EXHIBIT 4.12   

 

 

**EXECUTION COPY**

 

AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF OCTOBER 18, 2010

 

AMONG

 

ASSOCIATED ESTATES REALTY CORPORATION,

AS BORROWER

 

AND

 

PNC BANK, NATIONAL ASSOCIATION

AS ADMINISTRATIVE AGENT

 

AND

 

PNC CAPITAL MARKETS, LLC, AS CO-LEAD ARRANGERAND BOOK MANAGER

 

AND

 

WELLS FARGO BANK, N.A., AS SYNDICATION AGENT 

 

AND

 

WELLS FARGO SECURITIES, LLC, AS CO-LEAD ARRANGER

 

AND

 

U. S. BANK NATIONAL ASSOCIATION, AS DOCUMENTATION AGENT

 

AND

 

THE SEVERAL LENDERSFROM TIME TO TIME PARTIES HERETO,AS LENDERS

 

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TABLE OF CONTENTS

 

Page

ARTICLE IDEFINITIONS. 1

1.1      Definitions. 1

1.2      Construction. 23

1.3      Accounting Principles. 23

ARTICLE IITHE CREDIT. 24

2.1      Generally. 24

2.2      Revolving Credit Advances. 24

2.3      Interest Rate Options. 24

2.4      Commitment Fee. 25

2.5      Other Fees. 25

2.6      Usury. 25

2.7      Voluntary Commitment Reductions. 26

2.8      Minimum Amount of Each Advance. 26

2.9      Final Principal Payment; Optional Prepayments. 26

2.10    Revolving Credit Loan Requests; Swing Loan Requests. 26

2.11    Conversion and Continuation of Outstanding Advances. 27

2.12    Changes in Interest Rate, Etc. 27

2.13    Rates Applicable After Event of Default 27

2.14    Method of Payment 28

2.15    Notes; Telephonic Notices. 28

2.16    Interest Payment Dates; Interest and Fee Basis. 28

2.17    Notification of Advances, Interest Rates and Prepayments. 28

2.18    Increasing Lenders and New Lenders. 29

2.19    Presumptions by Administrative Agent 30

2.20    Replacement of a Lender 30

2.21    Swing Advances. 31

2.22    Letter of Credit Subfacility. 32

2.23    Extension of Facility Termination Date. 37

ARTICLE IIIUNENCUMBERED POOL PROPERTIES. 38

3.1      Eligibility of Projects. 38

3.2      Conditions Precedent to a Project Becoming a QualifyingUnencumbered Project 39

3.3      Release of Subsidiary Guarantors and Qualifying UnencumberedProjects. 39

ARTICLE IVINCREASED COSTS. 40

4.1      Increased Costs Generally. 40

4.2      Taxes. 41

4.3      Indemnity. 43

4.4      Settlement Date Procedures. 44

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4.5      LIBOR Rate Unascertainable; Illegality; Increased Costs;Deposits Not Available. 44

4.6      Administrative Agent’s and Lender’s Rights. 45

ARTICLE VCONDITIONS PRECEDENT. 45

5.1      Initial Advance. 45

5.2      Each Advance. 47

ARTICLE VIREPRESENTATIONS AND WARRANTIES. 47

6.1      Existence. 47

6.2      Authorization and Validity. 47

6.3      No Conflict; Government Consent 47

6.4      Financial Statements; Material Adverse Effect 48

6.5      Taxes. 48

6.6      Litigation and Guarantee Obligations. 48

6.7      Subsidiaries. 48

6.8      ERISA.. 48

6.9      Accuracy of Information. 49

6.10    Regulation U.. 49

6.11    Material Agreements. 49

6.12    Compliance With Laws. 49

6.13    Ownership of Projects. 49

6.14    Investment Company Act 49

6.15    Solvency. 49

6.16    Insurance. 50

6.17    REIT and Listing Status. 50

6.18    Title to Property. 50

6.19    Environmental Matters. 50

6.20    Office of Foreign Asset Control 51

6.21    Subsidiary Guaranty. 51

6.22    Intellectual Property. 52

ARTICLE VIICOVENANTS. 52

7.1      Financial Reporting. 52

7.2      Use of Proceeds. 53

7.3      Notice of Default 54

7.4      Conduct of Business. 54

7.5      Taxes. 54

7.6      Insurance. 54

7.7      Compliance with Laws. 54

7.8      Maintenance of Properties and Equipment 54

7.9      Inspection. 54

7.10    Maintenance of Status. 55

7.11    Dividends. 55

7.12    No Change in Control 55

7.13    Non-Real Estate Investments. 55

7.14    Merger; Sale of Assets. 55

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7.15    Acquisitions and Investments. 55

7.16    Liens. 56

7.17    Affiliates. 56

7.18    Recourse Secured Indebtedness. 57

7.19    Minimum Consolidated Tangible Net Worth. 57

7.20    Indebtedness and Cash Flow Covenants. 57

7.21    Environmental Matters. 57

7.22    Permitted Investments. 58

7.23    Additional Unsecured Indebtedness. 59

7.24    Limits on Ownership Encumbrances. 59

ARTICLE VIIIevents of DEFAULT. 59

ARTICLE IXACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES. 61

9.1      Acceleration. 61

9.2      Amendments. 62

9.3      Preservation of Rights. 63

9.4      Insolvency of Borrower 63

ARTICLE XGENERAL PROVISIONS. 63

10.1    Survival of Representations. 63

10.2    Governmental Regulation. 63

10.3    No Plan Assets. 63

10.4    Headings. 63

10.5    Entire Agreement 63

10.6    Several Obligations; Benefits of this Agreement 63

10.7    Expenses; Indemnification. 64

10.8    Electronic Document Deliveries. 64

10.9    Accounting. 65

10.10  Severability of Provisions. 65

10.11  Nonliability of Lenders. 65

10.12  CHOICE OF LAW... 65

10.13  SUBMISSION TO JURISDICTION.. 65

10.14  WAIVER OF VENUE. 65

10.15  SERVICE OF PROCESS. 66

10.16  WAIVER OF JURY TRIAL. 66

ARTICLE XITHE ADMINISTRATIVE AGENT. 66

11.1    Appointment and Authority. 66

11.2    Rights as a Lender 66

11.3    Exculpatory Provisions. 66

11.4    Reliance by Administrative Agent 67

11.5    Delegation of Duties. 68

11.6    Resignation of Administrative Agent 68

11.7    Non-Reliance on Administrative Agent and Other Lenders. 69

11.8    No Other Duties, etc. 69

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11.9    No Reliance on Administrative Agent’s Customer IdentificationProgram.. 69

11.10  Requests for Approval 69

11.11  Defaulting Lenders. 69

ARTICLE XIISETOFF; RATABLE PAYMENTS. 70

12.1    Setoff. 70

12.2    Ratable Payments. 70

ARTICLE XIIIBENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS. 71

13.1    Successors and Assigns Generally. 71

13.2    Assignments by Lenders. 72

13.3    Register 73

13.4    Participations. 73

13.5    Limitations upon Participant Rights Successors and AssignsGenerally. 74

13.6    Certain Pledges; Successors and Assigns Generally. 74

13.7    Confidentiality. 74

ARTICLE XIVNOTICES. 75

14.1    Giving Notice. 75

14.2    Change of Address. 75

ARTICLE XVPATRIOT ACT. 75

ARTICLE XVICOUNTERPARTS. 76

 

 

**EXHIBITS**

 

EXHIBIT A - FORM OF NOTE

EXHIBIT B - COMPLIANCE CERTIFICATE

EXHIBIT C - FORM OF ASSIGNMENT AND ASSUMPTION

EXHIBIT D - SUBSIDIARY GUARANTY

EXHIBIT E - FORM OF OPINIONOF BORROWER’S COUNSEL

EXHIBIT F - LOAN REQUEST

SCHEDULE 1.1 -  ORIGINAL FACILITY LETTERS OF CREDIT

SCHEDULE 3.1 -    INITIAL QUALIFYING UNENCUMBERED PROJECTS AND 

                                SUBSIDIARY GUARANTORS

SCHEDULE 6.6 -LITIGATION

SCHEDULE 6.7 - SUBSIDIARIESOF BORROWER

SCHEDULE 6.13 -  EXCEPTIONS,IF ANY, TO OWNERSHIP FREE OF UNPERMITTED 

                                LIENS

SCHEDULE 6.19 -ENVIRONMENTAL MATTERS

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AMENDED AND RESTATED CREDITAGREEMENT

This Amended and Restated CreditAgreement, dated as of October 18, 2010, is among Associated Estates RealtyCorporation (the “Borrower”), PNC Bank, National Association, and theseveral banks, financial institutions and other entities from time to timeparties to this Credit Agreement (collectively, the “Lenders”), PNCBank, National Association, not individually, but as “Agent” or “AdministrativeAgent” and Wells Fargo Bank, N.A., as “Syndication Agent.”

RECITALS

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

WHEREAS,  the Borrower and certain of the Lenders areparties to that certain Credit Agreement dated as of April 14, 2007, as amendedby a First Amendment thereto dated as of March 20, 2008 (as amended, the “OriginalAgreement”).

WHEREAS, the Borrower has requested that the Lenders agreeto amend and restate the Original Agreement to, among other things, increasethe maximum aggregate amount of loans available thereunder, provide for anextension of the maturity date thereof and modify certain of the pricing andfinancial covenants thereunder.

WHEREAS, the Lenders are willing to so amend and restatethe Original Agreement in consideration of the Borrower’s agreement to theterms and conditions of this Amendment.

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

# ARTICLEIDEFINITIONS

## 1.1             Definitions

.  As used in this Agreement:

“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 assetsof any firm, corporation or division thereof, whether through purchase ofassets, merger or otherwise or (ii) directly or indirectly acquires (in onetransaction or as the most recent transaction in a series of transactions) atleast a majority (in number of votes) of the securities of a corporation whichhave ordinary 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, as adjusted for impairments and othernon-cash charges and without any reduction  for Defeasance Costs.

“Administrative Agent” means PNCBank, National Association in its capacity as agent for the Lenders pursuant toArticle XI, and not in its individual capacity as a Lender, and anysuccessor Administrative Agent appointed pursuant to Article XI.

 

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“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 Interest Period, including Swing Advances.

“Affiliate” as to any Person shall mean any other Person(i) which directly or indirectly controls, is controlled by, or is under commoncontrol with such Person, or (ii) which beneficially owns or holds 5% or moreof any class of the voting or other equity interests of such Person, or (iii)5% or more of any class of voting interests or other equity interests of whichis beneficially owned or held, directly or indirectly, by such Person.  

“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, $250,000,000.

“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.

“Anti-Terrorism Laws” shall mean any Laws relating toterrorism or money laundering, including Executive Order No. 13224, the USAPatriot Act, the Laws comprising or implementing the Bank Secrecy Act, and theLaws administered by the United States Treasury Department’s Office of ForeignAsset Control (as any of the foregoing Laws may from time to time be amended,renewed, extended, or replaced).

“Applicable Commitment Fee Rate” shall mean, with respectto the Commitment Fee payable in arrears for any quarter, 0.35% 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 Leverage Ratio as follows:

 

|  

 

Leverage Ratio                              |  

LIBOR Applicable Margin | Base Rate Applicable Margin |
|-------------------------------------------------------------|---------------------------------|-----------------------------|
|                                                        |                            |                        |
| Less than 45%                                               | 2.30%                           | 1.30%                       |
| Greater than or equal to  45%, but less than 50%            | 2.65%                           | 1.65%                       |
| Greater than or equal to  50% but less than or equal to 55% | 2.95%                           | 1.95%                       |
| Greater than 55% but less  than or equal to 60%             | 3.25%                           | 2.25%                       |
| Greater than 60%                                            | 3.25% + Default Rate            | 2.25% + Default Rate        |

 

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As of the Agreement ExecutionDate, based on the Leverage Ratio shown on the Compliance Certificate deliveredto the Administrative Agent by Borrower pursuant to Section 5.1(k), theLIBOR Applicable Margin is 2.30% and the Base Rate Applicable Margin is 1.30%.The percentages set forth above shall be changed from time to time inaccordance with the Leverage Ratio of the last day of the most recent precedingfiscal quarter for which financial results have been reported, which percentageshall be effective on the first day of the calendar month following the date onwhich Administrative Agent receives a Compliance Certificate as required by Section7.1(c) from the Borrower as of the end of such fiscal quarter in theform attached hereto as Exhibit B, beginning with the ComplianceCertificate for the fiscal quarter ending September 30, 2010.  If any suchCompliance Certificate shall later be determined to be incorrect and as aresult a higher Applicable Margin should have been in effect for any period,Borrower shall pay to the Administrative Agent for the benefit of the Lendersall additional interest which would have accrued if the original ComplianceCertificate had been correct, as shown on an invoice to be prepared by theAdministrative Agent and delivered to Borrower, on the next Payment Datefollowing delivery of such invoice.

“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,  or such other individuals, designated by written notice to theAdministrative Agent from the Borrower, authorized to execute notices, reportsand other documents on behalf of the Loan Parties required hereunder.  TheBorrower may amend such list of individuals from time to time by giving writtennotice of such amendment to the Administrative Agent.

“Base Rate” shall mean, for any day, a fluctuating perannum rate of interest equal to the highest of (a) the Federal Funds Open Rate,plus fifty basis points (0.5%), and (b) the Prime Rate, and (c) theDaily LIBOR Rate, plus 100 basis points (1.0%).  Any change in the BaseRate (or any component thereof) shall take effect at the opening of business onthe day such change occurs.

“Base Rate Advance” means an Advance that bears interestat the Base Rate Option.

“Base Rate Applicable Margin”means****as of any date, with respect to the percentage spread to be addedto the Base Rate under the Base Rate Option, the percentage in effect on suchdate under the definition of the “Applicable Margin”.

“Base Rate Loan” means a Loanwhich bears interest at the Base Rate Option.

“Base Rate Option” shall meanthe option of the Borrower to have Advances bear interest at the rate and underthe terms set forth in Section 2.3.

“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 Tranche” shall mean specified portions ofAdvances outstanding as follows:  (i) any Advances to which a LIBOR Rate Optionapplies which become subject to the same Interest Rate Option under the sameLoan Request by the Borrower and which have the same Interest Period shallconstitute one Borrowing Tranche, and (ii) all Advances to which a Base RateOption applies shall constitute one Borrowing Tranche.

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“Business Day” means (i) with respect to any borrowing,payment or rate selection of LIBOR Rate Advances, a day (other than a Saturdayor Sunday) on which banks generally are open in Cleveland, Ohio and New York,New York for the conduct of substantially all of their commercial lendingactivities and on which dealings in United States dollars are carried on in theLondon interbank market and (ii) for all other purposes, a day (other than aSaturday or Sunday) on which banks generally are open in Cleveland, Ohio andNew York, New York for the conduct of substantially all of their commerciallending 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” meansseven and one half percent (7.50%).

“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 under the United StatesInvestment Company Act rated AAm or AAm-G by S&P and P-1 by Moody’s;

(iii)       certificates of deposit or otherinterest-bearing obligations of a bank or trust company which is a member ingood standing of the Federal Reserve System having a short term unsecured debtrating of not less than A-1 by S&P and not less than P-1 by Moody’s (or ineach case, if no bank or trust company is so rated, the highest comparablerating then given to any bank or trust company, but in such case only for fundsinvested overnight or over a weekend) provided that such investments shallmature or be redeemable upon the option of the holders thereof on or prior to adate one month from the date of their purchase;

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(iv)       certificates of deposit or otherinterest-bearing obligations of a bank or trust company which is a member ingood standing of the Federal Reserve System having a short term unsecured debtrating of not less than A-1+ by S&P, and not less than P-1 by Moody’s andwhich has a long term unsecured debt rating of not less than A1 by Moody’s (orin each case, if no bank or trust company is so rated, the highest comparablerating then given to any bank or trust company, but in such case only for fundsinvested overnight or over a weekend) provided that such investments shallmature or be redeemable upon the option of the holders thereof on or prior to adate three months from the date of their purchase;

(v)        bonds or other obligations having a short termunsecured debt rating of not less than A-1+ by S&P and P-1+ by Moody’s andhaving a long term debt rating of not less than A1 by Moody’s issued by or byauthority of any state of the United States, any territory or possession of theUnited States, including the Commonwealth of Puerto Rico and agencies thereof,or any political subdivision of any of the foregoing;

(vi)       repurchase agreements issued by an entity ratednot less than A-1+ by S&P, and not less than P-1 by Moody’s which aresecured by U.S. Government securities of the type described in clause (i)of this definition maturing on or prior to a date one month from the date therepurchase agreement is entered into;

(vii)      short term promissory notes rated not less thanA-1+ by S&P, and  not less than P-1 by Moody’s maturing or to be redeemableupon the option of the holders thereof on or prior to a date one month from thedate of their purchase; and

(viii)     commercial paper (having original maturities ofnot more than 365 days) rated at least A-1+ by S&P and P-1 by Moody’s andissued by a foreign or domestic issuer who, at the time of the investment, hasoutstanding long-term unsecured debt obligations rated at least A1 by Moody’s.

“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. 

“Change in Law” shall mean the occurrence, after the dateof this Agreement, of any of the following: (a) the adoption or taking effectof any Law, (b) any change in any Law or in the administration, interpretationor application thereof by any Governmental Authority or (c) the making orissuance of any request, guideline or directive (whether or not having theforce of Law) by any Governmental Authority.

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

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“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 Interest Expensefor 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 calculating ConsolidatedInterest Expense, equal to the greater of (x) the percentage of theprincipal amount of such Indebtedness for which any member of the ConsolidatedGroup is liable and (y) the Consolidated Group Pro Rata Share of suchInvestment 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 or non-cash charges which havebeen added back to Consolidated Adjusted EBITDA pursuant to the definitionthereof, plus (b) the applicable Consolidated Group Pro Rata Share of anysuch interest expense, determined in accordance with GAAP, of each InvestmentAffiliate, for such period, on Indebtedness of such Investment Affiliate,whether recourse or non-recourse, similarly excluding any interest expenseattributable to Defeasance Costs or non-cash charges of such InvestmentAffiliate which has been added back to net income of such Investment Affiliatein calculating Consolidated Adjusted EBITDA.

“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.

“Conversion/Continuation Notice”is defined in Section 2.11.

“Convertible Debt Accounting Guidance” means any rule,regulation, pronouncement or other guidance under GAAP in the United States,which specifically relates to the accounting for convertible debt instrumentsthat may be settled in cash upon conversion, and requires that the accountingtreatment of such instruments be modified to (i) bifurcate the instrument intoan indebtedness and an equity component, (ii) value each component of theinstrument separately, and (iii) recognize interest expense on the indebtednesscomponent at a rate similar to a liability instrument that does not have anequity component (which effectively represents a non-cash adjustment tointerest expense in excess of the stated interest rate on the instrument).

“Daily LIBOR Rate shall mean, for any day, the rate perannum determined by the Administrative Agent by dividing (x) the Published Rateby (y) a number equal to 1.00 minus the LIBOR Reserve Percentage on such day.

“Default Rate” means theinterest rate which may apply during the continuance of an Event of Defaultpursuant to Section 2.13 which shall mean that (i) eachLIBOR Rate Advance shall bear interest for the remainder of the applicableInterest Period at the LIBOR Rate Option otherwise applicable to such InterestPeriod plus 4% per annum and (ii) each Base Rate Advance shall bear interest ata rate per annum equal to the Base Rate Option otherwise applicable to the BaseRate Advance plus 4% per annum.

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“Defaulting Lender” shall mean any Lender that (a) hasfailed to fund any portion of the Advances, participations with respect toFacility Letters of Credit, or participations in Swing Loans required to befunded by it hereunder within one Business Day of the date required to befunded by it hereunder unless such failure has been cured and all interestaccruing as a result of such failure has been fully paid in accordance with theterms hereof, (b) has otherwise failed to pay over to the Administrative Agentor any other Lender any other amount required to be paid by it hereunder withinone Business Day of the date when due, unless the subject of a good faithdispute or unless such failure has been cured and all interest accruing as aresult of such failure has been fully paid in accordance with the terms hereof,(c) has failed at any time to comply with the provisions of Section 12.2with respect to purchasing participations from the other Lenders, whereby suchLender’s share of any payment received, whether by setoff or otherwise, is inexcess of its Ratable Share of such payments due and payable to all of theLenders, or (d) has since the date of this Agreement been deemed insolvent by aGovernmental Authority or become the subject of a bankruptcy, receivership,conservatorship or insolvency proceeding, or has a parent company that sincethe date of this Agreement been deemed insolvent by a Governmental Authority orbecome the subject of a bankruptcy, receivership, conservatorship or insolvencyproceeding.

“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. 

“Eligible Unencumbered Project” means a Project whichsatisfies all of the following requirements:  (a) such Project is located inthe continental United States; (b) such Project is an institutional grademultifamily property as determined by the Agent in its sole discretion; (c)such Project is owned in fee simple or leased under a Ground Lease containingprovisions allowing leasehold mortgage financing of such lease on termsreasonably acceptable to Administrative Agent (provided that the aggregateamount added to Unencumbered Real Property Value on account of Projects subjectto such Ground Leases shall not exceed twenty percent (20%)) entirely byBorrower or a Wholly Owned Subsidiary which is also a Subsidiary Guarantor; (d)with respect to any Project other than the initial Qualifying UnencumberedProjects shown on Schedule 3.1, such Project is a “market rate” Projectwhich is not subject to any restrictions requiring apartment units to be leasedat below-market rates, or if such rent restrictions do exist, they do not (i)apply to more than twenty percent (20%) of the total residential units in suchProject or (ii) cause more than ten percent (10%) of the total residentialunits in all of the then-current Eligible Unencumbered Projects to be subjectto such rent restrictions; (e) neither such Project nor any interest of theBorrower or any Subsidiary therein, is subject to any Lien (other thanPermitted Liens (but not Liens of the type described in clause (e) of thedefinition of Permitted Liens)) or a Negative Pledge; (f) if such Property isowned or leased by a Subsidiary Guarantor (i) none of Borrower’s direct orindirect ownership interest in such Subsidiary Guarantor is subject to any Lien(other than Permitted Liens (but not Liens of the type described in clause (e)of the definition of Permitted Liens)) or to a Negative Pledge; and (ii)Borrower directly, or indirectly through a Subsidiary, has the right to takethe following actions without the need to obtain the consent of any Person: (x) to sell, transfer or otherwise dispose of such Project and (y) to create aLien on such Project as security for Indebtedness of the Borrower or suchSubsidiary Guarantor, as applicable; (g) such Project has been completed and isfree of all structural defects or major architectural deficiencies, title defects,environmental conditions or other adverse matters except for defects,deficiencies, conditions or other matters individually or collectively whichare not material to the profitable operation of such Project ;  and (h) as ofthe date such Project first becomes an Eligible Unencumbered Project, at least75% of the residential units within such Project are subject to third partyoccupancy leases.

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“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(including but not limited to Subtitle I relating to underground storagetanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;the Toxic Substances Control Act; the Safe Drinking Water Act; the OccupationalSafety and 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 the same may be amended orsupplemented from time to time, and any successor statute of similar import,and the rules and regulation thereunder, as from time to time in effect.

“ERISA Affiliate” shall mean, at any time, any trade orbusiness (whether or not incorporated) under common control with the Borrower andare treated as a single employer under Section 414 of the Code.

“ERISA Event shall mean (a) a reportable event (underSection 4043 of ERISA and regulations thereunder) with respect to a PensionPlan; (b) a withdrawal by Borrower or any ERISA Affiliate from a Pension Plansubject to Section 4063 of ERISA during a plan year in which it was asubstantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessationof operations that is treated as such a withdrawal under Section 4062(e) ofERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliatefrom a Multiemployer Plan or notification that a Multiemployer Plan is inreorganization; (d) the filing of a notice of intent to terminate, thetreatment of a Plan amendment as a termination under Sections 4041 or 4041A ofERISA, or the commencement of proceedings by the PBGC to terminate a PensionPlan or Multiemployer Plan; (e) an event or condition which constitutes groundsunder Section 4042 of ERISA for the termination of, or the appointment of atrustee to administer, any Pension Plan or Multiemployer Plan; or (f) theimposition of any liability under Title IV of ERISA, other than for PBGCpremiums due but not delinquent under Section 4007 of ERISA, upon Borrower orany ERISA Affiliate.

“ERISA Group” shall mean, at any time, the Borrower andall members of a controlled group of corporations and all trades or businesses(whether or not incorporated) under common control and all other entitieswhich, together with the Borrower, are treated as a single employer underSection 414 of the Internal Revenue Code.

“Event of Default” shall mean any of the events describedin Article VIII and referred to therein as an “Event of Default.”

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“Excluded Taxes” shall mean, with respect to theAdministrative Agent, any Lender, the Issuing Lender or any other recipient ofany payment to be made by or on account of any obligation of the Borrowerhereunder, (a) taxes imposed on or measured by its overall net income (howeverdenominated), and franchise taxes imposed on it (in lieu of net income taxes),by the jurisdiction (or any political subdivision thereof) under the Laws ofwhich such recipient is organized or in which its principal office is locatedor, in the case of any Lender, in which its applicable lending office islocated, (b) any branch profits taxes imposed by the United States of Americaor any similar tax imposed by any other jurisdiction in which the Borrower islocated and (c) in the case of a Foreign Lender, any withholding tax that isimposed on amounts payable to such Foreign Lender at the time such ForeignLender becomes a party hereto (or designates a new lending office) or isattributable to such Foreign Lender’s failure or inability (other than as aresult of a Change in Law) to comply with Section 4.2, except to theextent that such Foreign Lender (or its assignor, if any) was entitled, at thetime of designation of a new lending office (or assignment), to receiveadditional amounts from the Borrower with respect to such withholding tax pursuantto Section 4.2.

