suite  400

Cleveland, Ohio 44122-4327

Attention:  Martin D. Rodriguez

Phone:  216-488-9123

Facsimile:  216-488-9123

                        With a copy to: 

National City Bank

Agent Services

629 Euclid Ave.

LOC 01-3028, 2nd Floor

Cleveland, Ohio 44114

Attention:  ScottLankford

Phone: 216-222-9462

Facsimile:                                 

With a copy to:

Sonnenschein Nath & Rosenthal LLP

7800 Sears Tower

Chicago, Illinois  60606

Attention:  Patrick G. Moran, Esq.

Telephone:  (312) 876-8132

Facsimile:  (312) 876-7934

If to any other Lender, to its address set forth in the CreditAgreement.

14.        This Guaranty shallbe binding upon the heirs, executors, legal and personal representatives,successors and assigns of Subsidiary Guarantors and shall inure to the benefitof the Administrative Agent and the Lenders' successors and assigns. 

15.        This Guaranty shallbe construed and enforced under the internal laws of the State of Ohio.

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**16.       SUBSIDIARYGUARANTORS, THE ADMINISTRATIVE AGENT AND THE LENDERS, BY THEIR ACCEPTANCEHEREOF, EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ORPROCEEDING TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS GUARANTY OR ANY OTHER LOANDOCUMENT OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH ISTHE SUBJECT OF THIS GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALLBE TRIED BEFORE A COURT AND NOT BEFORE A JURY.**

17. From time to time, additional parties may execute ajoinder substantially in the form of Exhibit A hereto, and thereby become aparty to this Guaranty.  From and after delivery of such joinder, the Subsidiarydelivering such joinder shall be a Subsidiary Guarantor, and be bound by all ofthe terms and provisions of this Guaranty.  - 11 -

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            IN WITNESS WHEREOF,Subsidiary Guarantors have delivered this Guaranty in the State of Ohio as of the date first written above.

AERC COUNTRY PLACE, LLC

FEINNO. 34-1907439

By:    AERC Country I, Inc.

         Its Managing Member

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

AERC COURTNEY CHASE, LLC

FEINNO. 38-3647187

By:    Associated Estates RealtyCorporation

By:                                                                  

Name: Martin A. Fishman,

Title:  Vice President

ELLET APARTMENTS, INC.

FEIN NO. 34-1749276

By:                                                                  

Name: Martin A. Fishman

Title:  Vice President

AERC FLEETWOOD, L.P.

FEINNO. 52-2167336

By:    AERC Fleet Corporation, Inc.

         Its General Partner

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    AERCKTC PROPERTIES, INC.

FEINNO. 52-2167393

 

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

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                                                                                    AERCMORGAN PLACE, INC.

FEINNO. 34-1888645

By:                                                                  

Name: Martin A. Fishman

Title:  Vice President

AERC-WATERGATE, INC.

FEINNO. 01-0657229

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    AERC-REMINGTONPLACE, INC.

FEINNO. 52-2167382

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

PURITAS PLACE APARTMENTS, INC.

FEINNO. 34-1749273

 

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    RIVERVIEWTOWERS APARTMENTS, 

                                                                                    INC.

FEINNO. 34-1749278

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

14534489\V-10

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SHAKER PARK GARDENS II, INC.

FEINNO. 34-1749286

 

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

                                                                                   

                                                                                    STATEROAD APARTMENTS, INC.

FEINNO. 34-1749274

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

STATESMAN II APARTMENTS, INC.

FEINNO. 34-1749263

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    SUTLIFFAPARTMENTS, INC.

FEINNO. 34-1749265

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

TALLMADGE ACRES APARTMENTS,

INC.

FEINNO. 34-1749280

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    TWINSBURGAPARTMENTS, INC.

FEINNO. 34-1749283

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

14534489\V-10

----

VILLAGE TOWER APARTMENTS, INC.

FEINNO. 34-1749259

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    SANDLERat ALTA LAGO, L.L.C.

FEINNO. 01-0668680

By:  Associated Estates Realty Corporation

Its Manager

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

AERC WILLIAMSBURG, INC.

FEINNO. 34-1907371

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

WEST HIGH APARTMENTS, INC.

FEINNO. 34-1749284

By:                                                                  

Name:  Martin A. Fishman

Title:  Vice President

** **

** **

                                                                            2E-1

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**EXHIBIT A TO SUBSIDIARY GUARANTY**

FORM OF JOINDER TOGUARANTY

THIS JOINDER is executed as ofApril __, 2007 by the undersigned, each of which hereby agrees as follows:

1.         All capitalized termsused herein and not defined in this Joinder shall have the meanings provided inthat certain Subsidiary Guaranty (the "Guaranty") dated as of April __, 2007executed for the benefit of National City Bank, as agent for itself and certainother lenders, with respect to a loan from the Lenders to Associated EstatesRealty Corporation ("Borrower").

2.         As required by theCredit Agreement described in the Guaranty, each of the undersigned isexecuting this Joinder to become a party to the Guaranty.

3.         Each and every term,condition, representation, warranty, and other provision of the Guaranty, bythis reference, is incorporated herein as if set forth herein in full and theundersigned agrees to fully and timely perform each and every obligation of aSubsidiary Guarantor under such Guaranty.

[SUBSIDIARY GUARANTOR]

FEIN NO. ______________________

By:       ____________________________

Name:  ____________________________

Its:        ____________________________

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**EXHIBITE**

FORM OF OPINION OF BORROWER'S COUNSEL

April ___, 2007

National City Bank, as Agent 

Investment Real Estate

One Chagrin Highlands

2000 Auburn Drive, Suite 400

Cleveland, Ohio 44122-4327

Re:      $100,000,000Credit Facility to Associated Estates Realty Corporation (the "Borrower")

Ladiesand Gentlemen:

We have acted as counsel for the Borrower and certain ofits subsidiaries (the "Subsidiary Guarantors", together with the Borrower arecollectively the "Loan Parties") in connection with a $100,000,000 unsecuredrevolving credit facility, (the "Loan"), which Loan is being made pursuant tothat certain Credit Agreement dated as of April ___, 2007 (the "CreditAgreement") among the Borrower, National City Bank and the several lenders fromtime to time parties thereto (collectively, the "Lenders"), and National CityBank, as Administrative Agent (the "Agent").

In connection with the Loan we have been furnished withoriginals or copies certified to our satisfaction of the Articles ofIncorporation and Bylaws****of the Borrower and of the  SubsidiaryGuarantors, and all such corporate and other records of the Borrower and theSubsidiary Guarantors with such declarations and agreements, and certificatesof officers and representatives of the Borrower and with such other documents,and we have made such other examinations and investigations as we have deemednecessary as a basis for the opinions expressed below.

We have examined the originals of the following documents,each of which is addressed to the Lender or to which the Lender is a party (allof which are sometimes collectively referred to as the "Loan Documents"):

1.         The Credit Agreement;

2.         The Subsidiary Guaranty made by theSubsidiary Guarantors, dated as of the date of this Opinion; and

3.         Thosecertain promissory notes to: (i)  National City Bank, dated as the date of thisOpinion in the amount of $30,000,000; (ii) Wells Fargo Bank, N.A., dated as ofthe date of this Opinion in the amount of $25,000,000; (iii) Raymond JamesBank, FSB, dated as of the date of this Opinion in the amount of $25,000,000;and (iv) Huntington National Bank, dated as of the date of this Opinion, in theamount of $20,000,000. 

Based upon the foregoing, we are of the opinion that:

                                                                            2E-3

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1.         Borroweris a corporation duly formed, validly existing and in good standing under thelaws of the State of Ohio.  The Subsidiary Guarantors are duly formed, validlyexisting and in good standing under the laws of the State set forth next tosuch specific Subsidiary Guarantor's name on Exhibit A, attached to thisOpinion.  

2.         Theexecution, delivery, and performance by each of the Loan Parties of the LoanDocuments to which it is a party has been duly authorized by all necessaryaction of such Loan Party and does not (i) require any consent or approval ofany partner or shareholder of such entity or any other person or entityexcepting such consents or approvals as have actually been obtained; (ii)violate any provision of any law, rule, or regulation of the United States orthe State of Ohio, or any provision of the partnership or corporate lawpresently in effect having applicability to the Borrower or its SubsidiaryGuarantors; (iii) violate any provision of the partnership agreements,operating agreements, articles of incorporation, or bylaws of the Loan Parties;(iv) violate any presently existing statutory or administrative provision orjudicial decision applicable to the Loan Parties; or (v) result in a breach of,or constitute a default under, any agreement or instrument affecting the LoanParties.