“Executive Order No. 13224” shall mean the Executive OrderNo. 13224 on Terrorist Financing, effective September 24, 2001, as the same hasbeen, or shall hereafter be, renewed, extended, amended or replaced.

“Facility Letter of Credit” means any of the OriginalFacility Letters of Credit or any Letter of Credit issued after the AgreementExecution Date pursuant to Section 2.22 of this Agreement.

“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 TerminationDate” shall mean October 17, 2013, which shall be the day immediately prior tothe third (3rd ) anniversary of the Agreement Execution Date, or if such day isnot a Business Day the last Business Day immediately preceding such day, assuch date may be extended pursuant to Section 2.23 hereof.

“Federal Funds Effective Rate” for any day shall mean therate per annum (based on a year of 360 days and actual days elapsed and roundedupward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of NewYork (or any successor) on such day as being the weighted average of the rateson overnight federal funds transactions arranged by federal funds brokers onthe previous trading day, as computed and announced by such Federal ReserveBank (or any successor) in substantially the same manner as such FederalReserve Bank computes and announces the weighted average it refers to as the“Federal Funds Effective Rate” as of the date of this Agreement; provided, ifsuch Federal Reserve Bank (or its successor) does not announce such rate on anyday, the “Federal Funds Effective Rate” for such day shall be the Federal FundsEffective Rate for the last day on which such rate was announced.

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“Federal Funds Open Rate” for any day shall mean the rateper annum (based on a year of 360 days and actual days elapsed) which is thedaily federal funds open rate as quoted by ICAP North America, Inc. (or anysuccessor) as set forth on the Bloomberg Screen BTMM for that day opposite thecaption “OPEN” (or on such other substitute Bloomberg Screen that displays suchrate), or as set forth on such other recognized electronic source used for thepurpose of displaying such rate as selected by the Administrative Agent (forpurposes of this definition, an “**Alternate Source**”) (or if such rate forsuch day does not appear on the Bloomberg Screen BTMM (or any substitutescreen) or on any Alternate Source, or if there shall at any time, for anyreason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) orany Alternate Source, a comparable replacement rate determined by theAdministrative Agent at such time (which determination shall be conclusiveabsent manifest error); provided however, that if such day is not a BusinessDay, the Federal Funds Open Rate for such day shall be the “open” rate on theimmediately preceding Business Day.  If and when the Federal Funds Open Ratechanges, the rate of interest with respect to any Advance to which the FederalFunds Open Rate applies will change automatically without notice to theBorrower, effective on the date of any such change.

“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 Interest Rate Hedge.

“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 any real property(which property may be owned by a member of the Consolidated Group, anInvestment Affiliate or an unrelated third party) having a value in excess ofthe amount of such Indebtedness and which has been designated by the Borroweras a “First Mortgage Receivable” in its most recent compliance certificate.

“Foreign Lender” shall mean any Lender that is organizedunder the Laws of a jurisdiction other than that in which the Borrower isresident for tax purposes.  For purposes of this definition, the United Statesof America, each State thereof and the District of Columbia shall be deemed toconstitute a single jurisdiction.

“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 are in effect from time to time, applied in amanner consistent with that used in preparing the financial statementshereunder and in all circumstances subject to theprovisions of Section 1.3.

“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.

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“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 case guaranteeingor in effect guaranteeing any Indebtedness, leases, or dividends (the “primaryobligations”) of any other third Person (the “primary obligor”) inany manner, whether directly or indirectly, including, without limitation, anyobligation of the guaranteeing person, whether or not contingent, (i) topurchase any such primary obligation or any property constituting direct orindirect security therefor, (ii) to advance or supply funds (1) forthe purchase or payment of any such primary obligation or (2) to maintainworking capital or equity capital of the primary obligor or otherwise tomaintain the net worth or solvency of the primary obligor, (iii) topurchase property, securities or services primarily for the purpose of assuringthe owner of any such primary obligation of the ability of the primary obligorto make payment of such primary obligation or (iv) otherwise to assure orhold harmless the owner of any such primary obligation against loss in respectthereof; provided, however, that the term Guarantee Obligationshall not include endorsements of instruments for deposit or collection in theordinary course of business, or any indemnification obligations arising in theordinary course of business, including without limitation guaranties of non-recourse“carve-out” exceptions in secured loans and environmental indemnity agreementsin favor of secured lenders.  The amount of any Guarantee Obligation of anyguaranteeing person shall be deemed to be the maximum stated amount of theprimary obligation relating to such Guarantee Obligation (or, if less, themaximum stated liability set forth in the instrument embodying such GuaranteeObligation), provided, that in the absence of any such stated amount orstated liability, the amount of such Guarantee Obligation shall be suchguaranteeing person’s maximum reasonably anticipated liability in respectthereof as determined by the Borrower in good faith.

“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 Personhas not assumed or otherwise become liable for the payment thereof.

“Indemnified Taxes” shall mean Taxes other than ExcludedTaxes.

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“Interest Period” shallmean the period of time selected by the Borrower in connection with (and toapply to) any election permitted hereunder by the Borrower to have Advances bear interest under the LIBOR Rate Option.  Subject to the last sentence ofthis definition, such period shall be one, two, three or six Months. SuchInterest Period shall commence on the effective date of such LIBOR Rate Option,which shall be (i) the Borrowing Date if the Borrower is requesting new Loans,or (ii) the date of renewal of or conversion to the LIBOR Rate Option if theBorrower is renewing or converting to the LIBOR Rate Option applicable tooutstanding Loans.  Notwithstanding the second sentence hereof: (A) anyInterest Period which would otherwise end on a date which is not a Business Dayshall be extended to the next succeeding Business Day unless such Business Dayfalls in the next calendar month, in which case such Interest Period shall endon the next preceding Business Day, and (B) the Borrower shall not select,convert to or renew an Interest Period for any portion of the Loans that wouldend after the Facility Termination Date.

“Interest Rate Hedge” shall mean an interest rateexchange, collar, cap, swap, adjustable strike cap, adjustable strike corridoror similar agreements entered into by the Loan Parties or their Subsidiaries inorder to provide protection to, or minimize the impact upon, the Borrower, theGuarantor and/or their Subsidiaries of increasing floating rates of interestapplicable to Indebtedness.

“Interest Rate Option” shall mean any LIBOR Rate Option orBase Rate Option.

“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.  For the purposesof this Agreement, The Residences at Carronade, LLC, an Ohio limited liabilitycompany, shall not be deemed to be an “Investment Affiliate” of the Borrower.

“Issuance Date” is defined in Section 2.22.

“Issuance Notice” is defined in Section 2.22.

“Issuing Lender” means, with respect to each FacilityLetter of Credit, the Lender which issues such Facility Letter of Credit.  PNCBank, National Association shall be the sole Issuing Lender.

“Law” shall mean any law (including common law),constitution, statute, treaty, regulation, rule, ordinance, opinion, release,ruling, order, injunction, writ, decree, bond, judgment, authorization orapproval, lien or award by a Governmental Authority.

“Lender Provided Interest Rate Hedge” shall mean anInterest Rate Hedge which is provided by any Lender or its Affiliate and withrespect to which the Administrative Agent confirms: (i) is documented in astandard International Swap Dealer Association Agreement, and (ii) provides forthe method of calculating the reimbursable amount of the provider’s creditexposure in a reasonable and customary manner.

“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.

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“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 in Section2.22.

“Letter of Credit Obligation” shall mean, as of any dateof determination, the aggregate amount available to be drawn under alloutstanding Facility Letters of Credit on such date (if any Letter of Creditshall increase in amount automatically in the future, such aggregate amountavailable to be drawn shall currently give effect to any such future increase)plus the aggregate Reimbursement Obligations on such date.

“Letter of Credit Request” is defined in Section 2.22.

“Leverage Ratio” shall mean, as of the end of any date ofdetermination, the ratio of (A) Consolidated Outstanding Indebtedness onsuch date to (B) Total Asset Value on such date. 

“LIBOR Applicable Margin” meansas of any date, with respect to the percentage spread to be added to the LIBORRate under the LIBOR Rate Option, the percentage in effect on such date underthe definition of “Applicable Margin”.

“LIBOR Rate” shall mean, with respect to the Loanscomprising any Borrowing Tranche to which the LIBOR Rate Option applies for anyInterest Period, the interest rate per annum determined by the AdministrativeAgent by dividing (the resulting quotient rounded upwards, if necessary, to thenearest 1/100th of 1% per annum) (i) the rate which appears on the BloombergPage BBAM1 (or on such other substitute Bloomberg page that displays rates atwhich US dollar deposits are offered by leading banks in the London interbankdeposit market), or the rate which is quoted by another source selected by theAdministrative Agent which has been approved by the British Bankers’Association as an authorized information vendor for the purpose of displayingrates at which US dollar deposits are offered by leading banks in the Londoninterbank deposit market (for purposes of this definition, an “**AlternateSource**”), at approximately 11:00 a.m., London time, two (2) Business Daysprior to the commencement of such Interest Period as the London interbankoffered rate for U.S. Dollars for an amount comparable to such BorrowingTranche and having a borrowing date and a maturity comparable to such InterestPeriod (or if there shall at any time, for any reason, no longer exist aBloomberg Page BBAM1 (or any substitute page) or any Alternate Source, acomparable replacement rate determined by the Administrative Agent at such time(which determination shall be conclusive absent manifest error)), by (ii) anumber equal to 1.00 minus the LIBOR Reserve Percentage.  LIBOR may also beexpressed by the following formula:

                                        London interbank offered rates quoted by Bloomberg

            LIBOR Rate  =     or appropriatesuccessor as shown on Bloomberg Page BBAM1                                        1.00 -  LIBOR Reserve Percentage

 

The LIBOR Rate shall be adjusted with respect to any Loanto which the LIBOR Rate Option applies that is outstanding on the effectivedate of any change in the LIBOR Reserve Percentage as of such effective date. The Administrative Agent shall give prompt notice to the Borrower of the LIBORRate as determined or adjusted in accordance herewith, which determinationshall be conclusive absent manifest error.

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“LIBOR Rate Advance” means anAdvance which bears interest at the LIBOR Rate Option.

“LIBOR Rate Loan” means a Loanwhich bears interest at the LIBOR Rate Option.

“LIBOR Rate Option” shall mean the option of the Borrowerto have Advances bear interest at the rate and under the terms set forth in Section2.3.

“LIBOR Reserve Percentage” shall mean as of any day themaximum percentage in effect on such day, as prescribed by the Board ofGovernors of the Federal Reserve System (or any successor) for determining thereserve requirements (including supplemental, marginal and emergency reserverequirements) with respect to eurocurrency funding (currently referred to as “**EurocurrencyLiabilities**”).

“Lien” means any lien (statutoryor other), mortgage, pledge, negative pledge, hypothecation, assignment,deposit arrangement, encumbrance or priority or other security agreement orpreferential arrangement of any kind or nature whatsoever (including, withoutlimitation, the interest of a vendor or lessor under any conditional sale,Capitalized Lease or other title retention agreement).

“Loan” means, with respect to aLender, such Lender’s Ratable Share 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.

“Loan Request” shall have the meaning specified in Section2.10.

“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.

“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.

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“Month” with respect to an Interest Period under the LIBORRate Option, shall mean the interval between the days in consecutive calendarmonths numerically corresponding to the first day of such Interest Period.  Ifany LIBOR Rate Interest Period begins on a day of a calendar month for whichthere is no numerically corresponding day in the month in which such InterestPeriod is to end, the final month of such Interest Period shall be deemed toend on the last Business Day of such final month.

“Moody’s” means Moody’sInvestors Service, Inc. and its successors.

“Multiemployer Plan shall mean any employee benefit planwhich is a “multiemployer plan” within the meaning of Section 4001(a)(3) ofERISA and to which the Borrower or any member of the ERISA Group is then makingor accruing an obligation to make contributions or, within the preceding fivePlan years, has made or had an obligation to make such 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 fromInterest Rate Hedges or any other Financial Contract.  “Unrealized losses”means the fair market value of the cost to such Person of replacing suchInterest Rate Hedge or other Financial Contract as of the date of determination(assuming the Interest Rate Hedge or other Financial Contract were to beterminated as of that date), and “unrealized profits” means the fair marketvalue of the gain to such Person of replacing such Interest Rate Hedge or otherFinancial Contract as of the date of determination (assuming such Interest RateHedge or other Financial Contract 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-Consenting Lender” shall have the meaning specifiedin Section 9.2.

“Non-Recourse Indebtedness” means, with respect to anyPerson, Secured Indebtedness for which the liability of such Person (exceptwith respect to fraud, Environmental Laws liability, bankruptcy and othercustomary non-recourse “carve-out” exceptions) either is contractually limitedto collateral securing such Indebtedness or is so limited by operation of law.

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“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.

“Obligation” shall mean any obligation or liability of anyof the Loan Parties, howsoever created, arising or evidenced, whether direct orindirect, absolute or contingent, now or hereafter existing, or due or tobecome due, under or in connection with (i) this Agreement, the Notes, theFacility Letters of Credit, the Administrative Agent’s Letter or any other LoanDocument whether to the Administrative Agent, any of the Lenders or theirAffiliates or other persons provided for under such Loan Documents and (ii) anyLender Provided Interest Rate Hedge.

“Original Agreement” is definedin the Recitals to this Agreement.

“Original Facility Letters ofCredit” means those Letters of Credit issued under the Original Agreement whichare outstanding on the Agreement Execution Date, as identified on Schedule1.1 attached hereto.

“Other Taxes” shall meanall present or future stamp or documentary taxes or any other excise orproperty taxes, charges or similar levies arising from any payment madehereunder or under any other Loan Document or from the execution, delivery orenforcement of, or otherwise with respect to, this Agreement or any other LoanDocument.

“Participants” is defined in Section13.4.

“Payment Date” means, (i) withrespect to the payment of interest accrued on any LIBOR Rate Advance or SwingAdvance ninety (90) or less days in term, the maturity date of any suchAdvance, or with respect to an Advance having a term beyond ninety (90) days,then any such interest payments shall be due every ninety (90) days thereafter,or (ii) with respect to the payment of interest accrued on any Base RateAdvance and the payment of the Commitment Fee, the first Business Day of eachApril, July, October and January.

“PBGC” means the Pension BenefitGuaranty Corporation established pursuant to Subtitle A of Title IV to ERISA,or any successor thereto.

“Pension Plan” shall mean any “employee pension benefitplan” (as such term is defined in Section 3(2) of ERISA), other than aMultiemployer Plan, that is subject to Title IV of ERISA and is sponsored ormaintained by Borrower or any ERISA Affiliate or to which Borrower or any ERISAAffiliate contributes or has an obligation to contribute, or in the case of amultiple employer or other plan described in Section 4064(a) of ERISA, has madecontributions at any times during the immediately preceding five plan years.

“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.

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“Plan” shall mean at anytime an employee pension benefit plan (including a Multiple Employer Plan, butnot a Multiemployer Plan) which is covered by Title IV of ERISA or is subjectto the minimum funding standards under Section 412 of the Code and either (i)is maintained by any member of the ERISA Group for employees of any member ofthe ERISA Group or (ii) has at any time within the preceding five years beenmaintained by any entity which was at such time a member of the ERISA Group foremployees of any entity which was at such time a member of the ERISA Group.

“PNC” shall mean PNC Bank, National Association, itssuccessors and assigns.

“Potential Default” shall mean any event or conditionwhich with notice or passage of time, or both, would constitute an Event ofDefault.

“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.

“Prime Rate” shall mean the interest rate per annumannounced from time to time by the Administrative Agent at its Principal Officeas its then prime rate, which rate may not be the lowest or most favorable ratethen being charged commercial borrowers or others by the Administrative Agent. Any change in the Prime Rate shall take effect at the opening of business onthe day such change is announced.

“Principal Office shall mean the main banking office ofthe Administrative Agent in Pittsburgh, Pennsylvania.

“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.

“Published Rate” shall mean the rate of interest publishedeach Business Day in The Wall Street Journal “Money Rates” listing underthe caption “London Interbank Offered Rates” for a one month period (or, if nosuch rate is published therein for any reason, then the Published Rate shall bethe rate at which U.S. dollar deposits are offered by leading banks in theLondon interbank deposit market for a one month period as published in anotherpublication selected by the Administrative Agent).

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

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“Ratable Share” shall mean the proportion that a Lender’sCommitment (excluding the Swing Loan Commitment) bears to the Commitments(excluding the Swing Loan Commitment) of all of the Lenders.  If theCommitments have terminated or expired, the Ratable Shares shall be determinedbased upon the Commitments (excluding the Swing Loan Commitment) most recentlyin effect, giving effect to any assignments.

“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 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 Lender and the Administrative Agent in respect of allunreimbursed payments or disbursements made by the Lenders, the Issuing Lenderand the Administrative Agent under or in respect of the Facility Letters ofCredit.

“Release” is defined in Section3.3. 

“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” shall mean

(A)       If there are only two (2) Lenders, all Lenders(other than any Defaulting Lender), and

(B)       If there exist three (3) or more Lenders,Lenders (other than any Defaulting Lender) having more than 66-2⁄3% of theaggregate amount of the Commitments of the Lenders (excluding any DefaultingLender) or, after the termination of the Commitments, the outstanding Loans andRatable Share of Letter of Credit Obligations of the Lenders (excluding anyDefaulting Lender).

“Reserve Requirement” means,with respect to a 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.

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“Revolving Credit Advances”shall mean all Advances made to Borrower hereunder other than Swing Loans.

“Revolving Credit Loan” means,with respect to a Lender, such Lender’s Ratable Share of any Revolving CreditAdvance.

“Revolving Facility Usage” shall mean at any time the sumof the outstanding Revolving Credit Loans, the outstanding Swing Loans, and theLetter of Credit Obligations.

“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 ERISA Group for employeesof the Borrower or any member of the ERISA 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 6.21.  

“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.

“Swing Advances” means, as of any date, collectively, allSwing Loans then outstanding under this Facility.

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“Swing Loans” shall mean collectively and Swing Loanshall mean separately all Swing Loans or any Swing Loan made by PNC to theBorrower pursuant to Section 2.21 hereof.

“Swing Loan Commitment” means the obligation of the SwingLender to make Swing Loans not exceeding $20,000,000, which is included in, andis not in addition to, the Swing Lender’s total Commitment hereunder.

“Swing Lender” shall mean PNC Bank, National Association,in its capacity as a Lender.

“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.

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“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 any such Projects which have not been owned or leased byany combination of Borrower, other members of the Consolidated Group orInvestment Affiliates and included in Borrower’s financial statements for atleast six (6) fiscal quarters as of the end of the most recent fiscal quarterfor which financial results have been reported, other than Net Operating Incomefrom Overlimit General Projects (as defined below) then owned or leased byBorrower or any other member of the Consolidated Group which Net OperatingIncome will be included in this clause (i)) divided by the Capitalization Rate,plus (ii) 100% of cost for any such Projects first acquired or leased duringsuch six (6) fiscal quarter period (including the amount of any assumedIndebtedness secured thereby) which are not Overlimit General Projects, plus (iii) the Consolidated Group Pro Rata Share of NetOperating Income for the most recent four (4) consecutive fiscalquarters of the Borrower for which financial results have been reported attributable to Projects then owned or leased by anInvestment Affiliate (excluding Net Operating Income attributable to any suchProjects which have not been owned or leased by any combination ofBorrower, other members of the Consolidated Group or Investment Affiliates for six (6) fiscalquarters as of the end of such most recent fiscal quarter for which financialresults have been reported, other than Net Operating Income from OverlimitGeneral Projects then owned or leased by an Investment Affiliate which NetOperating Income will be included in this clause (iii)) 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 six (6) fiscal quarter period (including the amount ofany assumed Indebtedness secured thereby) which are not Overlimit GeneralProjects; plus (v) cash and Cash Equivalents owned byBorrower or any other member of the Consolidated Group as of the end of themost recent fiscal quarter for which financial results have been reported, plus(vi) the Consolidated Group Pro Rata Share of all cash and Cash Equivalentsowned by Investment Affiliates as of the end of the most recent fiscal quarterfinancial results have been reported plus (vii) Real Property Under Developmentand Undeveloped Land of the Consolidated Group, valued at cost, plus (viii) theConsolidated Group Pro Rata Share of any Real Property Under Development andUndeveloped Land of Investment Affiliates, valued at cost, plus (ix) FirstMortgage Receivables owned by the Consolidated Group, valued in accordance withGAAP, plus (x) the Consolidated Group Pro Rata Share of First MortgageReceivables owned by any Investment Affiliates, valued in accordance withGAAP.  As used herein, the term “Overlimit General Projects” shall mean,if at any time the aggregate amount contributed to Total Asset Value underclauses (ii) and (iv) of this definition on account of acquired Projects ownedor leased for more than four (4) quarters but less than seven (7) quarterswould exceed twenty percent (20%) of Total Asset Value, a sufficient number ofsuch Project(s) which would otherwise be valued at cost under such clauses (ii)or (iv), which the Company shall designate to instead be valued in accordancewith clauses (i) or (iii), so that the aggregate value of the remainingProjects owned or leased for more than four (4) quarters but less than seven(7) quarters which are included at cost under clauses (ii) and (iv) of thisdefinition do not exceed twenty percent (20%) of Total Asset Value. For the avoidance of doubt, such references to“less than seven (7) quarters” shall mean that the applicable Project shall beincluded at cost in up to but not more than six (6) quarterly financialstatements of Borrower. 

 “Type” means, with respect toany Advance, its nature as a Base Rate Advance, a LIBOR Rate Advance or a SwingAdvance.

“Undeveloped Land” means, as ofany date, any undeveloped land owned from time to time by the Borrower or anyother member of the Consolidated Group.

**“**Unencumbered Real Property Value” shall mean, asof any date, (i) Unencumbered Real Property Adjusted NOI divided by theCapitalization Rate applicable thereto, plus (ii) the cost of all QualifyingUnencumbered Projects then owned by Borrower or a Subsidiary Guarantor whichhave not been owned by any combination of Borrower, other members of theConsolidated Group or Investment Affiliates and included in Borrower’sfinancial statements for six (6) consecutive fiscal quarters as of the end ofthe most recent fiscal quarter of Borrower for which financial results havebeen reported other than Overlimit Unencumbered Projects, with the cost of eachsuch Qualifying Unencumbered Project being the amount capitalized as “realestate” on Borrower’s balance sheet plus any portion of the acquisition costrequired to be allocated as an intangible asset by GAAP.  As used herein, theterm “Overlimit Unencumbered Projects” shall mean, if at any time the aggregateamount contributed to Unencumbered Real Property Value under clause (i) of thisdefinition for acquired Qualifying Unencumbered Projects owned or leased formore than four (4) quarters but less than seven (7) quarters would exceedtwenty percent (20%) of Unencumbered Real Property Value, a sufficient numberof such Project(s) which would otherwise be valued at cost under such clause(ii), which the Company shall designate to instead be valued in accordance withclause (i), so that the aggregate value of the remaining QualifyingUnencumbered Projects owned or leased for more than four (4) quarters but lessthan seven (7) quarters which are included at cost under clause (ii) of thisdefinition does not exceed twenty percent (20%) of Unencumbered Real PropertyValue. For the avoidance of doubt, such references to “less than seven (7)quarters” shall mean that the applicable Project shall be included at cost inup to but not more than six (6) quarterly financial statements of Borrower.

“Unencumbered Real Property Adjusted NOI” shall mean, asof any date,  the Net Operating Income for the most recent four (4) consecutivefiscal quarters of Borrower for which financial results have been reportedattributable to Qualifying Unencumbered Projects then owned or leased byBorrower or a Subsidiary Guarantor (excluding Net Operating Income attributableto any such Qualifying Unencumbered Projects which have not been owned orleased by any combination of Borrower, other members of the Consolidated Groupor Investment Affiliates and included in Borrower’s financial statements forsix (6) fiscal quarters as of the end of the most recent fiscal quarter ofBorrower for which financial results have been reported other than NetOperating Income from Overlimit Unencumbered Projects then owned or leased byBorrower or a Subsidiary Guarantor which shall be included in this definition),less (i) management fees equal to 2.5% of the aggregate gross revenuesattributable to such Qualifying Unencumbered Projects for such period, and less(ii) a capital expenditure reserve equal to $150 per unit for such QualifyingUnencumbered Projects.

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“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.

“USA Patriot Act” shall mean the Uniting and StrengtheningAmerica by Providing Appropriate Tools Required to Intercept and ObstructTerrorism Act of 2001, Public Law 107‐56, as the same has been, orshall hereafter be, renewed, extended, amended or replaced.

“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.

## 1.2             Construction

.  Unless the context of this Agreement otherwiseclearly requires, the following rules of construction shall apply to thisAgreement and each of the other Loan Documents: (i) references to the pluralinclude the singular, the plural, the part and the whole and the words“include,” “includes” and “including” shall be deemed to be followed by thephrase “without limitation”; (ii) the words “hereof,” “herein,” “hereunder,”“hereto” and similar terms in this Agreement or any other Loan Document referto this Agreement or such other Loan Document as a whole; (iii) article, section,subsection, clause, schedule and exhibit references are to this Agreement orother Loan Document, as the case may be, unless otherwise specified; (iv)reference to any Person includes such Person’s successors and assigns; (v)reference to any agreement, including this Agreement and any other LoanDocument together with the schedules and exhibits hereto or thereto, documentor instrument means such agreement, document or instrument as amended,modified, replaced, substituted for, superseded or restated; (vi) relative tothe determination of any period of time, “from” means “from and including,”“to” means “to but excluding,” and “through” means “through and including”;(vii) the words “asset” and “property” shall be construed to have the samemeaning and effect and to refer to any and all tangible and intangible assetsand properties, including cash, securities, accounts and contract rights,(viii) section headings herein and in each other Loan Document are included forconvenience and shall not affect the interpretation of this Agreement or suchLoan Document, and (ix) unless otherwise specified, all references herein totimes of day shall be references to Eastern Time.

## 1.3             Accounting Principles

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.  Except as otherwise provided in this Agreement,all computations and determinations as to accounting or financial matters andall financial statements to be delivered pursuant to this Agreement shall bemade and prepared in accordance with GAAP (including principles ofconsolidation where appropriate), and all accounting or financial terms shallhave the meanings ascribed to such terms by GAAP; provided, however, that allaccounting terms used in Article VII (and all defined terms used in thedefinition of any accounting term used in Article VII shall have themeaning given to such terms (and defined terms) under GAAP as in effect on thedate hereof applied on a basis consistent with those used in preparingstatements referred to in Section 6.4.  In the event of any change afterthe date hereof in GAAP, and if such change would affect the computation of anyof the financial covenants set forth in Article VII, then the partieshereto agree to endeavor, in good faith, to agree upon an amendment to thisAgreement that would adjust such financial covenants in a manner that wouldpreserve the original intent thereof, but would allow compliance therewith tobe determined in accordance with the Borrower’s financial statements at thattime, provided that, until so amended such financial covenants shall continueto be computed in accordance with GAAP prior to such change therein.

            Notwithstanding any provision containedherein to the contrary, solely for purposes of calculating any financialcovenant required hereunder, such calculation shall ignore the application ofthe Convertible Debt Accounting Guidance, if and to the extent otherwiseapplicable to Borrower’s financial statements.  If at any time anymaterial change in GAAP would materially affect the computation of anyfinancial ratio or requirement set forth in any of the Loan Documents, andeither the Borrower or the Required Lenders shall so request, theAdministrative Agent, the Lenders and the Borrower shall negotiate in goodfaith to amend such ratio or requirement to preserve the original intentthereof in light of such change in GAAP (subject to the approval of theRequired Lenders (which shall not be unreasonably withheld)); provide that,until so amended, (i) such ratio or requirement shall continue to be computedin accordance with GAAP prior to such change therein and (ii) the Borrowershall provide to the Administrative Agent and the Lenders an explanation of theimpact of such change in reasonable detail satisfactory to the AdministrativeAgent.

# ARTICLEIITHECREDIT

## 2.1             Generally

.  Subject tothe terms 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 Revolving Facility Usage toexceed the then-current Aggregate Commitment.  Each Lender shall fund itsRatable Share of each such Revolving Credit Advance and no Lender will berequired to fund any amounts which, when aggregated with such Lender’s RatableShare of all other Advances then outstanding, would exceed such Lender’sthen-current Commitment.  This facility (“Facility”) is a revolvingcredit facility and, subject to the provisions of this Agreement, Borrower mayrequest Advances hereunder, repay such Advances and reborrow Advances at anytime prior to the Facility Termination Date.

## 2.2             Revolving Credit Advances

.  Each RevolvingCredit Advance hereunder shall consist of Loans made from the several Lendersratably in proportion to the ratio their respective Commitments bear to theAggregate Commitment.  The Revolving Credit Advances may be Base Rate Advances,LIBOR Rate Advances or a combination thereof, selected by Borrower inaccordance with Sections 2.10 and 2.11.

## 2.3             Interest Rate Options

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.  The Borrower shall pay interest in respect of theoutstanding unpaid principal amount of the Loans as selected by it from theBase Rate Option or LIBOR Rate Option set forth below applicable to theAdvances, it being understood that, subject to the provisions of thisAgreement, the Borrower may select different Interest Rate Options anddifferent Interest Periods to apply simultaneously to the Loans comprisingdifferent Borrowing Tranches and may convert to or renew one or more InterestRate Options with respect to all or any portion of the Loans comprising anyBorrowing Tranche; provided that there shall not be at any one time outstandingmore than six (6) Borrowing Tranches in the aggregate among all of the Loansand provided further that if an Event of Default or Potential Default existsand is continuing, the Borrower may not request, convert to, or renew the LIBORRate Option for any Advances and the Required Lenders may demand that allexisting Borrowing Tranches bearing interest under the LIBOR Rate Option shallbe converted immediately to the Base Rate Option, subject to the obligation ofthe Borrower to pay any indemnity under Article IV in connection withsuch conversion.  The Borrower shall have the right to select from thefollowing Interest Rate Options applicable to the Advances:

### (a)               Base Rate Option:  A fluctuating rate per annum (computedon the basis of a year of 360 days and actual days elapsed) equal to the BaseRate plus the Base Rate Applicable Margin, such interest rate to changeautomatically from time to time effective as of the effective date of eachchange in the Base Rate; or

### (b)              LIBOR Rate Option:  A rate per annum (computed on thebasis of a year of 360 days and actual days elapsed) equal to the LIBOR Rateplus the LIBOR Applicable Margin.

Subject to Section 2.13, only the Base RateOption shall apply to the Swing Loans.

## 2.4             Commitment Fee

.  Accruingfrom the date hereof until the Facility Termination Date, the Borrower agreesto pay to the Administrative Agent for the account of each Lender according toits Ratable Share, a nonrefundable commitment fee (the “**Commitment Fee**”)equal to the Applicable Commitment Fee Rate (computed on the basis of a year of360 days and actual days elapsed) multiplied by the average daily differencebetween the amount of (i) the Commitments (for purposes of this computation,PNC’s Swing Loans shall be deemed to be borrowed amounts under its Commitment)and (ii) the Revolving Facility Usage; provided, however, that any CommitmentFee accrued with respect to the Commitment of a Defaulting Lender during the periodprior to the time such Lender became a Defaulting Lender and unpaid at suchtime shall not be payable by the Borrower so long as such Lender shall be aDefaulting Lender except to the extent that such Commitment Fee shall otherwisehave been due and payable by the Borrower prior to such time; and providedfurther that no Commitment Fee shall accrue with respect to the Commitment of aDefaulting Lender so long as such Lender shall be a Defaulting Lender.  Subjectto the proviso in the directly preceding sentence, all Commitment Fees shall bepayable in arrears on each Payment Date.

## 2.5             Other Fees

.  The Borrower agrees to pay all fees payable to theAdministrative Agent pursuant to the Borrower’s letter agreements with (i) theAdministrative Agent dated as of September 9, 2010, and (ii) the SyndicationAgent dated as of September 23, 2010 (collectively, the “Fee Letter”).

## 2.6             Usury

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.  This Agreement and each Note are subject to theexpress condition that at no time shall Borrower be obligated or required topay interest on the principal balance of the Loan at a rate which could subjectany Lender to either civil or criminal liability as a result of being in excessof the Maximum Legal Rate.  If by the terms of this Agreement or the LoanDocuments, Borrower is at any time required or obligated to pay interest on theprincipal balance due hereunder at a rate in excess of the Maximum Legal Rate,the interest rate or the Default Rate, as the case may be, shall be deemed tobe immediately reduced to the Maximum Legal Rate and all previous payments inexcess of the Maximum Legal Rate shall be deemed to have been payments inreduction of principal and not on account of the interest due hereunder.  Allsums paid or agreed to be paid to Lender for the use, forbearance, or detentionof the sums due under the Loan, shall, to the extent permitted by applicablelaw, be amortized, prorated, allocated, and spread throughout the full statedterm of the Loan until payment in full so that the rate or amount of intereston account of the Loan does not exceed the Maximum Legal Rate of interest fromtime to time in effect and applicable to the Loan for so long as the Loan isoutstanding.

## 2.7             Voluntary Commitment Reductions

.  Borrower may, at any time upon five (5) days priorwritten notice to the Administrative Agent, elect to reduce or terminate theAggregate Commitment under this Facility provided that (i) each such reductionshall be in the minimum amount of $5,000,000, (ii) all such reductions shallreduce each Lender’s Commitment and the Swing Loans Commitment on a pro ratabasis, (iii) any amount by which the Revolving Facility Usage exceeds thereduced Aggregate Commitment shall be paid on the effective date of, and as acondition to such reduction, (iv) Borrower shall pay all costs associated withany related prepayments of LIBOR Rate Advances or due under any otherprovisions contained in this Agreement and (v) Borrower shall not reduce theAggregate Commitment below $100,000,000 unless Borrower elects to terminate theAggregate Commitment in its entirety.

## 2.8             Minimum Amount of Each Advance

.  Each LIBOR Rate Advance shall be in an amount notless than $1,000,000 or a whole multiple of $100,000 in excess thereof.  EachBase Rate Advance and each Swing Advance shall be in the minimum amount of$250,000; provided, however, that, subject to Section 2.1, any Base RateAdvance or Swing Advance may be in the amount of the unused AggregateCommitment.

## 2.9             Final Principal Payment; Optional Prepayments

.  Any outstanding Advances and all other unpaid Obligationsshall be paid in full by Borrower on the Facility Termination Date.  TheBorrower may, without premium or penalty, upon at least one (1) Business Day’snotice to the Administrative Agent given not later than 1:00 p.m. on suchBusiness Day, in the case of all Advances other than Swing Advances (in whichcase such notice shall be given not later than 1:00 p.m. on such date ofprepayment), prepay the Advances, which notice shall specify the date andamount of prepayment and whether the prepayment is of LIBOR Rate Advances, BaseRate Advances, or a combination thereof, and if a combination thereof, theamount allocable to each; provided, however, that (i) any partial prepaymentunder this Subsection shall be in an amount not less than $1,000,000 or a wholemultiple of $100,000 in excess thereof and; (ii) any LIBOR Rate Advance prepaidon any day other than the last day of the applicable LIBOR Interest Period mustbe accompanied by any amounts payable pursuant to Section 4.4.  Uponreceipt of any such notice the Administrative Agent shall promptly notify eachLender thereof.  If any such notice is given, the amount specified in suchnotice shall be due and payable on the date specified therein, together withany amounts payable pursuant to Section 4.4.

## 2.10         Revolving Credit Loan Requests; Swing Loan Requests

.

### (a)               Revolving Credit Loan Requests

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.  Except as otherwise provided herein, the Borrowermay from time to time prior to the Facility Termination Date request theLenders to make Loans, or renew or convert the Interest Rate Option applicableto existing Loans, by delivering to the Administrative Agent, not later thannoon, Eastern time, (i) three (3) Business Days prior to the proposed BorrowingDate with respect to the making of Loans to which the LIBOR Rate Option appliesor the conversion to or the renewal of the LIBOR Rate Option for any Loans; and(ii) the same Business Day of the proposed Borrowing Date with respect to themaking of a Loan to which the Base Rate Option applies or the last day of thepreceding Interest Period with respect to the conversion to the Base RateOption for any Loan, of a duly completed request therefor substantially in theform of Exhibit F-1 or a request by telephone immediately confirmed inwriting by letter, facsimile or telex in such form (each, a “**Loan Request**”),it being understood that the Administrative Agent may rely on the authority ofany individual making such a telephonic request without the necessity ofreceipt of such written confirmation.  Each Loan Request shall be irrevocableand shall specify the aggregate amount of the proposed Loans comprising eachBorrowing Tranche, and, if applicable, the Interest Period.

Except as otherwise provided herein, theBorrower may from time to time prior to the Facility Termination Date requestPNC to make Swing Loans by delivery to PNC not later than 2:00 p.m., Easterntime, on the proposed Borrowing Date of a duly completed request thereforsubstantially in the form of Exhibit F-2 hereto or a request bytelephone immediately confirmed in writing by letter, facsimile or telex (each,a “**Swing Loan Request**”), it being understood that the AdministrativeAgent may rely on the authority of any individual making such a telephonicrequest without the necessity of receipt of such written confirmation.  EachSwing Loan Request shall be irrevocable and shall specify the proposedBorrowing Date and the principal amount of such Swing Loan.

The Administrative Agent shall, promptly afterreceipt by it of a Loan Request pursuant to this Section 2.10, notifythe Lenders of its receipt of such Loan Request specifying the informationprovided by the Borrower and the apportionment among the Lenders of therequested Loans as determined by the Administrative Agent.  Each Lender shallremit the principal amount of each Loan to the Administrative Agent such thatthe Administrative Agent is able to, and the Administrative Agent shall, to theextent the Lenders have made funds available to it for such purpose and subjectto Section 5.2 fund such Loans to the Borrower in U.S. Dollars andimmediately available funds at the Principal Office prior to 2:00 p.m., on theapplicable Borrowing Date; provided that if any Lender fails to remit suchfunds to the Administrative Agent in a timely manner, the Administrative Agentmay elect in its sole discretion to fund with its own funds the Loans of suchLender on such Borrowing Date, and such Lender shall be subject to therepayment obligation in Section 2.19.

## 2.11         Conversion and Continuation of Outstanding Advances

.  Base Rate Advances shall continue as Base RateAdvances unless and until such Base Rate Advances are converted into LIBOR RateAdvances.  Each LIBOR Rate Advance shall continue as a LIBOR Rate Advance untilthe end of the then applicable Interest Period therefor, at which time suchLIBOR Rate Advance shall be automatically converted into a Base Rate Advanceunless the Borrower shall have given the Administrative Agent a Loan Requestrequesting that, at the end of such Interest Period, such LIBOR Rate Advanceeither continue as a LIBOR Rate Advance for the same or another Interest Periodor be converted to an Advance of another Type.

## 2.12         Changes in Interest Rate, Etc.

  Each Base Rate Advance shall bear interest on theoutstanding principal amount thereof, for each day from and including the datesuch Advance is made or is converted from a LIBOR Rate Advance into a Base RateAdvance to but excluding the date it becomes due or is converted into a LIBORRate Advance, at a rate per annum equal to the Base Rate for such day.  Changesin the rate of interest on that portion of any Advance maintained as a BaseRate Advance will take effect simultaneously with each change in the BaseRate.  Each LIBOR Rate Advance shall bear interest from and including the firstday of the Interest Period applicable thereto to (but not including) the lastday of such Interest Period at the interest rate determined as applicable tosuch LIBOR Rate Advance.

## 2.13         Rates Applicable After Event of Default

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.  During the continuance of an Event of Default theAdministrative Agent may, at the direction of the Required Lenders, by noticeto the Borrower, declare that (i) no Advance may be made as, converted into, orcontinued beyond the expiration of any then-current Interest Period as, a LIBORRate Advance, and (ii) the Default Rate shall apply (which notice may berevoked at the option of the Required Lenders notwithstanding any provision of Section9.2 requiring unanimous consent of the Lenders to changes in interestrates), provided, however, that the Default Rate shall become applicableautomatically if an Event of Default occurs under Section 8.1, 8.2,or 8.3, unless waived by the Required Lenders.

## 2.14         Method of Payment

.  All payments of the Obligations hereunder shall bemade, without setoff, deduction, or counterclaim, in immediately availablefunds to the Administrative Agent at the Principal Office of AdministrativeAgent by noon, Eastern time, on the date when due and shall be applied ratablyby the Administrative Agent among the Lenders.  Asprovided elsewhere herein, all Lenders’ interests in the Revolving CreditAdvances 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, Eastern 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 other office 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 dueuntil the date paid.  The Administrative Agent is hereby authorized to chargethe account of the Borrower maintained with PNC Bank, National Association foreach payment of principal, interest and fees as it becomes due hereunder.

## 2.15         Notes; Telephonic Notices

.  Each Lender is hereby authorized to record theprincipal amount of each of its Loans and each repayment on the scheduleattached to its Note, provided, however, that the failure to so record shallnot affect the Borrower’s obligations under such Note.  The Borrower herebyauthorizes the Lenders and the Administrative Agent to extend, convert orcontinue Advances, effect selections of Types of Advances and to transfer fundsbased on written notices made by any Authorized Officer and Borrower agrees todeliver promptly to the Administrative Agent such written notice.  TheAdministrative Agent will at the request of the Borrower, from time to time,but not more often than monthly, provide notice of the amount of theoutstanding Aggregate Commitment, the Type of Advance, and the applicableinterest rate, if for a LIBOR Rate Advance.  Upon a Lender’s furnishing toBorrower an affidavit to such effect, if a Note is mutilated, destroyed, lostor stolen, Borrower shall deliver to such Lender, in substitution therefore, anew note containing the same terms and conditions as such Note being replaced.

## 2.16         Interest Payment Dates; Interest and Fee Basis

.  Interest accrued on each Advance shall be payableon each Payment Date, commencing with the first such date to occur after thedate hereof, at maturity, whether by acceleration or otherwise, and upon anytermination of the Aggregate Commitment in its entirety.  Interest on LIBORRate Advances, Facility Letter of Credit Fees and Commitment Fees shall becalculated for actual days elapsed on the basis of a 360-day year.  Interest onBase Rate Advances and Swing Advances shall be calculated for actual dayselapsed on the basis of a 360 day year. Interest shall be payable for the dayan Advance is made but not for the day of any payment on the amount paid ifpayment is received prior to noon, Eastern time. If any payment of principal ofor interest on an Advance shall become due on a day which is not a BusinessDay, such payment shall be made on the next succeeding Business Day and, in thecase of a principal payment, such extension of time shall be included incomputing interest in connection with such payment.

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## 2.17         Notification of Advances, Interest Rates and Prepayments

.  The Administrative Agent will notify each Lenderof the contents of each Loan Request, Conversion/Continuation Notice, andrepayment notice received by it hereunder not later than the close of businesson the Business Day such notice is received by the Administrative Agent.  TheAdministrative Agent will notify each Lender of the interest rate applicable toeach LIBOR Rate Advance promptly upon determination of such interest rate andwill give each Lender prompt notice of each change in the Base Rate.

## 2.18         Increasing Lenders and New Lenders

.The Borrower may, at any timeprior to the second anniversary of the Agreement Execution Date, request that(1) the current Lenders increase their Commitments (any current Lender whichelects to increase its Commitment shall be referred to as an "IncreasingLender") or (2) one or more new lenders (each a "New Lender")join this Agreement and provide a Commitment hereunder, subject to thefollowing terms and conditions:

2.18.1   No Obligation to Increase.  No current Lender shall beobligated to increase its Commitment and any increase in the Commitment by anycurrent Lender shall be in the sole discretion of such current Lender. 

2.18.2   Defaults.  There shall exist no Events of Default orPotential Default on the effective date of such increase after giving effect tosuch increase. 

2.18.3   Aggregate Commitment.  After giving effect to suchincrease, the total Aggregate Commitment shall not exceed $300,000,000. 

2.18.4   Resolutions; Opinion.  The Loan Parties shall deliver tothe Administrative Agent on or before the effective date of such increase thefollowing documents in a form reasonably acceptable to the AdministrativeAgent: (1) certifications of their corporate secretaries with attachedresolutions certifying that the increase in the Aggregate Commitment has beenapproved by such Loan Parties, and (2) an opinion of counsel addressed to theAdministrative Agent and the Lenders addressing the authorization and executionof the Loan Documents by, and enforceability of the Loan Documents against, theLoan Parties. 

2.18.5   Notes.  The Borrower shall execute and deliver (1) to eachIncreasing Lender a replacement revolving credit Note reflecting the new amountof such Increasing Lender's Commitment after giving effect to the increase (andthe prior Note issued to such Increasing Lender shall be deemed to beterminated) and (2) to each New Lender a Note reflecting the amount of such NewLender's Commitment. 

2.18.6   Approval of New Lenders.  Any New Lender shall be subjectto the approval of the Borrower, which approval shall not be unreasonablywithheld or delayed, and the Administrative Agent.

2.18.7   Increasing Lenders.  Each Increasing Lender shall confirmits agreement to increase its Commitment pursuant to an acknowledgement in aform acceptable to the Administrative Agent, signed by it and the Borrower anddelivered to the Administrative Agent at least five (5) days before the effectivedate of such increase. 

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2.18.8   New Lenders--Joinder.  Each New Lender shall execute anamendment to this Agreement in substantially the form of Exhibit Gattached hereto pursuant to which such New Lender shall join and become a partyto this Agreement and the other Loan Documents with a Commitment in the amountset forth in such amendment. 

Notwithstanding anything inthis Section 2.18 to the contrary, in the event Borrower requests that Lendersincrease their Commitments, current Lenders shall be presented with and shallhave the right to increase their Commitments before any solicitation is made ofa new, prospective lender to provide a new commitment hereunder.

(ii)        Treatmentof Outstanding Loans and Letters of Credit.  

(a)        Repayment of Outstanding Loans;Borrowing of New Loans.  On the effective date of such increase, theBorrower shall repay all Loans then outstanding, subject to the Borrower'sindemnity obligations under Section 4.3; provided that it may borrow newLoans with a Borrowing Date on such date. Each of the Lenders shall participatein any new Loans made on or after such date in accordance with their respectiveRatable Shares after giving effect to the increase in the Aggregate Commitmentcontemplated by this Section 2.18.

(b)        Outstanding Letters of Credit. Repayment of OutstandingLoans; Borrowing of New Loans.  On the effective date of such increase,each Increasing Lender and each New Lender (i) will be deemed to have purchaseda participation in each then outstanding Facility Letter of Credit equal to itsRatable Share of such Facility Letter of Credit and the participation of eachother Lender in such Facility Letter of Credit shall be adjusted accordinglyand (ii) will acquire, (and will pay to the Administrative Agent, for theaccount of each Lender, in immediately available funds, an amount equal to) itsRatable Share of all outstanding Participation Advances.

## 2.19         Presumptions by Administrative Agent

.  Unless theAdministrative Agent shall have received notice from the Borrower prior to thedate on which any payment is due to the Administrative Agent for the account ofthe Lenders or the Issuing Lender hereunder that the Borrower will not makesuch payment, the Administrative Agent may assume that the Borrower has madesuch payment on such date in accordance herewith and may, in reliance upon suchassumption, distribute to the Lenders or the Issuing Lender, as the case maybe, the amount due.  In such event, if the Borrower has not in fact made suchpayment, then each of the Lenders or the Issuing Lender, as the case may be,severally agrees to repay to the Administrative Agent forthwith on demand theamount so distributed to such Lender or the Issuing Lender, with interestthereon, for each day from and including the date such amount is distributed toit to but excluding the date of payment to the Administrative Agent, at thegreater of the Federal Funds Effective Rate and a rate determined by theAdministrative Agent in accordance with banking industry rules on interbankcompensation.

## 2.20         Replacement of a Lender

.  In the event any Lender (i) gives notice under Section4.5, (ii) requests compensation under Section 4.1, or requires theBorrower to pay any additional amount to any Lender or any Governmental Bodyfor the account of any Lender pursuant to Section 4.2, (iii) is aDefaulting Lender, (iv) becomes subject to the control of an GovernmentalAuthority (other than normal and customary supervision), or (v) is aNon-Consenting Lender referred to in Section 9.2, then in any suchevent the Borrower may, at its sole expense, upon notice to such Lender and theAdministrative Agent, require such Lender to assign and delegate, withoutrecourse (in accordance with and subject to the restrictions contained in, andconsents required by, Article XIII, all of its interests, rights andobligations under this Agreement and the related Loan Documents to an assigneethat shall assume such obligations (which assignee may be another Lender, if aLender accepts such assignment), provided that:

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#### (i)                the Borrower shall have paid to the Administrative Agent theassignment fee specified in Section 13.2;

#### (ii)              such Lender shall have received payment of an amount equal to theoutstanding principal of its Loans and Participation Advances, accrued interestthereon, accrued fees and all other amounts payable to it hereunder and underthe other Loan Documents (including any amounts under Section 4.3) fromthe assignee (to the extent of such outstanding principal and accrued interestand fees) or the Borrower (in the case of all other amounts);

#### (iii)            in the case of any such assignment resulting from a claim forcompensation under Section 4.1] or payments required to be made pursuantto Section 4.2, such assignment will result in a reduction in suchcompensation or payments thereafter; and

#### (iv)            such assignment does not conflict with applicable Law.

A Lender shall not be required to make any suchassignment or delegation if, prior thereto, as a result of a waiver by suchLender or otherwise, the circumstances entitling the Borrower to require suchassignment and delegation cease to apply.