3.         EachLoan Document to which it is a party (a) has been properly authorized, executedand delivered by each Loan Party, (b) constitutes the legal, valid, andbinding obligations of such Loan Party, and (c) is enforceable inaccordance with its terms.

4.         Toour knowledge, no presently existing authorization, exemption, consent,approval, license, or registration with any court or governmental department,commission, bureau, agency, or instrumentality will be necessary for the valid,binding, and enforceable execution, delivery and performance by the LoanParties of the Loan Documents.

5.         Toour knowledge, there are no actions, suits, or proceedings pending orthreatened against the Loan Parties before any court or governmental entity orinstrumentality which could reasonably be expected to have a Material AdverseEffect (as defined in the Credit Agreement).

6.         TheLoan Documents are governed by the laws of the State of Ohio, and the Loan,including the interest rate reserved in the applicable Note and all fees and chargespaid or to be paid by or on behalf of Loan Parties in connection with such Loanpursuant to the applicable Loan Documents, is not in violation of the usurylaws of the State of Ohio.

The opinions expressed herein are expressly made subjectto and qualified by the following:

(a)  We have assumed that the Loan Documents are dulyauthorized and validly executed and delivered by the Agent, the Lenders and allother parties other than the Loan Parties.

(b)  This opinion is based upon existing laws, ordinancesand regulations in effect as of the date hereof.

(c)  This opinion is limited to the laws of the State of Ohio and applicable federal law and no opinion is expressed as to the laws of any otherjurisdiction.

(d)  We have assumed the authenticity of all documentssubmitted to us as originals (other than the Loan Documents) and the conformityto original documents of all documents (other than the Loan Documents)submitted to us as certified or photostatic copies.

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(e)  The opinions expressed herein are qualified to theextent that: (i) the enforceability of any rights or remedies in any agreementor instruments may be limited by applicable bankruptcy, insolvency,reorganization or similar laws affecting the rights of creditors generally; and(ii) the availability of specific performance, injunctive relief or any otherequitable remedy is subject to the discretion of a court of competentjurisdiction.

(f)  The opinions set forth herein are subject to theeffect of limitations contained in Title 11 of the United States Code, 11U.S.C. §§ 101 et seq. (the "Federal Bankruptcy Code") and all other applicablereceivership, conservatorship, bankruptcy, insolvency, reorganization,moratorium, fraudulent conveyance or similar laws affecting the rights ofcreditors generally. Without limitation of the foregoing qualification, noopinion is offered with respect any of the following matters: (a) turnover,automatic stay, avoiding power fraudulent transfer, preference, discharge,conversion of a non-recourse obligation into a recourse claims, limitations onipso facto and anti-assignment clauses; (b) judicially developed doctrinesrelating to the Federal Bankruptcy Code or similar state laws, such assubstantive consolidation.

(g)  No opinion is expressed hereinas to any securities or "blue sky" laws, environmental laws, labor laws,Federal Reserve Board margin regulations, tax laws, pension and employeebenefit laws and regulations, compliance with fiduciary duty requirements,antitrust and unfair competition laws and regulations, land use and subdivisionlaws and regulations, patent, copyright and trademark laws and regulations,racketeering laws and regulations, health and safety laws and regulations,laws, regulations and policies concerning, national and local emergency,terrorism and criminal and civil forfeiture laws.

(h)  The opinions expressed herein are limited by (a)equitable principles, including the availability of equitable remedies(regardless of whether such enforceability is considered in a proceeding in equityor at law), and (b) with respect to any indemnity, waiver and similarprovisions contained in the Loan Documents, public policy considerations.

(i)  No opinion is expressed herein as to the payment oflate fees, prepayment premiums, default interest or other charges payable uponor after the occurrence of a default.  In addition, we express no opinion as tothe effect of the law of any jurisdiction other than the State of Ohio wherein any Person may be located or wherein any enforcement of the Loan Documents maybe sought which limits the rates of interest legally chargeable orcollectible.  

(j)  No opinion is expressed herein as to any accountingtreatment.

(k)  We express no opinion as towhether any person has qualified or is required to qualify to do business as aforeign corporation or other entity, or to otherwise qualify to transactbusiness, in any State.