## 2.21         Swing Advances.

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 In addition to the other options available to theBorrower hereunder, the Swing Loans Commitment shall be available for SwingAdvances subject to the following terms and conditions.  Swing Advances shallbe made available for same day borrowings provided that a Swing Loan Request isgiven in accordance with Section 2.10 hereof during the periodcommencing on the Agreement Effective Date and ending on a date ten (10) daysprior to the then-current Facility Termination Date.  Each Swing Advance shallbear interest at a variable rate for each day such Swing Advance is outstandingequal to the Base Rate Option for such day.  In no event shall the Swing Lenderbe required to fund a Swing Advance if it would increase the total aggregateoutstanding Loans by Swing Lender hereunder plus its Ratable Share ofReimbursement Obligations to an amount in excess of the Swing Lender’sCommitment.  No Swing Advance may be made to repay a Swing Advance, butBorrower may repay Swing Advances from subsequent pro rata Advances hereunder. On the fifteenth day and on the last Business Day of each calendar month, ifany Swing Advances have not previously been paid, each Lender irrevocablyagrees to purchase its Ratable Share of any Swing Advance made by the SwingLender regardless of whether the conditions for disbursement are satisfied atthe time of such purchase, including the existence of an Event of Defaulthereunder provided that Swing Lender did not have actual knowledge of suchEvent of Default at the time the Swing Advance was made and provided furtherthat no Lender shall be required to have total outstanding Loans plus itsRatable Share of Letter of Credit Obligations exceed its Commitment.  Suchpurchase shall take place by the time PNC so requests (which request may betelephonic or written notice by letter, facsimile or telex), which shall not beearlier than 3:00 p.m. on the Business Day next after the date the Lendersreceive such request from PNC.  From and after the date it is so purchased,each such Swing Advance shall, to the extent purchased, (i) be treated asa 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 Swing Advance except that all interest accruing on orattributable to such Swing 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 Swing 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 RatableShare of a Swing Advance one of the events described in Section 8.7shall have occurred and such event prevents the consummation of the purchasecontemplated by preceding provisions, each Lender will purchase an undividedparticipating interest in the outstanding Swing Advance in an amount equal toits Ratable Share of such Swing Advance.  From and after the date of eachLender’s purchase of its participating interest in a Swing Advance, if theSwing Lender receives any payment on account thereof, the Swing Lender willdistribute to 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 theSwing Lender and is required to be returned to the Borrower, each Lender willreturn to the Swing Lender any portion thereof previously distributed by theSwing Lender to it.  If any Lender fails to so purchase its Ratable Share ofany Swing Advance, such Lender shall be deemed to be a Defaulting Lenderhereunder.

## 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 Lender hereby agrees to issue forthe account of the Borrower, one or more Facility Letters of Credit inaccordance with this Section 2.22, from time to time during the periodcommencing on the Agreement Effective Date and ending on a date sixty (60) daysprior to the then-current Facility Termination Date.

### (b)              Types and Amounts. The Issuing Lender 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 such IssuingLender, after giving effect to the Facility Letter of Credit requestedhereunder, shall exceed any limit imposed by law or regulation upon suchIssuing Lender;

#### (ii)              issue any Facility Letter of Credit if, after giving effectthereto, (1) the then applicable Revolving Facility Usage would exceed the thencurrent 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 second anniversary of the then-current Facility Termination Date (providedthat Borrower agrees to cash collateralize any Facility Letter of Credit thatremains outstanding on a date forty-five (45) days prior to the actual FacilityTermination Date as provided in Subsection (i) of this Section 2.22  andin Section 9.1 below).

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

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#### (i)                the Borrower shall have delivered to the Issuing Lender at suchtimes and in such manner as the Issuing Lender 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 anyinconsistency exists between such documents and the Loan Documents, the termsof the Loan Documents shall control) and the proposed Facility Letter of Creditshall be reasonably satisfactory to the Issuing Lender 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 Lender from issuing the requested FacilityLetter of Credit and no law, rule or regulation applicable to the IssuingLender and no request or directive (whether or not having the force of law)from any governmental authority with jurisdiction over the Issuing Lender shallprohibit or request that the Issuing Lender refrain from the issuance ofLetters of Credit generally or the issuance of the requested Facility Letter orCredit in particular; and

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

### (d)              Procedure for Issuance of Facility Letters of Credit. Borrower shall give the Issuing Lender and theAdministrative Agent at least five (5) Business Days’ prior written notice, orsuch shorter period as may be agreed to by the Issuing Lender, of any requestedissuance of a Facility Letter of Credit under this Agreement (a “Letter ofCredit Request”) and shall (i) immediately provide the Issuing Lender and theAdministrative Agent with a telecopy of the written notice required hereunderwhich has been signed by an Authorized Officer or a telex containing allinformation required to be contained in such written notice and (ii) promptlyprovide the Issuing Lender and the Administrative Agent (in no event later thanthe requested date of issuance) with the written notice required hereundercontaining the original signature of an authorized officer; such notice shallbe irrevocable, except as provided below in this Section 2.22(d), andshall 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 be received by suchIssuing Lender and the Administrative Agent not later than noon, Eastern time,on the last Business Day on which notice can be given under this Section2.22(d).

Subject to the terms and conditions of this Section2.22 and provided that the applicable conditions set forth in Article Vhereof have been satisfied, the Issuing Lender shall, on the Issuance Date,issue a Facility Letter of Credit on behalf of the Borrower in accordance withthe Letter of Credit Request and the Issuing Lender’s usual and customarybusiness practices unless the Issuing Lender has actually received (i) writtennotice from the Borrower specifically revoking the Letter of Credit Requestwith respect to such Facility Letter of Credit given not later than BusinessDay immediately preceding the Issuance Date, or (ii) written or telephonicnotice from the Administrative Agent stating that the issuance of such FacilityLetter of Credit would violate Section 2.22(b).

The Issuing Lender shall give the Administrative Agent(who shall promptly notify Lenders) and the Borrower written or telex notice,or telephonic notice confirmed promptly thereafter in writing, of the issuanceof a Facility Letter of Credit (the “Issuance Notice”).

The Issuing Lender shall not extend or amend any FacilityLetter of Credit unless the requirements of this Section 2.22(d) are metas though a new Facility Letter of Credit was being requested and issued.

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

#### (i)                The Issuing Lender 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 Base Rate; provided that if an Eventof Default or a Potential 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 Lender fordrawings under a Facility Letter of Credit issued by the Issuing Lender nolater than the next succeeding Business Day after the payment by the IssuingLender and until repaid such Reimbursement Obligation shall bear interest atthe Default Rate.

#### (ii)              Any action taken or omitted to be taken by the Issuing Lenderunder or in connection with any Facility Letter of Credit, if taken or omittedin the absence of willful misconduct or gross negligence, shall not put theIssuing Lender under any resulting liability to any Lender or, provided thatsuch Issuing Lender has complied with the procedures specified in Section2.22(d), relieve that Lender of its obligations hereunder to the IssuingLender. In determining whether to pay under any Facility Letter of Credit, theIssuing Lender shall have no obligation relative to the Lenders other than toconfirm that any documents required to be delivered under such Letter of Creditappear to have been delivered in compliance, and that they appear to comply ontheir face, with the requirements of such Letter of Credit.

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### (f)               Participation.

#### (i)                Immediately upon the Agreement Execution Date with respect to theOriginal Facility Letters of Credit, by their execution hereof, and immediatelyupon each issuance by the Issuing Lender of any other Facility Letter of Creditin 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 Lender, without recourse, representation orwarranty, an undivided interest and participation equal to such Lender’sRatable Share in such Facility Letter of Credit (including, without limitation,all obligations 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 Lender in any subsequent Facility Letters of Creditissued by the Issuing Lender on behalf of Borrower shall be reduced by suchLender’s Ratable Share of the undrawn portion of each Facility Letter of Creditoutstanding.

#### (ii)              In the event that the Issuing Lender makes any payment under anyFacility Letter of Credit and the Borrower shall not have repaid such amount tothe Issuing Lender pursuant to Section 2.22(g) hereof, the IssuingLender shall promptly notify the Administrative Agent, which shall promptlynotify each Lender of such failure, and each Lender shall promptly andunconditionally pay to the Administrative Agent for the account of the IssuingLender the amount of such Lender’s Ratable Share of the unreimbursed amount ofsuch payment, and the Administrative Agent shall promptly pay such amount tothe Issuing Lender.  Lender’s payments of its Ratable Share of suchReimbursement Obligation as aforesaid shall be deemed to be a Loan by suchLender and shall constitute outstanding principal under such Lender’s Note. The failure of any Lender to make available to the Administrative Agent for theaccount of the Issuing Lender its Ratable Share of the unreimbursed amount ofany such payment shall not relieve any other Lender of its obligation hereunderto make available to the Administrative Agent for the account of such IssuingLender its Ratable Share of the unreimbursed amount of any payment on the datesuch payment is to be made, but no Lender shall be responsible for the failureof any other Lender to make available to the Administrative Agent its RatableShare of the unreimbursed amount of any payment on the date such payment is tobe made.  Any Lender which fails to 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 Lender receives a payment on account of aReimbursement Obligation, including any interest thereon, the Issuing Lendershall 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’sRatable Share thereof.

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#### (iv)            Upon the request of the Administrative Agent or any Lender, theIssuing Lender shall furnish to such Administrative Agent or Lender copies ofany Facility Letter of Credit to which the Issuing Lender is party and suchother documentation as may reasonably be requested by the Administrative Agentor Lender.

#### (v)              The obligations of a Lender to make payments to theAdministrative Agent for the account of the Issuing Lender 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 Lender to comply with the terms ofthis Agreement relating to the issuance of such Facility Letter of Credit, andsuch payments 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 Lender theamount of all Advances for Reimbursement Obligations, interest and otheramounts payable to the Issuing Lender 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 Lenderor any other Person, under all circumstances, including without limitation anyof the 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 Lender, 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 Event of Default.

In the event any payment by the Borrower received by theIssuing Lender or the Administrative Agent with respect to a Facility Letter ofCredit and distributed by the Administrative Agent to the Lenders on account oftheir participations is thereafter set aside, avoided or recovered from theAdministrative Agent or Issuing Lender in connection with any receivership, liquidation,reorganization or bankruptcy proceeding, each Lender which received suchdistribution shall, upon demand by the Administrative Agent, contribute suchLender’s Ratable Share of the amount set aside, avoided or recovered togetherwith interest at the rate required to be paid by the Issuing Lender or theAdministrative Agent upon the amount required to be repaid by the IssuingLender or the Administrative Agent.

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

#### (i)                (a)        The Borrower shall pay to the Administrative Agent,for the ratable account of the Lenders (including the Issuing Lender), basedupon the Lenders’ respective Ratable Shares, a per annum fee (the “FacilityLetter of Credit Fee”) as a percentage of the face amount of each FacilityLetter of Credit outstanding equal to the LIBOR Applicable Margin in effectfrom time to time while such Facility Letter of Credit is outstanding.  TheFacility Letter of Credit Fee relating to any Facility Letter of Credit shallaccrue on a daily basis and shall be due and payable in arrears on the firstBusiness Day of each calendar quarter following the issuance of such FacilityLetter of Credit and, to the extent any such fees are then due and unpaid, onthe Facility Termination Date or any other earlier date that the Obligationsare due and payable in full.  The Administrative Agent shall promptly remitsuch Facility Letter of Credit Fees, when paid, to the other Lenders inaccordance with their Ratable Shares thereof.  The Borrower shall not have anyliability to any Lender for the failure of the Administrative Agent to promptlydeliver funds to any such Lender and shall be deemed to have made all suchpayments on the date the respective payment is made by the Borrower to theAdministrative Agent, provided such payment is received by the time specifiedin Section 2.14 hereof.

#### (ii)              (b)        The Issuing Lender also shall have the right toreceive solely for its own account an issuance fee equal to one‐eighth ofone percent (0.125%) of the face amount of each Facility Letter of Credit,payable by the Borrower on the Issuance Date for each such Facility Letter ofCredit and on the date of any increase therein or extension thereof.  TheIssuing Lender shall also be entitled to receive its reasonable out‐of‐pocketcosts and the Issuing Lender’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 earlier of (i) a date forty-five daysprior to the Facility Termination Date or (ii) the occurrence of an Event ofDefault, establish a special collateral account (the “Letter of CreditCollateral Account”) at the Administrative Agent’s office at the addressspecified pursuant to Article XIV, in the name of the Borrower butunder the sole dominion and control of the Administrative Agent, for thebenefit of the Lenders, and in which the Borrower shall have no interest otherthan as set forth in Section 9.1.  The Letter of Credit CollateralAccount shall hold the deposits the Borrower is required to make either (i) onthe forty-fifth (45th) day prior to the Facility Termination Dateunder Section 2.22(a) with respect to any Facility Letter of Credit whichremains outstanding on such date or (ii) immediately after an Event of Defaulton account of any outstanding Facility Letters of Credit as described in Section 9.1. In addition to the foregoing, the Borrower hereby grants to the AdministrativeAgent, for the benefit of the Lenders, a security interest in and to the Letterof Credit Collateral Account and any funds that may hereafter be on deposit insuch account, including income earned thereon.  The Lenders acknowledge andagree that the Borrower has no obligation to fund the Letter of Credit CollateralAccount unless and until so required under Section 9.1 hereof.

## 2.23         Extension of Facility Termination Date

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.  The Borrower may, by notice (an “ExtensionRequest”) to the Administrative Agent not later than sixty (60) days andnot earlier than ninety (90) days prior to the Facility Termination Date, electthat the Facility Termination Date be extended for an additional one (1) yearperiod (the “Extension Period”). The Administrative Agent shall promptlynotify the Lenders of receipt of an Extension Request from the Borrower.  Upon receipt by the Administrative Agent of an ExtensionRequest, accompanied by an extension fee equal to 0.25% of the then currentAggregate Commitment (the “Extension Fee”), and provided that (i) theBorrower executes and delivers to the Administrative Agent such documents asthe Administrative Agent may reasonably request to confirm that such ExtensionRequest has been properly authorized on behalf of the Borrower and (ii) that noEvent of Default or Potential Default has occurred and is continuing either onthe date of receipt of such Extension Request or onthe original Facility Termination Date, the Facility Termination Date**shallbe automatically extended to a date one (1) year thereafter without any needfor consent or approval of the Lenders.  The Extension Fee shall be remitted tothe Lenders on a pro rata basis in accordance with their respective RatableShares as of the effective date of such extension.  If the Borrower fails tomake a timely Extension Request or fails to remit the Extension Fee or if anEvent of Default or Potential Default then has occurred and is then continuing,the Commitments will terminate on the then-current Facility Termination Dateand on such date the Borrower will repay all Advances and collateralize allFacility Letters of Credit as provided in Section 2.22 hereof.

# ARTICLEIII UNENCUMBEREDPOOL PROPERTIES

##             3.1       Eligibility of Projects

**.**

### (a)               As of the Agreement Execution Date, the Administrative Agent hasapproved for inclusion as Qualifying Unencumbered Projects those Projectsidentified on Schedule 3.1, and such Projects shall become the initialQualifying Unencumbered Projects.

### (b)              If, after the Agreement Execution Date, Borrower desires toinclude any additional Projects as Qualifying Unencumbered Projects Borrowershall so notify the Administrative Agent in writing and obtain the approval ofthe Administrative Agent. The Administrative Agent’s approval shall beconclusive and no approval from the Lenders shall be required so long as suchadditional Projects meet the criteria set forth in the definition of “EligibleUnencumbered Project”. If  such additional Project does not meet such criteriait shall only be included in Qualifying Unencumbered Projects if the RequiredLenders shall have also approved the inclusion of such Project. No Propertywill be approved by the Administrative Agent unless it is an EligibleUnencumbered Project and unless and until the Borrower delivers to theAdministrative Agent the following, in form and substance satisfactory to theAdministrative Agent: 

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

#### (ii)              a certificate of  Borrower certifying that insurance of the typerequired hereunder is in effect with respect to such Project and that, to thebest of Borrower’s knowledge, there are no material environmental concerns withrespect to such Project; and

#### (iii)            such other information, including operating statements and siteplans, that the Administrative Agent may reasonably request in order toevaluate such Project.

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### (c)               If, after receipt and review of the foregoing, unlessAdministrative Agent has reasonably determined that the additional Project doesnot satisfy the requirements to be an Eligible Unencumbered Project, theAdministrative 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 theAdministrative Agent has determined that the additional Project does notsatisfy the requirements to be an Eligible Unencumbered Project and thereforethat addition of such Property as a Qualifying Unencumbered Project requiresRequired Lender approval, the Administrative Agent shall so notify the Borrowerand the Lenders and shall forward to the Lenders all documents and informationsubmitted by Borrower with respect to such additional Project. In such eventeach Lender shall notify the Administrative Agent whether it approves of thedesignation of such Project as a Qualifying Unencumbered Project,notwithstanding such non-compliance, within ten (10) Business Days of receiptof such notice and all such documents and information.  If a Lender shall failto so notify the Administrative Agent, then such Lender shall be deemed to haveapproved of such Project.  Upon approval of such Project by the AdministrativeAgent, or, if required, by Required Lenders, and upon execution and delivery ofall of the documents required to be provided under Section 3.2, suchProject shall become a Qualifying Unencumbered Project .

## 3.2             Conditions Precedent to a Project Becoming a QualifyingUnencumbered Project

**.**** **No Property shall become aQualifying Unencumbered Project until the Administrative Agent, or, if required,the Required Lenders, shall have approved of such Project as provided in Section3.1, and Borrower shall have caused to be executed and delivered to theAdministrative Agent the following instruments, documents and agreements inrespect of such Property, each to be in form and substance reasonablysatisfactory to the Administrative Agent:

### (a)               if such Project is owned by a Subsidiary that is not already aSubsidiary Guarantor, a joinder agreement with respect to the SubsidiaryGuaranty in the form attached thereto as Exhibit A executed by such Subsidiaryand all of the items that would have been required to be delivered to theAdministrative Agent under Sections 5.1(b) through (f) had suchSubsidiary been a Loan Party on the Effective Date;

### (b)              a Compliance Certificate calculated after giving effect to theinclusion of such Project as a Qualifying Unencumbered Project; and

### (c)               such other due diligence materials, instruments, documents,certificates, and opinions as the Administrative Agent may reasonably request. 

## 3.3             Release of Subsidiary Guarantors and Qualifying Unencumbered Projects

.  From time to time Borrower may request, upon notless than two (2) Business Days prior written notice to the AdministrativeAgent, that the Subsidiary owning a Qualifying Unencumbered Project be releasedfrom the Guaranty, or that any Qualifying Unencumbered Project be released fromsuch status in whole or in part, which release (the “Release”) shall beeffected by the Administrative Agent if all of the following conditions aresatisfied as of the date of such Release:

### (a)               Borrower shall have delivered a Compliance Certificate showingpro forma compliance with the covenants set forth in Section 10.1 aftergiving effect to such Release;and

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### (b)              If after giving effect to such Release (and taking into accountany concurrent addition of a new Qualifying Unencumbered Project pursuant to Section3.1), the resulting reduction in the Unencumbered Real Property Value andUnencumbered Real Property Adjusted NOI would cause a breach of either Section7.20(c) or Section 7.20(d), Borrower shall have repaid suchAdvances, if any, as may be required to reduce the outstanding Advances to themaximum amount of Advances that can be outstanding without creating such abreach of Section 7.20(c) or Section 7.20(d).  In addition, ifafter giving effect to such Release (and taking into account any concurrentaddition of a new Qualifying Unencumbered Project pursuant to Section 3.1), any resulting reduction in the percentage of units in the QualifyingUnencumbered Projects which are physically occupied would cause a breach of Section7.20(e), Borrower shall take the actions required under such Section7.20(e) within the time required thereunder.

In connection with a Release, Borrower shall deliver tothe Administrative Agent a certificate from Borrower’s chief executive officeror chief financial officer regarding the matters referred to in the immediatelypreceding clauses (a) and (b).  Notwithstanding the foregoing, theAdministrative Agent shall not be obligated to release any such Subsidiary fromthe Subsidiary Guaranty if (i) such Subsidiary owns any other QualifyingUnencumbered Projects that are not being so released from such status or (ii)an Event of Default or Potential Default has occurred and is then continuing.

# ARTICLEIVINCREASED COSTS

## 4.1             Increased Costs Generally

.  

### (a)               If any Change in Law shall:

#### (i)                impose, modify or deem applicable any reserve, special deposit,compulsory loan, insurance charge or similar requirement against assets of,deposits with or for the account of, or credit extended or participated in by,any Lender (except any reserve requirement reflected in the LIBOR Rate) or theIssuing Lender;

#### (ii)              subject any Lender or the Issuing Lender to any tax of any kindwhatsoever with respect to this Agreement, any Facility Letter of Credit, anyparticipation in a Facility Letter of Credit or any Loan under the LIBOR RateOption made by it, or change the basis of taxation of payments to such Lenderor the Issuing Lender in respect thereof (except for Indemnified Taxes or OtherTaxes covered by Section 4.2 and the imposition of, or any change in therate of, any Excluded Tax payable by such Lender or the Issuing Lender); or

#### (iii)            impose on any Lender, the Issuing Lender or the London interbankmarket any other condition, cost or expense affecting this Agreement or anyLoan under the LIBOR Rate Option made by such Lender or any Letter of Credit orparticipation therein;

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and the result of any of the foregoing shall be toincrease the cost to such Lender of making or maintaining any Loan under theLIBOR Rate Option (or of maintaining its obligation to make any such Loan), orto increase the cost to such Lender or the Issuing Lender of participating in,issuing or maintaining any Facility Letter of Credit (or of maintaining itsobligation to participate in or to issue any Facility Letter of Credit), or toreduce the amount of any sum received or receivable by such Lender or theIssuing Lender hereunder (whether of principal, interest or any other amount)then, upon request of such Lender or the Issuing Lender, the Borrower will payto such Lender or the Issuing Lender, as the case may be, such additionalamount or amounts as will compensate such Lender or the Issuing Lender, as thecase may be, for such additional costs incurred or reduction suffered.

### (b)              If any Lender or the Issuing Lender determines that any Change inLaw affecting such Lender or the Issuing Lender or any lending office of suchLender or such Lender’s or the Issuing Lender’s holding company, if any,regarding capital requirements has or would have the effect of reducing therate of return on such Lender’s or the Issuing Lender’s capital or on thecapital of such Lender’s or the Issuing Lender’s holding company, if any, as aconsequence of this Agreement, the Commitments of such Lender or the Loans madeby, or participations in Facility Letters of Credit held by, such Lender, orthe Facility Letters of Credit issued by the Issuing Lender, to a level belowthat which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’sholding company could have achieved but for such Change in Law (taking intoconsideration such Lender’s or the Issuing Lender’s policies and the policiesof such Lender’s or the Issuing Lender’s holding company with respect tocapital adequacy), then from time to time the Borrower will pay to such Lenderor the Issuing Lender, as the case may be, such additional amount or amounts aswill compensate such Lender or the Issuing Lender or such Lender’s or theIssuing Lender’s holding company for any such reduction suffered.

### (c)               A certificate of a Lender or the Issuing Lender setting forth theamount or amounts necessary to compensate such Lender or the Issuing Lender orits holding company, as the case may be, as specified in this Section 4.1and delivered to the Borrower shall be conclusive absent manifest error.  TheBorrower shall pay such Lender or the Issuing Lender, as the case may be, theamount shown as due on any such certificate within ten (10) days after receiptthereof.

### (d)              Failure or delay on the part of any Lender or the Issuing Lenderto demand compensation pursuant to this Section shall not constitute a waiverof such Lender’s or the Issuing Lender’s right to demand such compensation,provided that the Borrower shall not be required to compensate a Lender or theIssuing Lender pursuant to this Section for any increased costs incurred orreductions suffered more than nine (9) months prior to the date that suchLender or the Issuing Lender, as the case may be, notifies the Borrower of theChange in Law giving rise to such increased costs or reductions and of suchLender’s or the Issuing Lender’s intention to claim compensation therefor(except that, if the Change in Law giving rise to such increased costs orreductions is retroactive, then the nine (9) month period referred to aboveshall be extended to include the period of retroactive effect thereof).

## 4.2             Taxes

.

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### (a)               Any and all payments by or on account of any obligation of theBorrower hereunder or under any other Loan Document shall be made free andclear of and without reduction or withholding for any Indemnified Taxes orOther Taxes; provided that if the Borrower shall be required by applicable Lawto deduct any Indemnified Taxes (including any Other Taxes) from such payments,then (i) the sum payable shall be increased as necessary so that after makingall required deductions (including deductions applicable to additional sumspayable under this Section) the Administrative Agent, Lender or Issuing Lender,as the case may be, receives an amount equal to the sum it would have receivedhad no such deductions been made, (ii) the Borrower shall make such deductionsand (iii) the Borrower shall timely pay the full amount deducted to therelevant Governmental Authority in accordance with applicable Law.  Without limitingthe provisions above, the Borrower shall timely pay any Other Taxes to therelevant Governmental Authority in accordance with applicable Law.

### (b)              The Borrower shall indemnify the Administrative Agent, eachLender and the Issuing Lender, within ten (10) days after demand therefor, forthe full amount of any Indemnified Taxes or Other Taxes (including IndemnifiedTaxes or Other Taxes imposed or asserted on or attributable to amounts payableunder this Section) paid by the Administrative Agent, such Lender or theIssuing Lender, as the case may be, and any penalties, interest and reasonableexpenses arising therefrom or with respect thereto, whether or not suchIndemnified Taxes or Other Taxes were correctly or legally imposed or assertedby the relevant Governmental Authority.  A certificate as to the amount of suchpayment or liability delivered to the Borrower by a Lender or the IssuingLender (with a copy to the Administrative Agent), or by the AdministrativeAgent on its own behalf or on behalf of a Lender or the Issuing Lender, shallbe conclusive absent manifest error.  As soon as practicable after any paymentof Indemnified Taxes or Other Taxes by the Borrower to a GovernmentalAuthority, the Borrower shall deliver to the Administrative Agent the originalor a certified copy of a receipt issued by such Governmental Authorityevidencing such payment, a copy of the return reporting such payment or otherevidence of such payment reasonably satisfactory to the Administrative Agent.

### (c)               Any Foreign Lender that is entitled to an exemption from orreduction of withholding tax under the Law of the jurisdiction in which theBorrower is resident for tax purposes, or any treaty to which such jurisdictionis a party, with respect to payments hereunder or under any other Loan Documentshall deliver to the Borrower (with a copy to the Administrative Agent), at thetime or times prescribed by applicable Law or reasonably requested by theBorrower or the Administrative Agent, such properly completed and executeddocumentation prescribed by applicable Law as will permit such payments to bemade without withholding or at a reduced rate of withholding.  Notwithstandingthe submission of such documentation claiming a reduced rate of or exemptionfrom U.S. withholding tax, the Administrative Agent shall be entitled towithhold United States federal income taxes at the full 30% withholding rate ifin its reasonable judgment it is required to do so under the due diligencerequirements imposed upon a withholding agent under § 1.1441-7(b) of the UnitedStates Income Tax Regulations.  Further, the Administrative Agent isindemnified under § 1.1461-1(e) of the United States Income Tax Regulationsagainst any claims and demands of any Lender or assignee or participant of aLender for the amount of any tax it deducts and withholds in accordance withregulations under § 1441 of the Internal Revenue Code.  In addition, anyLender, if requested by the Borrower or the Administrative Agent, shall deliversuch other documentation prescribed by applicable Law or reasonably requestedby the Borrower or the Administrative Agent as will enable the Borrower or theAdministrative Agent to determine whether or not such Lender is subject tobackup withholding or information reporting requirements.

### (d)              Without limiting the generality of the foregoing, in the eventthat the Borrower is resident for tax purposes in the United States of America,any Foreign Lender shall deliver to the Borrower and the Administrative Agent(in such number of copies as shall be requested by the recipient) on or priorto the date on which such Foreign Lender becomes a Lender under this Agreement(and from time to time thereafter upon the request of the Borrower or theAdministrative Agent, but only if such Foreign Lender is legally entitled to doso), whichever of the following is applicable:

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#### (i)                two (2) duly completed valid originals of IRS Form W-8BENclaiming eligibility for benefits of an income tax treaty to which the UnitedStates of America is a party,

#### (ii)              two (2) duly completed valid originals of IRS Form W-8ECI,

#### (iii)            in the case of a Foreign Lender claiming the benefits of theexemption for portfolio interest under section 881(c) of the Code, (x) acertificate to the effect that such Foreign Lender is not (A) a “bank” withinthe meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder”of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C)a “controlled foreign corporation” described in section 881(c)(3)(C) of theCode and (y) two duly completed valid originals of IRS Form W-8BEN,

#### (iv)            any other form prescribed by applicable Law as a basis forclaiming exemption from or a reduction in United States Federal withholding taxduly completed together with such supplementary documentation as may beprescribed by applicable Law to permit the Borrower to determine thewithholding or deduction required to be made.

#### (v)              To the extent that any Lender is not a Foreign Lender, suchLender shall submit to the Administrative Agent two (2) originals of an IRSForm W-9 or any other form prescribed by applicable Law demonstrating that suchLender is not a Foreign Lender.

## 4.3             Indemnity

.  In addition to the compensation or paymentsrequired by Section 4.1 or Section 4.2, the Borrower shallindemnify each Lender against all liabilities, losses or expenses (includingloss of anticipated profits, any foreign exchange losses and any loss orexpense arising from the liquidation or reemployment of funds obtained by it tomaintain such Loan, from fees payable to terminate the deposits from which suchfunds were obtained or from the performance of any foreign exchange contract)which such Lender sustains or incurs as a consequence of any:

### (a)               payment, prepayment, conversion or renewal of any Loan to which aLIBOR Rate Option applies on a day other than the last day of the correspondingInterest Period (whether or not such payment or prepayment is mandatory,voluntary or automatic and whether or not such payment or prepayment is thendue),

### (b)              attempt by the Borrower to revoke (expressly, by later inconsistentnotices or otherwise) in whole or part any Loan Requests under Section 2.10or Section 2.11 or notice relating to prepayments under Section 2.9,or

### (c)               default by the Borrower in the performance or observance of anycovenant or condition contained in this Agreement or any other Loan Document,including any failure of the Borrower to pay when due (by acceleration orotherwise) any principal, interest, Commitment Fee or any other amount duehereunder.

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If any Lender sustains or incurs any such lossor expense, it shall from time to time notify the Borrower of the amountdetermined in good faith by such Lender (which determination may include suchassumptions, allocations of costs and expenses and averaging or attributionmethods as such Lender shall deem reasonable) to be necessary to indemnify suchLender for such loss or expense.  Such notice shall set forth in reasonabledetail the basis for such determination.  Such amount shall be due and payableby the Borrower to such Lender ten (10) Business Days after such notice isgiven.

## 4.4             Settlement Date Procedures

. In order to minimize the transfer of funds between theLenders and the Administrative Agent, the Borrower may borrow, repay andreborrow Swing Loans and PNC may make Swing Loans as provided in Section 2.21hereof during the period between Settlement Dates.  The Administrative Agentshall notify each Lender of its Ratable Share of the total of the RevolvingCredit Advances and the Swing Loans (each a “**Required Share**”).  On suchSettlement Date, each Lender shall pay to the Administrative Agent the amountequal to the difference between its Required Share and its Revolving CreditLoans, and the Administrative Agent shall pay to each Lender its Ratable Shareof all payments made by the Borrower to the Administrative Agent with respectto the Revolving Credit Advances.  The Administrative Agent shall also effectsettlement in accordance with the foregoing sentence on the proposed BorrowingDates for Revolving Credit Advances and may at its option effect settlement onany other Business Day.  These settlement procedures are established solely asa matter of administrative convenience, and nothing contained in this Section4.4 shall relieve the Lenders of their obligations to fund Revolving CreditLoans on dates other than a Settlement Date pursuant to Section 2.21. The Administrative Agent may at any time at its option for any reasonwhatsoever require each Lender to pay immediately to the Administrative Agentsuch Lender’s Ratable Share of the outstanding Revolving Credit Advances andeach Lender may at any time require the Administrative Agent to pay immediatelyto such Lender its Ratable Share of all payments made by the Borrower to theAdministrative Agent with respect to the Revolving Credit Advances.

## 4.5             LIBOR Rate Unascertainable; Illegality; Increased Costs;Deposits Not Available

.

### (a)               If on any date on which a LIBOR Rate would otherwise bedetermined, the Administrative Agent shall have determined that:

#### (i)                adequate and reasonable means do not exist for ascertaining suchLIBOR Rate, or

#### (ii)              a contingency has occurred which materially and adversely affectsthe London interbank eurodollar market relating to the LIBOR Rate, theAdministrative Agent shall have the rights specified in Section 4.6.

### (b)              In addition, if at any time any Lender shall have determinedthat:

#### (i)                the making, maintenance or funding of any Loan to which a LIBORRate Option applies has been made impracticable or unlawful by compliance bysuch Lender in good faith with any Law or any interpretation or application thereofby any Governmental Authority or with any request or directive of any suchGovernmental Authority (whether or not having the force of Law), or

#### (ii)              such LIBOR Rate Option will not adequately and fairly reflect thecost to such Lender of the establishment or maintenance of any such Loan, or

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#### (iii)            after making all reasonable efforts, deposits of the relevantamount in Dollars for the relevant Interest Period for a Loan, or to banksgenerally, to which a LIBOR Rate Option applies, respectively, are notavailable to such Lender with respect to such Loan, or to banks generally, inthe interbank eurodollar market,

then the Administrative Agent shall have the rightsspecified in Section 4.6.

## 4.6             Administrative Agent’s and Lender’s Rights

.  In the case of any event specified in Section4.5(a) above, the Administrative Agent shall promptly so notify the Lendersand the Borrower thereof, and in the case of an event specified in Section4.5(b) above, such Lender shall promptly so notify the Administrative Agentand endorse a certificate to such notice as to the specific circumstances ofsuch notice, and the Administrative Agent shall promptly send copies of suchnotice and certificate to the other Lenders and the Borrower.  Upon such dateas shall be specified in such notice (which shall not be earlier than the datesuch notice is given), the obligation of (A) the Lenders, in the case of suchnotice given by the Administrative Agent, or (B) such Lender, in the case ofsuch notice given by such Lender, to allow the Borrower to select, convert toor renew a LIBOR Rate Option shall be suspended until the Administrative Agentshall have later notified the Borrower, or such Lender shall have laternotified the Administrative Agent, of the Administrative Agent’s or suchLender’s, as the case may be, determination that the circumstances giving riseto such previous determination no longer exist.  If at any time theAdministrative Agent makes a determination under Section 4.5(a) and theBorrower has previously notified the Administrative Agent of its selection of,conversion to or renewal of a LIBOR Rate Option and such Interest Rate Optionhas not yet gone into effect, such notification shall be deemed to provide forselection of, conversion to or renewal of the Base Rate Option otherwise availablewith respect to such Loans.  If any Lender notifies the Administrative Agent ofa determination under Section 4.5(b), the Borrower shall, subject to theBorrower’s indemnification Obligations under Section 4.3, as to any Loanof the Lender to which a LIBOR Rate Option applies, on the date specified insuch notice either convert such Loan to the Base Rate Option otherwiseavailable with respect to such Loan or prepay such Loan in accordance with Section2.9.  Absent due notice from the Borrower of conversion or prepayment, suchLoan shall automatically be converted to the Base Rate Option otherwiseavailable with respect to such Loan upon such specified date.

# ARTICLEVCONDITIONSPRECEDENT

## 5.1             Initial Advance.

  The Lenders shall not be required to make the initialAdvance hereunder or accept their respective participation interests in theOriginal Facility Letters of Credit unless (i) the Borrower shall, prior to orconcurrently with such initial Advance, have paid all fees due and payable tothe Lenders and the Administrative Agent hereunder, and (ii) the Borrower shallhave furnished to the Administrative Agent, with sufficient copies for theLenders, the following:

### (a)               The duly executed originals of the Loan Documents, including theNotes, payable to the order of each of the Lenders, and this Agreement; 

### (b)              Certificates of good standing for each Loan Party from its stateof organization, certified by the appropriate governmental officer and datednot more than thirty (30) days prior to the Agreement Execution Date;

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

### (d)              Incumbency certificates, executed by officers of the Borrower,which shall identify by name and title and bear the signature of the Personsauthorized to sign the Loan Documents and to make borrowings hereunder onbehalf of such parties, upon which certificate the Administrative Agent and theLenders shall be entitled to rely until informed of any change in writing bythe Borrower;

### (e)               Copies, certified by a Secretary or an Assistant Secretary, ofthe Borrower’s resolutions (and resolutions of the other Loan Parties, if anyare reasonably deemed necessary by counsel for the Administrative Agent)authorizing the Advances provided for herein, with respect to the Borrower, andthe execution, delivery and performance of the Loan Documents to be executedand delivered by the Loan Parties;

### (f)               A written opinion of the Borrower’s counsel, addressed to theLenders in substantially the form of Exhibit E hereto or such other formas the Administrative Agent may reasonably approve;

### (g)              A closing certificate, signed by an Authorized Officer of theBorrower, stating that on the initial Borrowing Date no Event of Default orPotential Default has occurred and is continuing, there has been no MaterialAdverse Effect nor any current or pending litigation that may result in aMaterial Adverse Effect other than as previously disclosed in writing to theAdministrative Agent, and that all representations and warranties of theBorrower 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 financial statements of the Borrower;

### (i)                UCC financing statement, judgment, and tax lien searches withrespect to the Borrower from the state of its organization and the state inwhich its principal place of business is located;

### (j)                Written money transfer instructions, addressed to the AdministrativeAgent and signed by an Authorized Officer, together with such other relatedmoney transfer authorizations as the Administrative Agent may have reasonablyrequested;

### (k)              A pro forma Compliance Certificate in the form of Exhibit B,utilizing the modified covenants established herein and executed by the VicePresident and General Counsel, the Borrower’s chief financial officer or chiefexecutive officer;

### (l)                Completion of Administrative Agent’s due diligence review ofBorrower and Administrative Agent’s determination that (i) no Event of Defaultexists under the Original Agreement and (ii) no material adverse change inBorrower’s financial condition has occurred;

### (m)            Evidence that all reasonable costs related to the initialAdvance, including reasonable legal fees, have been or will be paid and thatall upfront fees due to each of the Lenders under the terms of their respectivecommitment letters have been paid or will be paid out of the proceeds of theinitial Advance hereunder; and

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### (n)              Completion of any other documentation the Administrative Agent orits counsel may have reasonably requested, the form and substance of whichdocuments shall be reasonably acceptable to the parties and their respectivecounsel.

## 5.2             Each Advance.  

The Lenders shall not be required to make any Advanceunless on the applicable Borrowing Date:

#### (i)                There exists no Event of Default or Potential Default;

#### (ii)              The representations and warranties contained in Article VIare true and correct in all material respects as of such Borrowing Date withrespect to the Loan Parties in existence on such Borrowing Date, except to theextent any such representation or warranty is stated to relate solely to anearlier date, in which case such representation or warranty shall be true andcorrect in all material respects on and as of such earlier date; and

#### (iii)            All legal matters incident to the making of such Advance shall besatisfactory to the Lenders and their counsel.

Each Loan Request with respectto each Advance shall constitute a representation and warranty by the Borrowerthat 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.

# ARTICLEVIREPRESENTATIONSAND WARRANTIES

TheBorrower represents and warrants to the Lenders that:

## 6.1             Existence

.  Borrower is a corporation duly organized andvalidly existing under the laws of the State of Ohio, with its principal placeof business in Richmond Heights, Ohio and is duly qualified as a foreigncorporation, properly licensed (if required), in good standing and has allrequisite authority to conduct its business in each jurisdiction in which itsbusiness is conducted, except where the failure to be so qualified, licensedand in good standing and to have the requisite authority would not have aMaterial Adverse Effect.  Each of Borrower’s Subsidiaries is duly incorporatedor otherwise organized, validly existing and in good standing under the laws ofits jurisdiction of organization and has all requisite authority to conduct itsbusiness in each jurisdiction in which its business is conducted, except wherethe failure to be so qualified, licensed and in good standing and to have therequisite authority would not have a Material Adverse Effect.

## 6.2             Authorization and Validity

.  Each Loan Party has the corporate, limitedpartnership, or limited liability company power and authority and legal rightto execute and deliver the Loan Documents and to perform its obligationsthereunder.  The execution and delivery by the Borrower of the Loan Documentsand the performance of its obligations thereunder have been duly authorized byproper proceedings, and the Loan Documents constitute legal, valid and bindingobligations of each Loan Party enforceable against each Loan Party inaccordance with their terms, except as enforceability may be limited bybankruptcy, insolvency or similar laws affecting the enforcement of creditors’rights generally.

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## 6.3             No Conflict; Government Consent

.  Neither the execution and delivery by the LoanParties of the Loan Documents, nor the consummation of the transactions thereincontemplated, nor compliance with the provisions thereof will violate any law,rule, regulation, order, writ, judgment, injunction, decree or award binding onthe Borrower, any of Borrower’s Subsidiaries, or either of their articles ofincorporation, operating agreements, partnership agreement, or by-laws, or theprovisions of any indenture, instrument or agreement to which the Borrower orany of Borrower’s Subsidiaries is a party or is subject, or by which it, or itsProperty, is bound, or conflict with or constitute a default thereunder, exceptwhere such violation, conflict or default would not have a Material AdverseEffect, or result in the creation or imposition of any Lien in, of or on theProperty of the Borrower or a Subsidiary pursuant to the terms of any suchindenture, instrument or agreement.  No order, consent, approval, license,authorization, or validation of, or filing, recording or registration with, orexemption by, any governmental or public body or authority, or any subdivisionthereof, is required to authorize, or is required in connection with theexecution, delivery and performance of, or the legality, validity, bindingeffect or enforceability of, any of the Loan Documents other than the filing ofa copy of this Agreement.

## 6.4             Financial Statements; Material Adverse Effect

.  All consolidated financial statements of the LoanParties heretofore or hereafter delivered to the Lenders were prepared in accordancewith GAAP in effect on the date of such statements and fairly present in allmaterial respects the consolidated financial condition and operations of theConsolidated Group at such date and the consolidated results of theiroperations for the period then ended, subject, in the case of interim financialstatements, to normal and customary year-end adjustments.  From the date of themost recent financial statements delivered to the Lenders through the AgreementExecution Date, there was no change in the business, properties, or condition(financial or otherwise) of the Borrower and its Subsidiaries which couldreasonably be expected to have a Material Adverse Effect.

## 6.5             Taxes

.  The Loan Parties have filed all United Statesfederal tax returns and all other tax returns which are required to be filedand have paid all taxes due pursuant to said returns or pursuant to anyassessment received by the Borrower or any of its Subsidiaries except suchtaxes, if any, as are being contested in good faith and as to which adequatereserves have been provided, and except any non‐compliance which does nothave a Material Adverse Effect.  No tax liens have been filed with respect tosuch taxes, except for ad valorem real estate tax contests in the ordinarycourse of Borrower’s business not having a Material Adverse Effect.  Thecharges, accruals and reserves on the books of the Borrower and itsSubsidiaries in respect of any taxes or other governmental charges areadequate.

## 6.6             Litigation and Guarantee Obligations

.  Except as set forth on Schedule 6.6 heretoor as set forth in written notice to the Administrative Agent from time totime, there is no litigation, arbitration, governmental investigation,proceeding or inquiry pending or, to the knowledge of any of their executive officers,threatened against or affecting the Loan Parties which could reasonably beexpected to have a Material Adverse Effect.  

## 6.7             Subsidiaries

.  Schedule 6.7 hereto contains, an accuratelist of all Subsidiaries of the Borrower, setting forth their respectivejurisdictions of incorporation or formation and the percentage of theirrespective capital stock or partnership or membership interest owned by theBorrower or other Subsidiaries.  All of the issued and outstanding shares ofcapital stock of such Subsidiaries that are corporations have been dulyauthorized and issued and are fully paid and non-assessable.

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## 6.8             ERISA

.  The Unfunded Liabilities of all Single EmployerPlans do not in the aggregate exceed $1,000,000.  Neither the Borrower nor anyother member of the ERISA Group has incurred, or is reasonably expected toincur, any withdrawal liability to Multiemployer Plans in excess of $250,000 inthe aggregate.  Each Plan complies in all material respects with all applicablerequirements of law and regulations, no Reportable Event has occurred withrespect to any Plan, neither the Borrower nor any other members of the ERISAGroup has withdrawn from any Plan or initiated steps to do so, and no stepshave been taken to reorganize or terminate any Plan.

            None of the assets of the Borrower or anySubsidiary constitute “plan assets” within the meaning of ERISA, the Code andthe respective regulations promulgated thereunder.  The execution, delivery andperformance of this Agreement and the other Loan Documents, and the borrowingand repayment of amounts hereunder, do not and will not constitute “prohibitedtransactions” under ERISA or the Code.

## 6.9             Accuracy of Information

.  To the best of Borrower’s knowledge, noinformation, exhibit or report furnished by the Loan Parties to theAdministrative Agent or to any Lender in connection with the negotiation of, orcompliance with, the Loan Documents contained any material misstatement of factor omitted to state a material fact or any fact necessary to make thestatements contained therein not misleading.

## 6.10         Regulation U

.  The Borrower has not used the proceeds of anyAdvance to buy or carry any margin stock (as defined in Regulation U) inviolation of the terms of this Agreement.

## 6.11         Material Agreements

.  Neither the Borrower nor any Subsidiary is indefault in the performance, observance or fulfillment of any of theobligations, covenants or conditions contained in (i) any agreement to which itis a party, which default could have a Material Adverse Effect or (ii) anyagreement or instrument evidencing or governing Indebtedness, which defaultwould constitute an Event of Default hereunder.

## 6.12         Compliance With Laws

.  Except as set forth in Schedule 6.6,Borrower is in compliance in all material aspects with all applicable statutes,rules, regulations, orders and restrictions of any domestic or foreigngovernment or any instrumentality or agency thereof, having jurisdiction overthe conduct of their respective businesses or the ownership of their respectiveProperty, except for any non-compliance which would not have a Material AdverseEffect.  The Loan Parties have not received any uncured written notice to theeffect that its operations are not in material compliance with any of therequirements of applicable federal, state and local environmental, health andsafety statutes and regulations or the subject of any federal or stateinvestigation evaluating whether any remedial action is needed to respond to arelease of any toxic or hazardous waste or substance into the environment,which non-compliance or remedial action could have a Material Adverse Effect.

## 6.13         Ownership of Projects

.  Except as set forth on Schedule 6.13hereto, on the date of this Agreement, the Borrower or its Subsidiaries will,respectively, have good and marketable title, free of all Liens other thanPermitted Liens, respectively, to all of the Projects reflected in thefinancial statements as owned by it.

## 6.14         Investment Company Act

.  Neither the Borrower nor 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.

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## 6.15         Solvency

.

### (a)               Immediately after the Agreement Execution Date and immediatelyfollowing the making of each Loan and after giving effect to the application ofthe proceeds of such Loans, (a) the fair value of the assets of theBorrower and its Subsidiaries on a consolidated basis, at a fair valuation,will exceed the debts and liabilities, subordinated, contingent or otherwise,of the Borrower and its Subsidiaries on a consolidated basis; (b) the presentfair saleable value of the Property of the Borrower and its Subsidiaries on aconsolidated basis will be greater than the amount that will be required to paythe probable liability of the Borrower and its Subsidiaries on a consolidatedbasis on their debts and other liabilities, subordinated, contingent orotherwise, as such debts and other liabilities become absolute and matured; (c)the Borrower and its Subsidiaries on a consolidated basis will be able to paytheir debts and liabilities, subordinated, contingent or otherwise, as suchdebts and liabilities become absolute and matured; and (d) the Borrower and itsSubsidiaries on a consolidated basis will not have unreasonably small capitalwith which to conduct the businesses in which they are engaged as suchbusinesses are now conducted and are proposed to be conducted after the datehereof.

### (b)              The Borrower does not intend to, or to permit any of itsSubsidiaries to, and does not believe that it or any of its Subsidiaries will,incur debts beyond its ability to pay such debts as they mature, taking intoaccount the timing of and amounts of cash to be received by it or any suchSubsidiary and the timing of the amounts of cash to be payable on or in respectof its Indebtedness or the Indebtedness of any such Subsidiary.

## 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 and Listing 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.Borrower’s Capital Stock is and shall be at all times prior to the FacilityTermination Date listed on at least one of the New York Stock Exchange, NASDAQor the American Stock Exchange.

## 6.18         Title to Property

.  The execution, delivery or performance of the LoanDocuments required to be delivered by the Borrower hereunder will not result inthe creation of any Lien on the Projects of the Consolidated Group.  No consentto the transactions contemplated hereunder is required from any ground lessoror mortgagee or beneficiary under a deed of trust or any other party except ashas been delivered to the Lenders.

## 6.19         Environmental Matters

.  Each of the following representations andwarranties is true and correct on and as of the Agreement Execution Date exceptas disclosed on Schedule 6.19 attached hereto and to the extent that thefacts and circumstances giving rise to any such failure to be so true andcorrect, in the aggregate, would not reasonably be expected to have a MaterialAdverse Effect:

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

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### (b)              Neither the Borrower nor any of its Subsidiaries has received anyuncured, written notice of violation, alleged violation, non-compliance,liability or potential liability regarding environmental matters or compliancewith Environmental Laws from any Governmental Authority with regard to any ofthe Projects, nor does the Borrower have knowledge or reason to believe thatany such written notice is being threatened.

### (c)               To the best knowledge of the Borrower, Materials of EnvironmentalConcern are not transported or disposed of from the Projects of the Borrowerand its Subsidiaries in violation of, or in a manner or to a location whichcould reasonably give rise to liability of the Borrower or any Subsidiaryunder, Environmental Laws, nor are any Materials of Environmental Concern beinggenerated, treated, stored or disposed of at, on or under any of the Projectsof the Borrower and its Subsidiaries in violation of, or in a manner that couldgive rise to liability of the Borrower or any Subsidiary under, any applicableEnvironmental Laws.

### (d)              No judicial proceedings or governmental or administrative actionis pending, or, to the knowledge of the Borrower, threatened, under anyEnvironmental Law to which the Borrower or any of its Subsidiaries is or, tothe Borrower’s knowledge, will be named as a party with respect to the Projectsof the Borrower and its Subsidiaries, nor are there any consent decrees orother decrees, consent orders, administrative order or other orders, or otheradministrative of judicial requirements outstanding under any Environmental Lawwith respect to the Projects of the Borrower and its Subsidiaries.

### (e)               To the best knowledge of the Borrower,there has been no release or threat of release of Materials of EnvironmentalConcern at or from the Projects of the Borrower and its Subsidiaries, orarising from or related to the operations of the Borrower and its Subsidiariesin connection with the Projects in violation of or in amounts or in a mannerthat could give rise to liability under Environmental Laws.

## 6.20         Officeof 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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.           Borrower shall cause each SubsidiaryGuarantor listed on Schedule 3.1, as amended from time to time, toexecute and deliver to the Administrative Agent the Subsidiary Guaranty. Borrower shall cause each Subsidiary which hereafter owns a QualifyingUnencumbered Project to execute and deliver to the Administrative Agent ajoinder in the Subsidiary Guaranty in the form of Exhibit A attached tothe form of Subsidiary Guaranty.  Borrower covenants and agrees that eachSubsidiary which it shall cause to execute the Subsidiary Guaranty shall befully authorized to do so by its supporting organizational and authoritydocuments and shall be in good standing in its state of organization and shallhave obtained any necessary foreign qualifications required to conduct itsbusiness.  