(l)  We call to your attention that certain remedies andprovisions of the Loan Documents (including, without limitation, provisionsconcerning self-help; summary remedies; and waiver of trial by jury or otherrights) may be unenforceable in some or all circumstances under applicable lawor judicial decisions.  However, such laws and judicial decisions do not, inour opinion, subject to the other qualifications in this opinion, render theLoan Documents invalid as a whole or leave the parties to the Loan Documentswithout the ultimate practical realization of the essential legal benefitsintended to be afforded thereby.

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(m)  We note that the enforceability of the Loan Documentsmay be limited if Lenders or Agent fails to act in good faith or in acommercially reasonable manner in seeking to exercise its rights and remediesthereunder.  Without limiting the generality of the foregoing, we note that acourt might hold that a technical or nonmaterial default under the LoanDocuments by a Loan Party does not give rise to a right of Lenders or Agent toexercise some or all remedies including, without limitation, acceleration.  Weexpress no opinion as to the effect on the opinions expressed herein of (a) thecompliance or non-compliance of any party to the LoanDocuments with any state, Federal or other laws or regulations applicable to itor (b) any law relating to the legal or regulatory status of Agent or anyLender.

            (n)  Whenever we havestated that we have assumed any matter, it is intended to indicate that we haveassumed such matter without making any factual, legal or other inquiry orinvestigation and without expressing any opinion or conclusion of any kindconcerning such matter.  Whenever our opinion herein with respect to theexistence or absence of facts or circumstances is qualified by the phrase "toour knowledge", that phrase signifies that, in the course of our representationof the Loan Parties, no facts have come to the attention of MichaelT. Fishman or Eric Greenfield the attorneys within our firm who have beendirectly involved in representing the Loan Parties in connection with the Loan,that would give them actual knowledge or actual notice that any such opinionsor other matters are not accurate.  We have undertaken no independentinvestigation or verification of such matters.

(o)  The opinions expressed herein are based on the facts(as we know, believe or have assumed them to be) and law as in effect on thedate of this opinion.  We do not undertake to supplement or update this opinionif, hereafter, there is a change in law or facts or new facts come to ourattention.

(p)  Weexpress no opinion as to any choice of law, forum selection, venue, service ofprocess, consent to jurisdiction (both as to personal jurisdiction and subjectmatter jurisdiction) or waiver of jury trial provisions in any of the LoanDocuments.  In addition, the opinions set forth herein are given as if the lawof the State of Ohio governs each Loan Document, without regard to whether suchLoan Document so provides. 

(q)  Certain of the members of our firm are members of theBar of the State of Ohio.  The opinions expressed herein are limitedexclusively to the internal laws of the State of Ohio without regard toprinciples of conflicts of laws.  Although certain members of our firm areadmitted to the practice of law in certain other states, we have not made anyreview of the laws of any other state or consulted with members of this firmwho are admitted in such other jurisdictions for the purpose of the foregoingopinions.  Accordingly, except as set forth in this paragraph, we express noopinion as to any matters governed by the laws of any other state or any Federallaws of the United States of America or any other nation or sovereign entity.

This opinion may be relied upon only by the addresseehereof, the Lenders, their respective attorneys, auditors, advisors andparticipants, and their respective successors and assigns, and not by any otherparty.

Very truly yours,

Greenberg Traurig, LLP

                                                                            2E-6

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Exhibit A

AERC SubsidiaryGuarantors

                                                                 Stateof Incorporation

AERC Country Place, LLC.                                Delaware

AERC Fleetwood, L.P.                                       Delaware

AERC KTC Properties, Inc.                               Delaware

AERC Morgan Place, Inc.                                   Delaware

AERC Remington Place, Inc.                               Delaware

AERC-Watergate, Inc.                                        Ohio

AERC Williamsburg, Inc.                                    Delaware

Ellet Apartments, Inc.                                          Ohio

Puritas Place Apartments, Inc.                             Ohio

Riverview Towers Apartments, Inc.                     Ohio

Shaker Park Gardens II, Inc.                               Ohio

State Road Apartments, Inc.                                Ohio

Statesman II Apartments, Inc.                              Ohio

Sutliff Apartments, Inc.                                        Ohio

Tallmadge Acres Apartments, Inc.                       Ohio

Twinsburg Apartments, Inc.                                 Ohio

Village Tower Apartments, Inc.                           Ohio

Sandler at Alta Lago, L.L.C.                               VirginiaAERC-Courtney Chase, LLC                             Delaware