## 6.22         Intellectual Property

.  To the best knowledge of Borrower, Borrower andeach Subsidiary of Borrower owns or has the right to use, under valid licenseagreements or otherwise, all material patents, licenses, franchises,trademarks, trademark rights, trade names, trade name rights, trade secrets andcopyrights (collectively, “Intellectual Property”) necessary to the conduct ofits businesses as now conducted and as contemplated by the Loan Documents,without known conflict as of the Agreement Date with any patent, license,franchise, trademark, trade secret, trade name, copyright, or other proprietaryright of any other Person.  To the best knowledge of Borrower, Borrower andeach other Subsidiary have taken all such steps as they deem reasonablynecessary to protect their respective rights under and with respect to suchIntellectual 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 maintain a system of accountingestablished and administered in accordance with GAAP, and will furnish to theAdministrative Agent and the Lenders:

### (a)               As soon as available, but in any event not later than 45 daysafter the close of each fiscal quarter, other than the fourth quarter, anunaudited consolidated balance sheet as of the close of each such fiscalquarter and the related unaudited consolidated statements of income, retained earnings,and cash flows for each such quarter and for such quarter and the precedingquarters of the current fiscal year, on an aggregate basis, setting forth ineach case in comparative form the figures for the corresponding period duringthe previous fiscal year, all certified by the Borrower’s chief financialofficer or chief accounting officer as being true and correct in all materialrespects to such officer’s knowledge;

### (b)              As soon as available, but in any event not later than 90 daysafter the close of each fiscal year, audited financial statements, including aconsolidated balance sheet as at the end of such year and the relatedconsolidated statements of income and retained earnings and of cash flows forsuch year, setting forth in each case in comparative form the figures for theprevious year, without a “going concern” or like qualification or exception,prepared by independent certified public accountants of nationally recognizedstanding reasonably acceptable to the Administrative Agent and Lenders (PriceWaterhouseCoopers and the other big four firms are pre-approved), plus annual cash flowprojections of the Borrower and annual budgets and forecasts for theConsolidated Group;

### (c)               Together with the quarterly and annual financial statementsrequired hereunder, a compliance certificate, in substantially the form of ExhibitB attached hereto (a “Compliance Certificate”) signed by theBorrower’s chief financial officer or chief executive officer showing thecalculations and computations necessary to determine compliance with thisAgreement and stating that, to such officer’s knowledge, no Event of Default orPotential Default exists, or if, to such officer’s knowledge, any Event ofDefault or Potential Default exists, stating the nature and status thereof;

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### (d)              As soon as available, but in any event not later than 30 daysafter the close of each fiscal year, a schedule of all filings to be made bythe Borrower with the Securities and Exchange Commission for the upcomingfiscal year, including without limitation all 10-Ks and 10-Qs;

### (e)               As soon as possible and in any event within 10 days after aresponsible officer of the Borrower knows that any Reportable Event hasoccurred with respect to any Plan, a statement, signed by the chief financialofficer of the Borrower, describing said Reportable Event and the action whichthe Borrower proposes to take with respect thereto;

### (f)               As soon as possible and in any event within 10 days after receiptby an executive officer of the Borrower, a copy of (i) any notice or claim fromany Governmental Authority to the effect that the Borrower or any of itsSubsidiaries is or may be liable to any Person as a result of the release bythe Borrower, any of its Subsidiaries, or any other Person of any Material ofEnvironmental Concern into the environment, (ii) any notice of litigation oralleging any violation of any federal, state or local environmental, health orsafety law or regulation by the Borrower or any of its Subsidiaries, whichwould have a Material Adverse Effect, (iii) any notice of any Lien on anyQualifying Unencumbered Project (other than Permitted Liens) or any Lien on anyother Project (other than Permitted Liens) that would reasonably be expected tohave a Material Adverse Effect, (iv) any notice of default on RecourseIndebtedness and or on any Non-Recourse Indebtedness that exceeds $25,000,000,(v) any notice of default on interest rate hedge agreements, and (vi) any otherdefault under any obligations of any Loan Party would reasonably be expected tohave a Material Adverse Effect;

### (g)              Prior to the incurrence of any Defeasance Costs in connectionwith the defeasance or prepayment of Indebtedness in excess of $5,000,000, awritten notice (to be delivered to the Administrative Agent only) identifyingsuch Indebtedness and the expected date of defeasance or prepayment andcontaining an estimate of the types and amounts of Defeasance Costs reasonablyanticipated to be incurred in connection with such defeasance or prepayment;

### (h)              Promptly upon the furnishing thereof to the shareholders of the Borrower,copies of all financial statements, reports and proxy statements so furnished;and

### (i)                Except for non-public material information and information thatis privileged pursuant to the attorney-client and/or work product privileges,such other information (including, without limitation, financial andnon-financial information and a listing of capital expenditures, a rent roll,and such other information on any Project) as the Administrative Agent or anyLender may from time to time reasonably request.

## 7.2             Use of Proceeds

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.  The Borrower shall use the proceeds of theAdvances for its general corporate purposes, including but not limited to debtfinancing and refinancing (including defeasance or prepayment of Indebtedness),property acquisitions, new construction, renovations, expansions, tenantimprovement costs, working capital for Borrower and its Subsidiaries, stockrepurchases, dividend payments and equity investments primarily associated withincome-producing, institutional–grade multifamily properties. The Borrower willnot, nor will it permit any Subsidiary to, use any of the proceeds of theAdvances (i) to purchase or carry any “margin stock” (as defined in RegulationU) if such 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 will give, and will cause each of itsSubsidiaries to give, prompt notice in writing to the Administrative Agent andthe Lenders of the occurrence of any Event of Default or Potential Default.

## 7.4             Conduct of Business

.  The Borrower will do, and will cause each of itsSubsidiaries (other than those whose businesses have been discontinued) to doall things necessary to remain duly incorporated or duly qualified, validlyexisting and in good standing as a real estate investment trust, corporation,limited liability company general partnership or limited partnership, as thecase may be, in its jurisdiction of incorporation/formation (except withrespect to permitted mergers and Permitted Acquisitions) and maintain allrequisite authority to conduct its business in each jurisdiction in which itsbusiness is conducted and to carry on and conduct their businesses insubstantially the same manner as they are presently conducted where the failureto do so could reasonably be expected to have a Material Adverse Effect and,specifically, Borrower shall carry on all of its business operations andinvestments through the Borrower and its Wholly-Owned Subsidiaries, except asprovided in Section 7.15 and subject to the limitations set forth in Section7.22(d). The activities of  the Borrower and its Subsidiaries shall belimited primarily to (i) the acquisition, development, ownership, management,operation and leasing of income-producing, institutional-grade, multifamilyresidential properties, and (ii) construction, development and other relatedactivities conducted by Borrower’s Wholly-Owned Subsidiary, Merit Enterprises,Inc.

## 7.5             Taxes

.  The Borrower will pay, and will cause each of itsSubsidiaries to pay, when due all taxes, assessments and governmental chargesand levies upon them of their income, profits or Properties, except those whichare being contested in good faith by appropriate proceedings and with respectto which adequate reserves have been set aside, if and to the extent deemedreasonably necessary by Borrower.

## 7.6             Insurance

.  The Borrower will, and will cause each of itsSubsidiaries to, maintain insurance which is consistent with the representationcontained in Section 6.16 on all their Properties and the Borrowerwill furnish to any Lender upon reasonable request full information as to theinsurance carried.

## 7.7             Compliance with Laws

.  The Borrower will, and will cause each of itsSubsidiaries to, comply with all laws, rules, regulations, orders, writs,judgments, injunctions, decrees or awards to which they may be subject, theviolation of which could reasonably be expected to have a Material AdverseEffect, if and to the extent deemed reasonably necessary by Borrower.

## 7.8             Maintenance of Properties and Equipment

.  The Borrower will, and will cause each of itsSubsidiaries to, do all things necessary to maintain, preserve, protect andkeep their respective Properties and equipment in good repair, working orderand condition, ordinary wear and tear excepted.

## 7.9             Inspection

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.  The Borrower will, and will cause each of itsSubsidiaries to, permit the Lenders upon reasonable notice and during normalbusiness hours and subject to rights of tenants, by their respectiverepresentatives and agents, to inspect any of the Projects, corporate books andfinancial records of the Borrower and each of its Subsidiaries, to examine andmake copies of the books of accounts and other financial records of theBorrower and each of its Subsidiaries, and to discuss the affairs, finances andaccounts of the Borrower and each of its Subsidiaries with executive officersthereof, and to be advised as to the same by, except for non-public materialinformation and information that is privileged pursuant to the attorney-clientand/or work product privileges, their respective officers at such reasonabletimes and intervals as the Lenders may designate.

## 7.10         Maintenance of Status

.  The Borrower shall at all times  maintain itsstatus as a real estate investment trust in compliance with all applicableprovisions of the Code relating to such status.

## 7.11         Dividends

.  The Borrower and its Subsidiaries shall bepermitted to declare and pay dividends on their Capital Stock from time totime, provided, however, that in no event shall the Borrowerdeclare or pay dividends on its Capital Stock (other than Preferred Dividends)or make distributions with respect thereto (other than Preferred Dividends), ifsuch dividends and distributions paid with respect to the most recent four (4)consecutive full fiscal quarters for which financial results are available, inthe aggregate for such period, would exceed 95% of Adjusted Funds FromOperations of the Borrower for such period.  Notwithstanding the foregoing, theBorrower shall be permitted at all times to distribute whatever amount ofdividends is necessary to maintain its tax status as a real estate investmenttrust.

## 7.12         No Change in Control

.  The Borrower will not consent to a Change inControl.

## 7.13         Non-Real Estate Investments

.  Borrower shall not make any acquisition ofnon-real estate related assets or service companies without the AdministrativeAgent’s approval.  Purchases of computers, automobiles, furniture, officeequipment and similar fixed assets used in the normal course of business arepermitted.

## 7.14         Merger; Sale of Assets

.  The Borrower shall not, nor will it permit any ofits Subsidiaries to, without prior written approval of the Administrative Agentand without providing a pro forma Compliance Certificate showing the effects ofsuch transaction, enter into any merger (other than mergers in which such entityis the survivor and mergers of Subsidiaries as part of transactions that arePermitted Acquisitions, provided that following such merger the target entitybecomes a Wholly-Owned Subsidiary of Borrower), consolidation, reorganizationor liquidation, except for such transactions that occur between Wholly-OwnedSubsidiaries. Neither Borrower nor any other member of the Consolidated Group,without the prior written approval of the Administrative Agent, will either (i)acquire in a single transaction real estate assets which have a value in excessof 20% of the then-current Total Asset Value or (ii) dispose of in a singletransaction real estate assets which comprise 10% or more of the then-currentTotal Asset Value.  

## 7.15         Acquisitions and Investments

.  The Borrower will not, nor will it permit anySubsidiary to, make or suffer to exist any Investments (including withoutlimitation, loans and advances to, and other Investments in, Subsidiaries), orcommitments therefor, or become a partner in any partnership or joint venture,or to make any Acquisition of any Person, except:

### (a)               Cash and Cash Equivalents;

### (b)              Investments in Projects, Real Property Under Development,Undeveloped Land and First Mortgage Receivables, subject to the limitsestablished in Section 7.22;

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### (c)               Investments in existing Subsidiaries, Investments in Subsidiariesformed for the purpose of developing or acquiring Projects, and Investments injoint ventures and partnerships engaged solely in the business of purchasing,developing, owning, operating, leasing and managing Projects;

### (d)              transactions permitted pursuant to Section 7.23; 

### (e)               Acquisitions of Persons whose primary operations consist of theownership, development, operation and management of multifamily residentialproperties; and

### (f)               Interest Rate Hedges related to hedging interest rates withrespect to the Consolidated Outstanding Indebtedness or the Indebtedness ofInvestment Affiliates.

provided that, after givingeffect to such Acquisitions and Investments, Borrower continues to comply withall its covenants herein.  Acquisitions permitted pursuant to this Section7.15 shall be deemed to be “Permitted Acquisitions”.

## 7.16         Liens

.  The Borrower will not, nor will it permit any ofits Subsidiaries to, create, incur, or suffer to exist any Lien in, of or onthe Property of the Borrower or any of its Subsidiaries, except:

### (a)               Liens for taxes, assessments or governmental charges or levies onits Property if the same shall not at the time be delinquent or thereafter canbe paid without penalty, or are being contested in good faith and byappropriate proceedings and for which adequate reserves shall have been setaside on its books, if and to the extent deemed reasonably necessary byBorrower;

### (b)              Liens imposed by law, such as carriers’, warehousemen’s andmechanics’ liens and other similar liens arising in the ordinary course ofbusiness which secure payment of obligations which are being or will timely becontested in good faith by appropriate proceedings and for which adequatereserves shall have been set aside on its books, if and to the extent deemedreasonably necessary by Borrower;

### (c)               Liens arising out of pledges or deposits under workers’compensation laws, unemployment insurance, old age pensions, or other socialsecurity or retirement benefits, or similar legislation;

### (d)              Easements, restrictions and such other encumbrances or chargesagainst real property as are of a nature generally existing with respect toproperties of a similar character and which do not materially and adverselyinterfere with the use thereof in the business of the Borrower or itsSubsidiaries;

### (e)               Liens on Projects to secure any Indebtedness to the extent suchLiens will not result in an Event of Default in any of Borrower’s covenantsherein.

Liens permitted pursuant tothis Section 7.16 shall be deemed to be “Permitted Liens”.

## 7.17         Affiliates

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.  The Borrower will not, nor will it permit any ofits Subsidiaries to, enter into any transaction (including, without limitation,the purchase or sale of any Property or service) with, or make any payment ortransfer to, any Affiliate which is not a member of the Consolidated Groupexcept in the ordinary course of business and pursuant to the reasonablerequirements of the Borrower’s or such Subsidiary’s business and upon fair andreasonable terms no less favorable to the Borrower or such Subsidiary than theBorrower or such Subsidiary would obtain in a comparable arms-lengthtransaction.

## 7.18         Recourse Secured Indebtedness

.  Borrower will not allow, or permit any member ofthe Consolidated Group to allow, the aggregate outstanding principal amount ofSecured Indebtedness of the Consolidated Group which is also RecourseIndebtedness to exceed ten percent (10%) of the then-current Total Asset Valueat any time.  The amount of the Consolidated Group’s Secured Indebtedness whichis Non-Recourse Indebtedness shall be limited only by Section 7.20(a)and Section 7.20(b).

## 7.19         Minimum Consolidated Tangible Net Worth

.  Borrower shall not permit Consolidated TangibleNet Worth to be less than $500,000,000 plus eighty-five percent (85%) ofthe Net Proceeds of any Equity Issuance received after the Agreement ExecutionDate.

## 7.20         Indebtedness and Cash Flow Covenants

.  The Borrower shall not permit:

### (a)               The ratio of Consolidated Outstanding Indebtedness to Total AssetValue to be greater than 0.60:1 as of the end of any fiscal quarter;

### (b)              The ratio of Consolidated Adjusted EBITDA to Consolidated FixedCharges to be less than 1.50:1 as of the end of any fiscal quarter ending onDecember 31, 2010 or at any time thereafter; 

### (c)               The ratio of Consolidated Unsecured Indebtedness to UnencumberedReal Property Value to be greater than 0.60:1 as of the end of any fiscalquarter; 

### (d)              The ratio of Unencumbered Real Property Adjusted NOI toConsolidated Interest Expense on Consolidated Unsecured Indebtedness as of theend of any fiscal quarter to be less than 2.00:1; and

### (e)               The percentage of the total residential units in the QualifyingUnencumbered Projects that are physically occupied by tenants under third partyoccupancy leases to be less than 85% as of any date, provided however that, ifand to the extent that the total percentage of residential units in theQualifying Unencumbered Projects that are physically occupied by tenants underthird party occupancy leases falls below the 85% threshold at any time,Borrower shall, within thirty (30) days from such date, either (i) add anEligible Unencumbered Project (in accordance with Section 3.1 of theCredit Agreement), (ii)  replace a Qualifying Unencumbered Project, or (iii)remove a Qualifying Unencumbered Project (in accordance with Section 3.3of the Credit Agreement) in order to comply with such 85% minimum threshold.

## 7.21         Environmental Matters

.  Borrower and its Subsidiaries shall:

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### (a)               Comply with, and use all reasonable efforts to ensure complianceby all tenants and subtenants, if any, with, all applicable Environmental Lawsand obtain and comply with and maintain, any and all licenses, approvals,notifications, registrations or permits required by applicable EnvironmentalLaws, except to the extent that failure to do so could not be reasonably expectedto have a Material Adverse Effect; provided that in no event shall the Borroweror its Subsidiaries be required to modify the terms of leases, or renewalsthereof, with existing tenants (i) at Projects owned by the Borrower or itsSubsidiaries as of the date hereof, or (ii) at Projects hereafter acquired bythe Borrower or its Subsidiaries as of the date of such acquisition, to addprovisions to such effect.

## 7.22         Conduct and complete all investigations, studies, sampling andtesting, and all remedial, removal and other actions required underEnvironmental Laws and promptly comply in all material respects with all lawfulorders and directives of all Governmental Authorities regarding EnvironmentalLaws, except to the extent that (i) the same are being contested in good faithby appropriate proceedings and the pendency of such proceedings could not bereasonably expected to have a Material Adverse Effect, or (ii) theBorrower has determined in good faith that contesting the same is not in thebest interests of the Borrower and its Subsidiaries and the failure to contestthe same could not be reasonably expected to have a Material Adverse Effect.

### (a)               Defend, indemnify and hold harmless Administrative Agent and eachLender, and their respective officers and directors, from and against anyclaims, demands, penalties, fines, liabilities, settlements, damages, costs andexpenses of whatever kind or nature known or unknown, contingent or otherwise,arising out of, or in any way relating to the violation of, noncompliance withor liability under any Environmental Laws applicable to the operations of theBorrower, its Subsidiaries or the Projects, or any orders, requirements ordemands of Governmental Authorities related thereto, including, withoutlimitation, attorney’s and consultant’s fees, investigation and laboratoryfees, response costs, court costs and litigation expenses, except to the extentthat any of the foregoing arise out of the gross negligence or willfulmisconduct of the party seeking indemnification therefor.  This indemnity shallcontinue in full force and effect regardless of the termination of thisAgreement.  

### (b)              Defend each such indemnified party bycounsel selected by Borrower, subject to the reasonable approval of theindemnified party, promptly after notice of any claims made against anindemnified party hereunder.

## 7.23         Permitted Investments

.

### (a)               The Borrower’s Investment in Real Property Under Development(with each asset valued in accordance with GAAP at cost, as incurred throughthe reporting date for construction in progress in the most recent quarter ofthe Consolidated Group for which financial results have been reported) shallnot at any time exceed ten percent (10%) of Total Asset Value.

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

### (c)               The Borrower’s Investment in First Mortgage Receivables (witheach asset valued at the lower of its acquisition cost and its fair marketvalue) shall not at any time exceed five percent (5%) of Total Asset Value.

### (d)              The Borrower’s aggregate investment shall not exceed $25,000,000,in the aggregate, in other directly owned assets that are not eitherincome-producing, institutional-grade multifamily properties or one of theInvestments described in the above items (a)-(c).

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### (e)               The Borrower’s aggregate Investment in Investment Affiliates(valued at the greater of the cash investment in that entity by the Borrower orthe portion of Total Asset Value attributable to such entity or its assets asthe case may be)****shall not at any time exceed ten percent (10%) of TotalAsset Value.

### (f)               The aggregate Investment of the Borrower in the above items(a)-(d), in the aggregate and after eliminating any duplication of Investmentsincluded in more than one of such items, shall not at any time exceed twentypercent (20%) of Total Asset Value.

## 7.24         Additional Unsecured Indebtedness

.  Neither Borrower nor any other member of theConsolidated Group shall incur any Indebtedness of a revolving nature otherthan this Facility.  Neither Borrower nor any other member of the ConsolidatedGroup shall incur any other non-revolving unsecured Indebtedness other thanIndebtedness which does not cause any violation of the provisions of Section 7.20(c)or Section 7.20(d).  Future trust preferred issuances will be permittedonly to the extent they are expressly subordinate to this Facility. 

## 7.25         Limits on Ownership Encumbrances

. The Borrower will not allow, or permit any memberof the Consolidated Group to allow, its direct or indirect ownership interestsin any other member of the Consolidated Group or any Investment Affiliate to beencumbered to secure any Indebtedness, other than “mezzanine” Indebtedness of amember of the Consolidated Group provided that such “mezzanine” Indebtedness iseither (A) Non-Recourse Indebtedness incurred for the purpose of financing theconstruction and development of  a new Project  not to exceed $10,000,000, whenaggregated with all other construction and development “mezzanine” Indebtednessthen outstanding or committed, so long as such Indebtedness is notcross-collateralized or cross-defaulted with other Indebtedness of any memberof the Consolidated Group or (B) created in connection with Indebtedness of adirect or indirect Wholly-Owned Subsidiary of such member secured by a mortgageor deed of trust on such Wholly-Owned Subsidiary’s real Property and initiallyheld by the lender under such secured Indebtedness or an Affiliate thereof. 

# ARTICLE VIIIeventsof DEFAULT

 

Theoccurrence of any one or more of the following events shall constitute an Eventof Default:

8.1       Nonpaymentof any principal payment due hereunder or under any Note when due.

8.2       Nonpayment of interestupon any Note or of any fee or other payment Obligations under any of the LoanDocuments within five (5) Business Days after written notice fromAdministrative Agent that the same has become due.

8.3       The breach of any ofthe terms or provisions 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 deemedmade by or on behalf of the Borrower or any of its Subsidiaries to the Lendersor the Administrative Agent under or in connection with this Agreement, or anymaterial certificate or information delivered in connection with this Agreementor any other Loan Document shall be materially false on the date as of whichmade, unless such matter is corrected within thirty (30) days after writtennotice of such material falsity.

8.5       The breach by the Borrower (other than abreach which constitutes an Event of Default under Section 8.1, 8.2,8.3 or 8.4) of any of the terms or provisions of this Agreementwhich is not remedied within thirty (30) days after written notice to Borrowerfrom the Administrative Agent or any Lender.

8.6       The default by the Borrower or any othermember of the Consolidated Group or any Investment Affiliate in the payment ofany amount due under, or the performance of any term, provision or conditioncontained in, any agreement with respect to (A) any Recourse Indebtedness ofthe Borrower or any other member of the Consolidated Group, or (B) anyNon-Recourse Indebtedness of the Borrower or any other member of theConsolidated Group or any Investment Affiliate having an outstanding principalbalance in excess of $25,000,000 in the aggregate (collectively, “MaterialIndebtedness”) or any other event shall occur or condition exist, which causesor permits any such Material Indebtedness to be due and payable or required tobe prepaid (other than by a regularly scheduled payment) prior to the statedmaturity thereof. 

8.7       Borrower or any member of the Borrower shallvoluntarily (i) have an order for relief entered with respect to it under theFederal bankruptcy laws as now or hereafter in effect, (ii) make an assignmentfor the benefit of creditors, (iii) apply for, seek, consent to, or acquiescein, the appointment of a receiver, custodian, trustee, examiner, liquidator orsimilar official for it or any Substantial Portion of its Property, (iv)institute any proceeding seeking an order for relief under the Federal bankruptcylaws as now or hereafter in effect or seeking to adjudicate it as a bankrupt orinsolvent, or seeking dissolution, winding up, liquidation, reorganization,arrangement, adjustment or composition of it or its debts under any lawrelating to bankruptcy, insolvency or reorganization or relief of debtors orfail to file an answer or other pleading denying the material allegations ofany such proceeding filed against it, (v) take any corporate action toauthorize or effect any of the foregoing actions set forth in this Section8.7, (vi) fail to contest in good faith any appointment or proceedingdescribed in Section 8.8 or (vii) admit in writing itsinability to pay its debts generally as they become due.

8.8       A receiver, trustee, examiner, liquidator orsimilar official shall be appointed for any member of the Consolidated Group orfor any Substantial Portion of the Property of any member of the ConsolidatedGroup (other than a receiver in connection with the foreclosure of any SecuredIndebtedness having an outstanding principal balance of $25,000,000 or less) ora proceeding described in Section 8.7(iv) shall be instituted againstany member of the Consolidated Group and such appointment continuesundischarged or such proceeding continues undismissed or unstayed for a periodof ninety (90) consecutive days.

8.9       Any member of the Consolidated Group shallfail within sixty (60) days to pay, bond or otherwise discharge any judgmentsor orders for the payment of money in an amount which, when added to all otherjudgments or orders outstanding against Borrower, would exceed $10,000,000 inthe aggregate in excess of any insurance proceeds available to pay suchjudgments or orders, which have not been stayed on appeal or otherwiseappropriately contested in good faith.

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8.10     Failure to remediate within the time periodpermitted by law or governmental order, after all administrative hearings andappeals have been concluded (or within a reasonable time in light of the natureof the problem if no specific time period is so established), materialenvironmental problems at Properties owned by the Borrower or any of itsSubsidiaries or Investment Affiliates if the reasonably estimated costs ofremediation are in excess of $10,000,000 in the aggregate.

8.11     The occurrence of any “Event of Default” asdefined in any Loan Document or the breach of any of the terms, covenants, orprovisions of any Loan Document, which default or breach continues beyond anyperiod of grace therein provided.

8.12     TheBorrower, without obtaining consent of the Required Lenders, shall enter intoany merger, consolidation, reorganization or liquidation or transfer orotherwise dispose of all or substantially all of their Properties, unless (a)in the case of a merger or consolidation the Borrower is the surviving entityin such merger or consolidation and (b) after giving effect to the merger, theBorrower remains in compliance with the terms of the Credit Agreement, providedthat any such action shall not constitute an Event of Default unless the Borrowershall fail to reverse such action within sixty (60) days after written noticefrom the Administrative Agent that such action constitutes an Event of Defaulthereunder.

# ARTICLEIXACCELERATION,WAIVERS, AMENDMENTS AND REMEDIES

## 9.1             Acceleration

.  If any Event of Default described in Section8.7 or 8.8 occurs with respect to the Borrower, the obligations ofthe Lenders to make Loans and hereunder shall automatically terminate and theObligations shall immediately become due and payable without any election oraction on the part of the Administrative Agent or any Lender.  If any otherEvent of Default occurs, so long as an Event of Default exists Lenders shallhave no obligation to make any Loans and the Required Lenders, at any timeprior to the date that such Event of 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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Upon the forty-fifth (45th) day prior to theFacility Termination Date so long as any Facility Letter of Credit has not beenfully drawn and has not been cancelled or expired by its terms, the Borrowershall deposit in the Letter of Credit Collateral Account cash in an amountequal to the aggregate undrawn face amount of all outstanding Facility Letters ofCredit and all fees and other amounts due or which may become due with respectthereto. In addition to the foregoing, following the occurrence of an Event ofDefault and so long as any Facility Letter of Credit has not been fully drawnand has not been cancelled or expired by its terms, upon demand by theAdministrative Agent the Borrower shall deposit in the Letter of CreditCollateral Account cash in an amount equal to the aggregate undrawn face amountof all outstanding Facility Letters of Credit and all fees and other amountsdue or which may become due with respect thereto.  The Borrower shall have nocontrol over funds in the Letter of Credit Collateral Account and shall not beentitled to receive any interest thereon.  Such funds shall be promptly appliedby the Administrative Agent to reimburse the Issuing Lender for drafts drawnfrom time to time under the Facility Letters of Credit and associated issuancecosts and fees.  Such funds, if any, remaining in the Letter of CreditCollateral Account following the payment of all Obligations in full shall,unless the Administrative Agent is otherwise directed by a court of competentjurisdiction, be promptly paid over to the Borrower.

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 Event ofDefault (other than any Event of Default as described in Section 8.7 or 8.8with respect to the Borrower) and before any judgment or decree for the paymentof the Obligations due shall have been obtained or entered, all of the Lenders(in their 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 the provisions of this Article IXthe Required Lenders (or the Administrative Agent with the consent in writingof the Required Lenders) and the Borrower may enter into agreementssupplemental hereto for the purpose of adding or modifying any provisions tothe Loan Documents or changing in any manner the rights of the Lenders or theBorrower hereunder or waiving any Event of Default hereunder; provided,however, that no such supplemental agreement or waiver shall, without theconsent of all Lenders:

### (a)               Extend the Facility Termination Date (except as provided in Section2.22), or forgive all or any portion of the principal amount of any Loan oraccrued interest thereon or the Commitment Fee, reduce the Applicable Margins(or modify any definition herein which would have the effect of reducing theApplicable Margins) or the interest rate or underlying interest rate options orextend the time of payment of any such principal, interest or facility fees.

### (b)              Modify Section 7.20(c) or Section 7.20(d) ordiminish any of the requirements for a Project to qualify as a QualifyingUnencumbered Project (or modify any other definitions herein which would havethe effect of diminishing such requirements).

### (c)               Change the definition of Required Lenders.

### (d)              Increase the Aggregate Commitment, except as provided for in Section2.18.

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

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

### (g)              Waive a monetary Event of Default.

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No amendment of anyprovision of this Agreement relating to the Administrative Agent shall beeffective without the written consent of the Administrative Agent.  Ifin connection with any proposed waiver, amendment or modification referred toin Sections 9.2(a) through 9.2(f) above, the consent of theRequired Lenders is obtained but the consent of one or more of such otherLenders whose consent is required is not obtained (each a “**Non-ConsentingLender**”), then the Borrower shall have the right to replace any suchNon-Consenting Lender with one or more replacement Lenders pursuant to Section2.20. Notwithstanding anything to the contrary in this Section 9.2,no such supplemental agreement or waiver shall modify Section 7.12 orthe definition of Change in Control or delete or modify the reference to Section7.12 which is contained in Section 8.3 without the consent ofLenders in the aggregate having at least 75% of the Aggregate Commitment, or ifthe Aggregate Commitment has been terminated, Lenders in the aggregate holdingat least 75% of the aggregate unpaid principal amount of the outstandingAdvances.

## 9.3             Preservation of Rights

.  No delay or omission of the Lenders or theAdministrative Agent to exercise any right under the Loan Documents shallimpair such right or be construed to be a waiver of any Event of Default or anacquiescence therein, and the making of a Loan notwithstanding the existence ofan Event of Default or the inability of the Borrower to satisfy the conditionsprecedent to such Loan shall not constitute any waiver or acquiescence.  Anysingle or partial exercise of any such right shall not preclude other orfurther exercise thereof or the exercise of any other right, and no waiver,amendment or other variation of the terms, conditions or provisions of the LoanDocuments whatsoever shall be valid unless in writing signed by the Lendersrequired pursuant to Section 9.2, and then only to the extent insuch writing specifically set forth.  All remedies contained in the LoanDocuments or by law afforded shall be cumulative and all shall be available tothe Administrative Agent and the Lenders until the Obligations have been paidin full.

## 9.4             Insolvency of Borrower

.  In the event of the insolvency of the Borrower,the Lenders shall have no obligation to make further disbursements of theFacility, and the outstanding principal balance of the Facility, includingaccrued and unpaid interest thereon, shall be immediately due and payable.

# ARTICLEXGENERALPROVISIONS

## 10.1         Survival of Representations

.  All representations and warranties of the Borrowercontained in this Agreement shall survive delivery of the Notes and the makingof the Loans herein contemplated.

## 10.2         Governmental Regulation

.  Anything contained in this Agreement to thecontrary notwithstanding, no Lender shall be obligated to extend credit to theBorrower in violation of any limitation or prohibition provided by anyapplicable statute or regulation.

## 10.3         No Plan Assets

.  None of the funds to be advanced by the Lendersunder this Agreement will constitute “plan assets” within the meaning of ERISA,the Code and the respective regulations promulgated thereunder.  

 

## 10.4         Headings

.  Section headings in the Loan Documents are forconvenience of reference only, and shall not govern the interpretation of anyof the provisions of the Loan Documents.

## 10.5         Entire Agreement

.  The Loan Documents embody the entire agreement andunderstanding among the Borrower, the Administrative Agent and the Lenders andsupersede all prior commitments, agreements and understandings among theBorrower, the Administrative Agent and the Lenders relating to the subjectmatter thereof.

## 10.6         Several Obligations; Benefits of this Agreement

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.  The respective obligations of the Lendershereunder are several and not joint and no Lender shall be the partner or agentof any other (except to the extent to which the Administrative Agent is authorizedto act as such).  The failure of any Lender to perform any of its obligationshereunder shall not relieve any other Lender from any of its obligationshereunder.  This Agreement shall not be construed so as to confer any right orbenefit upon any Person other than the parties to this Agreement and theirrespective successors and assigns.

## 10.7         Expenses; Indemnification

.  The Borrower shall reimburse the AdministrativeAgent for any reasonable costs and actual documented (reasonable evidence shallbe provided for any expense over $500) out-of-pocket expenses (including,without limitation, all reasonable fees for consultants and fees and reasonableexpenses for attorneys for the Administrative Agent, which attorneys may not beemployees of the Administrative Agent) paid or incurred by the AdministrativeAgent in connection with the amendment, modification, and enforcement of theLoan Documents.  The Borrower also agrees to reimburse the Administrative Agentand the Lenders for any reasonable costs, external charges and out-of-pocketexpenses (including, without limitation, all fees and reasonable expenses forattorneys for the Administrative Agent and the Lenders, which attorneys may notbe employees of the Administrative Agent or the Lenders) paid or incurred bythe Administrative Agent or any Lender in connection with the collection andenforcement of the Loan Documents (including, without limitation, anyworkout).  The Borrower further agrees to indemnify the Administrative Agent,each Lender and their Affiliates, and their directors and officers against alllosses, claims, damages, penalties, judgments, liabilities and expenses(including, without limitation, all reasonable fees and reasonable expenses forattorneys of the indemnified parties, all reasonable expenses of litigation orpreparation therefor whether or not the Administrative Agent, or any Lender isa party thereto) which any of them may pay or incur arising out of or relatingto this Agreement, the other Loan Documents, the Projects, the transactionscontemplated hereby or the direct or indirect application or proposedapplication of the proceeds of any Loan hereunder, except to the extent thatany of the foregoing arise out of the gross negligence or willful misconduct ofthe party seeking indemnification therefor.  The obligations of the Borrowerunder this Section shall survive the termination of this Agreement.  Defense of any such indemnified party shall be provided bycounsel selected by Borrower, subject to the reasonable approval of the indemnifiedparty, promptly after notice to Borrower of the indemnified claims.

## 10.8         Electronic Document Deliveries

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.  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 Lender) pursuant to Article II and (B) the Lender has notnotified the Administrative Agent or Borrower that it cannot or does not wantto receive electronic communications.   The Administrative Agent or theBorrower may, in its discretion, agree to accept notices and othercommunications to it hereunder by electronic delivery pursuant to proceduresapproved by it for all or particular notices or communications.  Documents ornotices delivered electronically shall be deemed to have been deliveredtwenty-four (24) hours after the date and time on which the AdministrativeAgent or Borrower posts such documents or the documents become available on acommercial website and the Administrative Agent or Borrower notifies eachLender of said posting and provides a link thereto provided if such notice orother communication is not sent or posted during the normal business hours ofthe recipient, said posting date and time shall be deemed to have commenced asof  9:00 a.m. on the opening of business on the next business day for therecipient.  Notwithstanding anything contained herein, in every instance theBorrower shall be required to provide paper copies of the ComplianceCertificate to the Administrative Agent and shall deliver paper copies of anydocuments to the Administrative Agent or to any Lender that requests such papercopies until a written request to cease delivering paper copies is given by theAdministrative Agent or such Lender.  Except for the Compliance CertificateProvision,  the Administrative Agent shall have no obligation to request thedelivery of or to maintain paper copies of the documents deliveredelectronically, and in any event shall have no responsibility to monitorcompliance by the Borrower with any such request for delivery.  Each Lendershall be solely responsible for requesting delivery to it of paper copies andmaintaining its paper or electronic documents. 

 

## 10.9         Accounting

.  Except as provided to the contrary herein, allaccounting terms used herein shall be interpreted and all accountingdeterminations hereunder shall be made in accordance with GAAP.

## 10.10     Severability of Provisions

.  Any provision in any Loan Document that is held tobe inoperative, unenforceable, or invalid in any jurisdiction shall, as to thatjurisdiction, be inoperative, unenforceable, or invalid without affecting theremaining provisions in that jurisdiction or the operation, enforceability, orvalidity of that provision in any other jurisdiction, and to this end theprovisions of all Loan Documents are declared to be severable.

## 10.11     Nonliability of Lenders

.  The relationship between the Borrower, on the onehand, and the Lenders and the Administrative Agent, on the other, shall besolely that of borrower and lender.  Neither the Administrative Agent nor anyLender shall have any fiduciary responsibilities to the Borrower.  Neither theAdministrative Agent nor any Lender undertakes any responsibility to theBorrower to review or inform the Borrower of any matter in connection with anyphase of the Borrower’s business or operations.

## 10.12     CHOICE OF LAW

.  THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING ACONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITHTHE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF OHIO, BUTGIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

## 10.13     SUBMISSION TO JURISDICTION

.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLYAND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVEJURISDICTION OF ANY UNITED STATES FEDERAL OR OHIO STATE COURT SITTING INCLEVELAND AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDINGARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FORRECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETOIRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCHACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH OHIO STATE COURT OR,TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACHOF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION ORPROCEEDING SHALL BE CONCLUSIVE, AFTER EXPIRATION OF ANY APPEAL PERIODSAPPLICABLE THERETO, AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THEJUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT ORIN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVEAGENT, ANY LENDER OR THE ISSUING LENDER MAY OTHERWISE HAVE TO BRING ANY ACTIONOR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THEBORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANYJURISDICTION.

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## 10.14      WAIVEROF VENUE

.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLYAND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANYACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHERLOAN DOCUMENT IN ANY COURT REFERRED TO IN SECTION 10.13.  EACH OF THEPARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCHACTION OR PROCEEDING IN ANY SUCH COURT AND AGREES NOT ASSERT ANY SUCH DEFENSE.

## 10.15     SERVICE OF PROCESS

.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICEOF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.1.  NOTHING IN THISAGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANYOTHER MANNER PERMITTED BY APPLICABLE LAW.

## 10.16        WAIVEROF JURY TRIAL

.  THE BORROWER, THE ADMINISTRATIVE AGENT AND EACHLENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OROTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOANDOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

# ARTICLEXITHEADMINISTRATIVE AGENT

## 11.1         Appointment and Authority

.  Each of the Lenders and the Issuing Lender herebyirrevocably appoints PNC to act on its behalf as the Administrative Agenthereunder and under the other Loan Documents and authorizes the AdministrativeAgent to take such actions on its behalf and to exercise such powers as aredelegated to the Administrative Agent by the terms hereof or thereof, togetherwith such actions and powers as are reasonably incidental thereto.  Theprovisions of this Section 11 are solely for the benefit of theAdministrative Agent, the Lenders and the Issuing Lender, and neither theBorrower nor any other Loan Party shall have rights as a third partybeneficiary of any of such provisions.

## 11.2         Rights as a Lender

.  The Person serving as the Administrative Agenthereunder shall have the same rights and powers in its capacity as a Lender asany other Lender and may exercise the same as though it were not theAdministrative Agent and the term “Lender” or “Lenders” shall, unless otherwiseexpressly indicated or unless the context otherwise requires, include thePerson serving as the Administrative Agent hereunder in its individualcapacity.  Such Person and its Affiliates may accept deposits from, lend moneyto, act as the financial advisor or in any other advisory capacity for andgenerally engage in any kind of business with the Borrower or any Subsidiary orother Affiliate thereof as if such Person were not the Administrative Agenthereunder and without any duty to account therefor to the Lenders.

## 11.3         Exculpatory Provisions

.  The Administrative Agent shall not have any dutiesor obligations except those expressly set forth herein and in the other LoanDocuments.  Without limiting the generality of the foregoing, theAdministrative Agent:

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### (a)               shall not be subject to any fiduciary or other implied duties,regardless of whether a Potential Default or Event of Default has occurred andis continuing;

### (b)              shall not have any duty to take any discretionary action orexercise any discretionary powers, except discretionary rights and powersexpressly contemplated hereby or by the other Loan Documents that theAdministrative Agent is required to exercise as directed in writing by theRequired Lenders (or such other number or percentage of the Lenders as shall beexpressly provided for herein or in the other Loan Documents); provided thatthe Administrative Agent shall not be required to take any action that, in itsopinion or the opinion of its counsel, may expose the Administrative Agent toliability or that is contrary to any Loan Document or applicable Law; and

### (c)               shall not, except as expressly set forth herein and in the otherLoan Documents, have any duty to disclose, and shall not be liable for thefailure to disclose, any information relating to the Borrower or any of itsAffiliates that is communicated to or obtained by the Person serving as theAdministrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liablefor any action taken or not taken by it (i) with the consent or at therequest of the Required Lenders (or such other number or percentage of theLenders as shall be necessary, or as the Administrative Agent shall believe ingood faith shall be necessary, under the circumstances as provided in Sections9.1 and 9.2) or (ii) in the absence of its own gross negligence orwillful misconduct.  The Administrative Agent shall be deemed not to haveknowledge of any Potential Default or Event of Default unless and until noticedescribing such Potential Default or Event of Default is given to theAdministrative Agent by the Borrower, a Lender or the Issuing Lender.

The Administrative Agent shall not beresponsible for or have any duty to ascertain or inquire into (i) anystatement, warranty or representation made in or in connection with thisAgreement or any other Loan Document, (ii) the contents of any certificate,report or other document delivered hereunder or thereunder or in connectionherewith or therewith, (iii) the performance or observance of any of thecovenants, agreements or other terms or conditions set forth herein or thereinor the occurrence of any Potential Default or Event of Default, (iv) thevalidity, enforceability, effectiveness or genuineness of this Agreement, anyother Loan Document or any other agreement, instrument or document or (v) thesatisfaction of any condition set forth in Section 5  or elsewhereherein, other than to confirm receipt of items expressly required to bedelivered to the Administrative Agent.

## 11.4         Reliance by Administrative Agent

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.  The Administrative Agent shall be entitled to relyupon, and shall not incur any liability for relying upon, any notice, request,certificate, consent, statement, instrument, document or other writing(including any electronic message, Internet or intranet website posting orother distribution) believed by it to be genuine and to have been signed, sentor otherwise authenticated by the proper Person.  The Administrative Agent alsomay rely upon any statement made to it orally or by telephone and believed byit to have been made by the proper Person, and shall not incur any liabilityfor relying thereon.  In determining compliance with any condition hereunder tothe making of a Loan, or the issuance of a Facility Letter of Credit, that byits terms must be fulfilled to the satisfaction of a Lender or the IssuingLender, the Administrative Agent may presume that such condition is satisfactoryto such Lender or the Issuing Lender unless the Administrative Agent shall havereceived notice to the contrary from such Lender or the Issuing Lender prior tothe making of such Loan or the issuance of such Facility Letter of Credit.  TheAdministrative Agent may consult with legal counsel (who may be counsel for theBorrower), independent accountants and other experts selected by it, and shallnot be liable for any action taken or not taken by it in accordance with theadvice of any such counsel, accountants or experts.

## 11.5         Delegation of Duties

.  The Administrative Agent may perform any and allof its duties and exercise its rights and powers hereunder or under any otherLoan Document by or through any one or more sub agents appointed by theAdministrative Agent.  The Administrative Agent and any such sub agent mayperform any and all of its duties and exercise its rights and powers by orthrough their respective Related Parties.  The exculpatory provisions of this ArticleXI shall apply to any such sub agent and to the Related Parties of theAdministrative Agent and any such sub agent, and shall apply to theirrespective activities in connection with the syndication of the creditfacilities provided for herein as well as activities as Administrative Agent.

## 11.6         Resignation of Administrative Agent

.  The Administrative Agent may at any time givenotice of its resignation to the Lenders, the Issuing Lender and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall havethe right, with approval from the Borrower (so long as no Event of Default hasoccurred and is continuing), to appoint a successor, such approval not to beunreasonably withheld or delayed.  If no such successor shall have been soappointed by the Required Lenders and shall have accepted such appointmentwithin thirty (30) days after the retiring Administrative Agent gives notice ofits resignation, then the retiring Administrative Agent may on behalf of theLenders and the Issuing Lender, appoint a successor Administrative Agent;provided that if the Administrative Agent shall notify the Borrower and theLenders that no qualifying Person has accepted such appointment, then suchresignation shall nonetheless become effective in accordance with such noticeand (i) the retiring Administrative Agent shall be discharged from its dutiesand obligations hereunder and under the other Loan Documents (except that inthe case of any collateral security held by the Administrative Agent on behalfof the Lenders or the Issuing Lender under any of the Loan Documents, theretiring Administrative Agent shall continue to hold such collateral securityuntil such time as a successor Administrative Agent is appointed) and (ii) allpayments, communications and determinations provided to be made by, to orthrough the Administrative Agent shall instead be made by or to each Lender andthe Issuing Lender directly, until such time as the Required Lenders appoint asuccessor Administrative Agent as provided for above in this Section 11.6. Upon the acceptance of a successor’s appointment as Administrative Agenthereunder, such successor shall succeed to and become vested with all of therights, powers, privileges and duties of the retiring (or retired)Administrative Agent, and the retiring Administrative Agent shall be dischargedfrom all of its duties and obligations hereunder or under the other LoanDocuments (if not already discharged therefrom as provided above in thisSection).  The fees payable by the Borrower to a successor Administrative Agentshall be the same as those payable to its predecessor unless otherwise agreedbetween the Borrower and such successor.  After the retiring AdministrativeAgent’s resignation hereunder and under the other Loan Documents, theprovisions of this Article XI and Section 10.7 shall continue ineffect for the benefit of such retiring Administrative Agent, its sub agentsand their respective Related Parties in respect of any actions taken or omittedto be taken by any of them while the retiring Administrative Agent was actingas Administrative Agent.

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If PNC resigns as Administrative Agent underthis Section 11.6, PNC shall also resign as an Issuing Lender.  Upon theappointment of a successor Administrative Agent hereunder, such successor shall(i) succeed to all of the rights, powers, privileges and duties of PNC as theretiring Issuing Lender and Administrative Agent and PNC shall be dischargedfrom all of its respective duties and obligations as Issuing Lender andAdministrative Agent under the Loan Documents, and (ii) issue letters of creditin substitution for the Facility Letters of Credit issued by PNC, if any,outstanding at the time of such succession or make other arrangementsatisfactory to PNC to effectively assume the obligations of PNC with respect tosuch Facility Letters of Credit.

The Administrative Agent may be removed asadministrative agent by the Required Lenders upon 30 days' prior written noticeif the Administrative Agent (i) shall have committed gross negligence orwillful misconduct in the course of performing its duties hereunder or (ii) hasbecome or is insolvent or has become the subject of a bankruptcy or insolvencyproceeding, or has had a receiver, conservator, trustee or custodian appointedfor it, or has taken any action in furtheranceof, or indicating its consent to, approval of or acquiescence in any suchproceeding or appointment.

## 11.7         Non-Reliance on Administrative Agent and Other Lenders

.  Each Lender and the Issuing Lender acknowledgesthat it has, independently and without reliance upon the Administrative Agentor any other Lender or any of their Related Parties and based on such documentsand information as it has deemed appropriate, made its own credit analysis anddecision to enter into this Agreement.  Each Lender and the Issuing Lender alsoacknowledges that it will, independently and without reliance upon theAdministrative Agent or any other Lender or any of their Related Parties andbased on such documents and information as it shall from time to time deemappropriate, continue to make its own decisions in taking or not taking actionunder or based upon this Agreement, any other Loan Document or any relatedagreement or any document furnished hereunder or thereunder.

## 11.8         No Other Duties, etc.

  Anything herein to the contrary notwithstanding,neither the Syndication Agent nor the Documentation Agent listed on the coverpage hereof shall have any powers, duties or responsibilities under thisAgreement or any of the other Loan Documents, except in its capacity as aLender hereunder.

## 11.9         No Reliance on Administrative Agent’s Customer IdentificationProgram

.  Each Lender acknowledges and agrees that neither suchLender, nor any of its Affiliates, participants or assignees, may rely on theAdministrative Agent to carry out such Lender’s, Affiliate’s, participant’s orassignee’s customer identification program, or other obligations required orimposed under or pursuant to the USA Patriot Act or the regulations thereunder,including the regulations contained in 31 CFR 103.121 (as hereafter amended orreplaced, the “**CIP Regulations**”), or any other Anti-Terrorism Law,including any programs involving any of the following items relating to or inconnection with any of the Loan Parties, their Affiliates or their agents, theLoan Documents or the transactions hereunder or contemplated hereby: (i) anyidentity verification procedures, (ii) any recordkeeping, (iii) comparisonswith government lists, (iv) customer notices or (v) other procedures requiredunder the CIP Regulations or such other Laws.

## 11.10     Requests for Approval

.  If the Administrative Agent requests in writingthe consent or approval of a Lender, such Lender shall respond and eitherapprove or disapprove definitively in writing to the Administrative Agentwithin ten (10) Business Days (or sooner if such notice specifies a shorterperiod for responses based on Administrative Agent’s good faith determinationthat circumstances exist warranting its request for an earlier response) aftersuch written request from the Administrative Agent.  If the Lender does not sorespond, that Lender shall be deemed to have approved the request.

## 11.11     Defaulting Lenders

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.  At such time as a Lender becomes a DefaultingLender, such Defaulting Lender’s right to vote on matters which are subject tothe consent or approval of the Required Lenders, each affected Lender or allLenders shall be immediately suspended until such time as the Lender is nolonger a Defaulting Lender, except that the amount of the Commitment of theDefaulting Lender may not be changed without its consent.  If a DefaultingLender has failed to fund its pro rata share of any Advance and until such timeas such Defaulting Lender subsequently funds its pro rata share of suchAdvance, all Obligations owing to such Defaulting Lender hereunder shall be subordinatedin right of payment, as provided in the following sentence, to the priorpayment in full of all principal of, interest on and fees relating to the Loansfunded by the other Lenders in connection with any such Advance in which theDefaulting Lender has not funded its pro rata share (such principal, interestand fees being referred to as “Senior Loans” for the purposes of thissection).  All amounts paid by Borrower or the Subsidiary Guarantors andotherwise due to be applied to the Obligations owing to such Defaulting Lenderpursuant to the terms hereof shall be distributed by the Administrative Agentto the other Lenders in accordance with their respective pro rata shares(recalculated for the purposes hereof to exclude the Defaulting Lender) untilall Senior Loans have been paid in full provided, however, in no event will anysuch distribution to the other Lenders give rise to any liability of theBorrower to the Defaulting Lender.  After the Senior Loans have been paid infull equitable adjustments will be made in connection with future payments bythe Borrower to the extent a portion of the Senior Loans had been repaid withamounts that otherwise would have been distributed to a Defaulting Lender butfor the operation of this Section 11.11.  This provision governsonly the relationship among the Administrative Agent, each Defaulting Lenderand the other Lenders; nothing hereunder shall limit the obligation of theBorrower to repay all Loans in accordance with the terms of this Agreement. The provisions of this section shall apply and be effective regardless ofwhether an Event of Default occurs and is continuing, and notwithstanding (i)any other provision of this Agreement to the contrary, (ii) any instruction ofthe Borrower as to its desired application of payments or (iii) the suspensionof such Defaulting Lender’s right to vote on matters which are subject to theconsent or approval of the Required Lenders or all Lenders.