West High Apartments, Inc.                                 Ohio

                                                                            2E-7

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EXHIBIT F

BORROWINGNOTICE

___________, 2007

National City Bank 

Investment Real Estate

One Chagrin Highlands

2000 Auburn Drive, Suite 400

Cleveland, Ohio 44122-4327

**Borrowing Notice**

Associated Estates RealtyCorporation ("Borrower") hereby requests an Advance pursuant to Section 2.10of the Credit Agreement, dated as of April 24, 2007 (as amended or modifiedfrom time to time, the "Credit Agreement"), among Borrower, the Lendersreferenced therein, and you, as an administrative agent for the Lenders.

An Advance is requested to bemade in the amount of $__________, to be made on _____________.  Such Advanceshall be a [LIBOR] [Floating Rate] Advance.  [The applicable LIBOR InterestPeriod shall be _____________.]  

** **

The proceeds of the requestedloan shall be directed to the following account:

WiringInstructions:

(BankName)

(ABA No.)

(Beneficiary)

(AccountNo. to Credit)

(NotificationRequirement)

In support of this request,Borrower hereby represents and warrants to the Administrative Agent and theLenders that acceptance of the proceeds of such Advance by the Borrower shallbe deemed to further represent and warrant that all requirements of Section5.2 of the Credit Agreement in connection with such Advance have beensatisfied at the time such proceeds are disbursed.

Date:_________________________________

Associated Estates Realty Corporation,

an Ohio corporation,

By:       _________________________________

Name:  _________________________________

Its:        _________________________________

                                                                            G-12

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**SCHEDULE3.1**

** **

**INITIALQUALIFYING UNENCUMBERED**

**PROJECTSAND SUBSIDIARY GUARANTORS**

** **

** **

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****
** **

**SCHEDULE 6.6**

** **

**LITIGATION**

** **

**(SeeSection 6.6)**

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**Schedule 6.7**

** **

**SUBSIDIARIES OF BORROWER**

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**SCHEDULE 6.13**

** **

**EXCEPTIONS,IF ANY, TO OWNERSHIP FREE OF UNPERMITTED LIENS**

** **

**(SeeSection 6.13)**

None.

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**SCHEDULE 6.19**

** **

**ENVIRONMENTALMATTERS**

** **

**(SeeSection 6.19)**

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**SCHEDULE6.19**

** **

**ENVIRONMENTALMATTERS**

** **

** **

            Certainof the projects located in known radon zones may have elevated levels in excessof the minimum 4.0 pCu/L threshold.  Moreover, certain of the older propertiesmay have floor tile, roof materials and other building materials that containnon-friable asbestos.  In addition, older properties may have transformers thatmay contain polychlorinated biphenyls (PCB's).

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[1] Select as applicable.

[2] Fill in the appropriateterminology for the types of facilities under the Credit Agreement that arebeing assigned under this Assignment (e.g. "Revolving Credit Commitment," "TermLoan Commitment," etc.)

* Amount to be adjusted bythe counterparties to take into account any payments or prepayments madebetween the Trade Date and the Effective Date.

[3] Set forth, to at least10 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

[4] To be completed if theAssignor and the Assignee intend that the minimum assignment amount is to bedetermined as of the Trade Date.

[5] To be added only if theconsent of the Administrative Agent is required by the terms of the CreditAgreement.

[6] To be added only if theconsent of the Borrower and/or other parties (e.g. Swingline Lender, L/CIssuer) is required by the terms of the Credit Agreement.

[7] Describe CreditAgreement at option of Administrative Agent.

[8] The term "CreditDocument" should be conformed to that used in the Credit Agreement.

[9] The concept of  "ForeignLender" should be conformed to the section in the Credit Agreement governingwithholding taxes and gross-up.

[10] The Administrative Agentshould consider whether this method conforms to its systems.  In somecircumstances, the following alternative language may be appropriate:  "Fromand after the Effective Date, the Administrative Agent shall make all paymentsin respect of the Assigned Interest (including payments of principal, interest,fees and other amounts) to the Assignee whether such amounts have accrued priorto**,** on or after the Effective Date.  The Assignor and theAssignee shall make all appropriate adjustments in payments by theAdministrative Agent for periods prior to the Effective Date or with respect tothe making of this assignment directly between themselves."