# ARTICLEXIISETOFF;RATABLE PAYMENTS

## 12.1         Setoff

.  In addition to, and without limitation of, anyrights of the Lenders under applicable law, if the Borrower becomes insolvent,or any Event of Default occurs and is continuing, any and all deposits(including all account balances, whether provisional or final and whether ornot collected or available) and any other Indebtedness at any time held orowing by any Lender or any of its Affiliates to or for the credit or account ofthe Borrower may be offset and applied toward the payment of the Obligationsowing to such Lender at any time prior to the date that such Event of Defaulthas been fully cured, whether or not the Obligations, or any part hereof, shallthen be due, provided that no Lender shall take such an offset if such actioncould reasonably be deemed to constitute an election of remedies under thisAgreement that would in any way limit or impair any of the other rights andremedies of the Administrative Agent and other Lenders hereunder with respectto such Event of Default. Notwithstanding anything herein to the contrary, theconsent of the Required Lenders shall be required prior to the exercise ofsetoff rights by any Lender.

## 12.2         Ratable Payments

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.  If any Lender shall, by exercising any right ofsetoff, counterclaim or banker’s lien, by receipt of voluntary payment, byrealization upon security, or by any other non-pro rata source, obtain paymentin respect of any principal of or interest on any of its Loans or otherobligations hereunder resulting in such Lender’s receiving payment of aproportion of the aggregate amount of its Loans and accrued interest thereon orother such obligations greater than the pro-rata share of the amount suchLender is entitled thereto, then the Lender receiving such greater proportionshall (a) notify the Administrative Agent of such fact, and (b) purchase (forcash at face value) participations in the Loans and such other obligations ofthe other Lenders, or make such other adjustments as shall be equitable, sothat the benefit of all such payments shall be shared by the Lenders ratably inaccordance with the aggregate amount of principal of and accrued interest ontheir respective Loans and other amounts owing them, provided that:

### (a)               if any such participations are purchased and all or any portionof the payment giving rise thereto is recovered, such participations shall berescinded and the purchase price restored to the extent of such recovery,together with interest or other amounts, if any, required by Law (includingcourt order) to be paid by the Lender or the holder making such purchase; and

### (b)              the provisions of this Section 12.2 shall not be construedto apply to (x) any payment made by the Loan Parties pursuant to and inaccordance with the express terms of the Loan Documents or (y) any paymentobtained by a Lender as consideration for the assignment of or sale of aparticipation in any of its Loans or participations in Advances to any assigneeor participant, other than to the Borrower or any Subsidiary thereof (as towhich the provisions of this Section 12.2 shall apply).

Each Loan Party consents to the foregoing and agrees,to the extent it may effectively do so under applicable Law, that any Lenderacquiring a participation pursuant to the foregoing arrangements may exerciseagainst each Loan Party rights of setoff and counterclaim with respect to suchparticipation as fully as if such Lender were a direct creditor of each LoanParty in the amount of such participation.

Any Lender that fails at any time to comply with theprovisions of this Section 12.2 shall be deemed a Defaulting Lenderuntil such time as it performs its obligations hereunder and is not otherwise aDefaulting Lender for any other reason.  A Defaulting Lender shall be deemed tohave assigned any and all payments due to it from the Borrower, whether onaccount of or relating to outstanding Loans, Facility Letters of Credit,interest, fees or otherwise, to the remaining non-defaulting Lenders forapplication to, and reduction of, their respective Ratable Share of alloutstanding Loans and other unpaid Obligations of any of the Loan Parties.  TheDefaulting Lender hereby authorizes the Administrative Agent to distribute suchpayments to the non-defaulting Lenders in proportion to their respectiveRatable Share of all outstanding Loans and other unpaid Obligations of any ofthe Loan Parties to which such Lenders are entitled.  A Defaulting Lender shallbe deemed to have satisfied the provisions of this Section 12.2 when andif, as a result of application of the assigned payments to all outstandingLoans and other unpaid Obligations of any of the Loan Parties to thenon-defaulting Lenders, the Lenders’ respective Ratable Share of alloutstanding Loans and unpaid Obligations have returned to those in effectimmediately prior to such violation of this Section 12.2.

# ARTICLEXIIIBENEFITOF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

## 13.1         Successors and Assigns Generally

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.  The provisions of this Agreement shall be bindingupon, and inure to the benefit of, the parties hereto and their respectivesuccessors and assigns permitted hereby, except that neither the Borrower norany other Loan Party may assign or otherwise transfer any of its rights orobligations hereunder without the prior written consent of the AdministrativeAgent and each Lender and no Lender may assign or otherwise transfer any of itsrights or obligations hereunder except (i) to an assignee in accordance withthe provisions of Section 13.2, (ii) by way of participation inaccordance with the provisions of Section 13.4, or (iii) by way ofpledge or assignment of a security interest subject to the restrictions of Section13.6 (and any other attempted assignment or transfer by any party heretoshall be null and void).  Nothing in this Agreement, expressed or implied,shall be construed to confer upon any Person (other than the parties hereto,their respective successors and assigns permitted hereby, Participants to theextent provided in Section 13.4 and, to the extent expresslycontemplated hereby, the Related Parties of each of the Administrative Agentand the Lenders) any legal or equitable right, remedy or claim under or byreason of this Agreement.  

            PNC Bank, National Association, agrees tohold no less than ten percent (10%) of the Aggregate Commitment for so long asit shall serve as the Administrative Agent hereunder.  If an Event of Defaultshould occur pursuant to the terms of this Agreement, Administrative Agentshall be allowed to transfer all of its rights and obligations hereunder.

## 13.2         Assignments by Lenders

.  Any Lender may at any time assign to one or moreassignees all or a portion of its rights and obligations under this Agreement(including all or a portion of its Commitment and the Loans at the time owingto it); provided that any such assignment shall be subject to the followingconditions:

### (a)               Minimum Amounts.

#### (i)                in the case of an assignment of the entire remaining amount ofthe assigning Lender’s Commitment and the Loans at the time owing to it or inthe case of an assignment to a Lender or an Affiliate of a Lender, no minimumamount need be assigned; and

#### (ii)              in any case not described in clause (a)(i) of this Section13.2, the aggregate amount of the Commitment (which for this purposeincludes Loans outstanding thereunder) or, if the applicable Commitment is notthen in effect, the principal outstanding balance of the Loans of the assigningLender subject to each such assignment (determined as of the date theAssignment and Assumption Agreement with respect to such assignment isdelivered to the Administrative Agent or, if “Trade Date” is specified in theAssignment and Assumption Agreement, as of the Trade Date) shall not be lessthan $5,000,000, unless each of the Administrative Agent and, so long as noEvent of Default has occurred and is continuing, the Borrower otherwiseconsents (each such consent not to be unreasonably withheld or delayed).

### (b)              Proportionate Amounts.  Each partial assignment shall bemade as an assignment of a proportionate part of all the assigning Lender’srights and obligations under this Agreement with respect to the Loan or theCommitment assigned.

### (c)               Required Consents.  No consent shall be required for anyassignment except for the consent of the Administrative Agent (which shall notbe unreasonably withheld or delayed) and:

#### (i)                the consent of the Borrower (such consent not to be unreasonablywithheld or delayed) shall be required unless (x) an Event of Default hasoccurred and is continuing at the time of such assignment or (y) suchassignment is to a Lender, an Affiliate of a Lender; and

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#### (ii)              the consent of the Issuing Lender (such consent not to beunreasonably withheld or delayed) shall be required for any assignment thatincreases the obligation of the assignee to participate in exposure under oneor more Letters of Credit (whether or not then outstanding).

### (d)              Assignment and Assumption Agreement.  The parties to eachassignment shall execute and deliver to the Administrative Agent an Assignmentand Assumption Agreement, together with a processing and recordation fee of$3,500, and the assignee, if it is not a Lender, shall deliver to theAdministrative Agent an administrative questionnaire provided by theAdministrative Agent.

### (e)               No Assignment to Borrower.  No such assignment shall bemade to the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

### (f)               No Assignment to Natural Persons.  No such assignmentshall be made to a natural person.

Subject to acceptance and recording thereof by theAdministrative Agent pursuant to Section 13.3, from and after theeffective date specified in each Assignment and Assumption Agreement, theassignee thereunder shall be a party to this Agreement and, to the extent ofthe interest assigned by such Assignment and Assumption Agreement, have therights and obligations of a Lender under this Agreement, and the assigningLender thereunder shall, to the extent of the interest assigned by suchAssignment and Assumption Agreement, be released from its obligations underthis Agreement (and, in the case of an Assignment and Assumption Agreementcovering all of the assigning Lender’s rights and obligations under thisAgreement, such Lender shall cease to be a party hereto) but shall continue tobe entitled to the benefits of Sections 4.5, 4.1 and 10.7with respect to facts and circumstances occurring prior to the effective dateof such assignment.  Any assignment or transfer by a Lender of rights orobligations under this Agreement that does not comply with this Section 13.2shall be treated for purposes of this Agreement as a sale by such Lender of aparticipation in such rights and obligations in accordance with Section 13.4.PNC agrees that if, at any time that PNC shall have made an assignment orassignments which result in PNC having no Commitment or outstanding Advanceshereunder, an Event of Default shall have occurred, PNC shall promptly resignas Administrative Agent and a replacement Administrative Agent shall be selectedas provided in Section 11.6 above, 

## 13.3         Register

.  The Administrative Agent, acting solely for thispurpose as an agent of the Borrower, shall maintain a record of the names andaddresses of the Lenders, and the Commitments of, and principal amounts of theLoans owing to, each Lender pursuant to the terms hereof from time to time. Such register shall be conclusive, and the Borrower, the Administrative Agentand the Lenders may treat each Person whose name is in such register pursuantto the terms hereof as a Lender hereunder for all purposes of this Agreement,notwithstanding notice to the contrary.  Such register shall be available forinspection by the Borrower and any Lender, at any reasonable time and from timeto time upon reasonable prior notice.

## 13.4         Participations

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.  Any Lender may at any time, without the consentof, or notice to, the Borrower or the Administrative Agent, sell participationsto any Person (other than a natural person or the Borrower or any of theBorrower’s Affiliates or Subsidiaries) (each, a “**Participant**”) in all ora portion of such Lender’s rights and/or obligations under this Agreement(including all or a portion of its Commitment and/or the Loans owing to it);provided that (i) such Lender’s obligations under this Agreement shall remainunchanged, (ii) such Lender shall remain solely responsible to the otherparties hereto for the performance of such obligations and (iii) the Borrower,the Administrative Agent and the Lenders, Issuing Lender shall continue to dealsolely and directly with such Lender in connection with such Lender’s rightsand obligations under this Agreement.

Any agreement or instrument pursuant to which aLender sells such a participation shall provide that such Lender shall retainthe sole right to enforce this Agreement and to approve any amendment,modification or waiver of any provision of this Agreement; provided that suchagreement or instrument may provide that such Lender will not, without theconsent of the Participant, agree to any amendment, modification or waiver withrespect to Sections 9.2(a) or 9.2(d).   Subject to the otherprovisions of this Article XIII, the Borrower agrees that eachParticipant shall be entitled to the benefits of Sections 4.5 and 4.1to the same extent as if it were a Lender and had acquired its interest byassignment pursuant to Section 13.2, provided however that if suchParticipant makes a claim under such Sections 4.5 or 4.1, such Participantshall be subject to replacement at the direction of the Borrower under Section2.20 as if such Participant were a Lender.  To the extent permitted by Law,each Participant also shall be entitled to the benefits of Section 12.1as though it were a Lender; provided such Participant agrees to be subject to Section12.2 as though it were a Lender. 

## 13.5         Limitations upon Participant Rights Successors and AssignsGenerally

.  A Participant shall not be entitled to receive anygreater payment under Sections 4.1, 4.2 or 10.7 than theapplicable Lender would have been entitled to receive with respect to the participationsold to such Participant, unless the sale of the participation to suchParticipant is made with the Borrower’s prior written consent.  A Participantthat would be a Foreign Lender if it were a Lender shall not be entitled to thebenefits of Section 4.2 unless the Borrower is notified of theparticipation sold to such Participant and such Participant agrees, for thebenefit of the Borrower, to comply with Section 4.2 as though it were aLender.

## 13.6         Certain Pledges; Successors and Assigns Generally

.  Any Lender may at any time pledge or assign asecurity interest in all or any portion of its rights under this Agreement tosecure obligations of such Lender, including any pledge or assignment to secureobligations to a Federal Reserve Bank; provided that no such pledge orassignment shall release such Lender from any of its obligations hereunder orsubstitute any such pledgee or assignee for such Lender as a party hereto.

## 13.7         Confidentiality

.

### (a)               General

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.  Each of the Administrative Agent, the Lenders andthe Issuing Lender agrees to maintain the confidentiality of the Information,except that Information may be disclosed (i) to its Affiliates and to its andits Affiliates’ respective partners, directors, officers, employees, agents,advisors and other representatives (it being understood that the Persons towhom such disclosure is made will be informed of the confidential nature ofsuch Information and instructed to keep such Information confidential), (ii) tothe extent requested by any regulatory authority purporting to havejurisdiction over it (including any self-regulatory authority, such as theNational Association of Insurance Commissioners), (iii) to the extent requiredby applicable Laws or regulations or by any subpoena or similar legal process,(iv) to any other party hereto, (v) in connection with the exercise of anyremedies hereunder or under any other Loan Document or any action or proceedingrelating to this Agreement or any other Loan Document or the enforcement ofrights hereunder or thereunder, (vi) subject to an agreement containingprovisions substantially the same as those of this Section, to (A) any assigneeof or Participant in, or any prospective assignee of or Participant in, any ofits rights or obligations under this Agreement or (B) any actual or prospectivecounterparty (or its advisors) to any swap or derivative transaction relatingto the Borrower and its obligations, (vii) with the consent of the Borrower or(viii) to the extent such Information (Y) becomes publicly available other thanas a result of a breach of this Section or (Z) becomes available to theAdministrative Agent, any Lender, the Issuing Lender or any of their respectiveAffiliates on a nonconfidential basis from a source other than the Borrower orthe other Loan Parties.  Any Person required to maintain the confidentiality ofInformation as provided in this Section shall be considered to have compliedwith its obligation to do so if such Person has exercised the same degree ofcare to maintain the confidentiality of such Information as such Person wouldaccord to its own confidential information.

### (b)              Sharing Information With Affiliates of the Lenders

.  Each Loan Party acknowledges that from time totime financial advisory, investment banking and other services may be offeredor provided to the Borrower or one or more of its Affiliates (in connectionwith this Agreement or otherwise) by any Lender or by one or more Subsidiariesor Affiliates of such Lender and each of the Loan Parties hereby authorizeseach Lender to share any information delivered to such Lender by such LoanParty and its Subsidiaries pursuant to this Agreement to any such Subsidiary orAffiliate subject to the provisions of this Section 13.7.

# ARTICLEXIVNOTICES

## 14.1         Giving Notice

.  All notices and other communications provided toany party hereto under this Agreement or any other Loan Document shall be inwriting or by telex or by facsimile and addressed or delivered to such party atits address set forth below its signature hereto or at such other address (orto counsel for such party) as may be designated by such party in a notice tothe other parties.  Any notice, if mailed and properly addressed with postageprepaid, shall be deemed given when received; any notice, if transmitted bytelex or facsimile, shall be deemed given when transmitted (answerbackconfirmed in the case of telexes).

## 14.2         Change of Address

.  The Borrower, the Administrative Agent and anyLender may each change the address for service of notice upon it by a notice inwriting to the other parties hereto.

# ARTICLEXVPATRIOTACT

Each Lender that is subject to the USA Patriot Act and theAdministrative Agent (for itself and not on behalf of any Lender) herebynotifies Loan Parties that pursuant to the requirements of the USA Patriot Act,it is required to obtain, verify and record information that identifies theLoan Parties, which information includes the name and address of Loan Partiesand other information that will allow such Lender or Administrative Agent, asapplicable, to identify the Loan Parties in accordance with the USA PatriotAct.

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# ARTICLEXVICOUNTERPARTS

This Agreement may beexecuted in counterparts (and by different parties hereto in differentcounterparts), each of which shall constitute an original, but all of whichwhen taken together shall constitute a single contract.  This Agreement and theother Loan Documents, and any separate letter agreements with respect to feespayable to the Administrative Agent, constitute the entire contract among theparties relating to the subject matter hereof and supersede any and allprevious agreements and understandings, oral or written, relating to thesubject matter hereof including any prior confidentiality agreements andcommitments.  Except as provided in Article V, this Agreement shallbecome effective when it shall have been executed by the Administrative Agentand when the Administrative Agent shall have received counterparts hereof that,when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement bytelecopy or e-mail shall be effective as delivery of a manually executedcounterpart of this Agreement.

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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, anOhio corporation

 

 

By:       /s/ Lou Fatica                                                   

Name:    Lou Fatica                                                      

Title:      VP& CFO                                                     

 

1 AEC Parkway

Richmond Heights, OH  44143

Attention:  Chief Financial Officer &Legal Department

Phone:  216-261-3902

Facsimile:  216-797-8779

 

With a copy to:

 

Greenberg Traurig, LLP77 West Wacker DriveChicago, IL  60601

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

 

S-1

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COMMITMENT:                                             PNCBANK, NATIONAL ASSOCIATION, 

$50,000,000                                                    Individuallyand as Administrative Agent

 

 

By:       /s/ John E. Wilgus, II                                        

Name:       John E. Wilgus, II                                       

Title:        Senior Vice President                                  

 

PNCReal Estate

1900East Ninth Street - 22nd Floor

MailStop:  B7-YB13-22-1

Cleveland,OH  44114

Phone:  216-222-6032

Facsimile:  216-222-6070                    

Attention:   JohnE. Wilgus, II

                  SeniorVice President

                  RealEstate Banking

                                    

S-2

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COMMITMENT:                                             WELLSFARGO BANK, N.A., individually and as

$50,000,000                                                    SyndicationAgent

 

 

By:       /s/ Antoinette G. Perry                                     

Name:       Antoinette G. Perry                                     

Title:        Vice President                                             

                                    200 Public Square

                                    Suite 3200

                                    Cleveland, OH 44114

                                    Attention:  ToniG. Perry

                                    Phone: 216-344-6946

                                    Facsimile: 216-344-6971

S-3

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COMMITMENT:                                             U.S.BANK NATIONAL ASSOCIATION, 

$30,000,000                                                    individuallyand as Documentation Agent

                                                                        

 

By:  /s/ Donald J. Pafford                                            

Name: Donald J. Pafford

Title:    SeniorVice President

                                    U.S. Bank NationalAssociation

                                    209 South LaSalleStreet, Suite 210

                                    Chicago, IL 60604

                                    Attention:  CurtM. Steiner, Senior Vice President

                                    Phone:(312)325-8756

                                    Facsimile:(312)325-8853

S-4

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COMMITMENT:                                             RAYMONDJAMES BANK, FSB

$25,000,000

 

 

By:  /s/ James M. Armstrong                                        

Name: James Armstrong

Title:    VicePresident                                                  

                                    710 CarillonParkway

                                    St. Petersburg,FL  33716

                                    Attention:  JamesArmstrong

                                    Phone: 727-567-7919

                                    Facsimile: 866-205-1396

S-5

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COMMITMENT:                                             THEHUNTINGTON NATIONAL BANK

$25,000,000

 

 

By:       /s/ Michael Kauffman                                      

Name:    Michael Kauffman                                        

Title:      Senior Vice President                                    

                                    

                                    917 Euclid Avenue,CM17

                                    Cleveland, OH 44115

                                    Attention: Jennifer Hearns

                                    Phone: 216-515-6923

                                    Facsimile: 216-515-0179

 

                                    withnotice to:

 

917Euclid Avenue, CM17

                                    Cleveland, OH 44115

                                    Attention: Timothy Smith

                                    Phone: 216-515-0368

                                    Facsimile: 216-515-0179

S-6

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COMMITMENT:                                             CITIBANK,N.A.

$25,000,000                                                    

 

By:       /s/ John C. Rowland                                         

Name:    John C. Rowland                                           

Title:     Citibank, N.A.                                               

 

Citibank,N.A.

388Greenwich Street, 23rd Floor

NewYork, NY  10013

Attention: John C. Rowland

Phone:  212-816-4947

Email:  john.c.rowland@citi.com 

 

 

S-7

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COMMITMENT:                                             COMPASSBANK, an Alabama banking corporation

$25,000,000                                                    

 

By:       /s/ S. Kent Gorman                                          

Name:  S. Kent Gorman

Title:  SeniorVice President

BBVA Compass

15South 20th Street, Suite 1504

Birmingham,AL  35233

Attention: S. Kent Gorman

Phone:  205-297-3328

Facsimile:  205-297-3901

** **

S-8

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COMMITMENT:                                             RBSCITIZENS BANK N.A. d/b/a CHARTER ONE

$20,000,000                                                    

 

By:  /s/ Michelle L. Lyles                                             

Name:  Michelle L. Lyles

Title:  AssistantVice President

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

1215Superior Avenue, OH S675

Cleveland,OH  44114

Attention: Samuel A. Bluso

Phone:  216-277-0388

Facsimile:  216-277-4600

** **

** **

** **

S-9

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**EXHIBIT A**

 

FORM OF NOTE

 

 

____________, 2010

 

 

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 PNC Bank, NationalAssociation in Cleveland, Ohio, as Administrative Agent, together with intereston the unpaid principal amount hereof at the rates and on the dates set forthin the Agreement.  The Borrower shall pay remaining unpaid principal of andaccrued and unpaid interest on the Loans in full on the Facility TerminationDate or such 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 ____________, 2010 among the Borrower, PNC Bank, NationalAssociation, individually and as Administrative Agent, and the other Lendersnamed therein, to which Agreement, as it may be amended from time to time,reference is hereby made for a statement of the terms and conditions governingthis Note, including the terms and conditions under which this Note may beprepaid or its maturity date accelerated.  Capitalized terms used herein andnot otherwise defined herein are used with the meanings attributed to them inthe Agreement.

If there is an Event of Defaultunder the Agreement or any other Loan Document and Administrative Agentexercises the remedies provided under the Agreement and/or any of the LoanDocuments for the Lenders, then in addition to all amounts recoverable by theAdministrative Agent and the Lenders under such documents, the AdministrativeAgent and the Lenders shall be entitled to receive reasonable attorneys feesand expenses incurred by the Administrative Agent and the Lenders in connectionwith the exercise 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-1

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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-2

----

 

 

 

 

 

 

SCHEDULE OF LOANS AND PAYMENTS OFPRINCIPAL

TO

NOTE OF ASSOCIATED ESTATES REALTYCORPORATION

DATED ___________, 2010

 

 

                                                                                               Maturity

                           Principal                   Maturity                     Principal

                           Amountof                of Interest                   Amount                       Unpaid

Date                    Loan                         Period                         Paid                             Balance

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

A-3

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**EXHIBIT B**

 

COMPLIANCE CERTIFICATE

 

 

PNCBank, National Association, as Administrative Agent

InvestmentReal Estate

1900East Ninth Street - 22nd Floor

MailStop:  B7-YB13-22-1

Cleveland,OH  44114

 

 
| Re: | Amended and Restated Credit  Agreement dated as of October __, 2010 (as amended, modified, supplemented,  restated, or renewed, from time to time, the “Agreement”) between ASSOCIATED ESTATES REALTY  CORPORATION (the “Borrower”), and PNC BANK, NATIONAL ASSOCIATION, as  Administrative Agent for itself and the other lenders parties thereto from  time to time (“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, Borrowerhereby certifies to the Lenders that the information furnished in the attachedschedules, including, without limitation, each of the calculations listed beloware true, correct and complete in all material respects as of the last day ofthe fiscal periods subject to the financial statements and associated covenantsbeing delivered to the Lenders pursuant to the Agreement together with thisCertificate (such statements the “Financial Statements” and the periods coveredthereby the “reporting period”) and for such reporting periods.

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 reporting periods.

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 Event of Default exists as of the date hereof or existed at anytime during the reporting period, except as expressly noted on Schedule Bhereto.

IN WITNESS WHEREOF, this Certificate is executed by theundersigned this ___ day of October, 2010.

ASSOCIATEDESTATES REALTY CORPORATION,

an Ohiocorporation

 

 

By:                                                                                     

Name:                                                                                

Title:                                                                                  

B-2

----

 

 

 

 

 

**SCHEDULE A**

 

FINANCIAL DATA AND COMPUTATIONS

 

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 swing loans includedin such facilities) and (ii) to the extent permitted to be assigned underapplicable law, all claims, suits, causes of action and any other right of theAssignor (in its capacity as a Lender) against any Person, whether known orunknown, 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

 

                                                                           C-1

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5.         Credit Agreement:        TheAmended and Restated Credit Agreement dated as of October _, 2010 amongAssociated Estates Realty Corporation, the Lenders parties thereto, PNC Bank,National Association, as Administrative Agent, and the other agents partiesthereto

 

6.          Assigned Interest:       ______________________

 
| 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]

 

                                                                                                    C-2

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Effective Date:   _____________ ___, 20___ [TO BEINSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OFRECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumptionare hereby agreed to:

                                                                        ASSIGNOR

                                                                        [NAMEOF ASSIGNOR]

 

                                                                        By:______________________________

                                                                          Title:

 

                                                                        ASSIGNEE

                                                                        [NAMEOF ASSIGNEE]

 

                                                                        By:______________________________

                                                                          Title:

[Consented to and][5]Accepted:

 

PNC Bank, NationalAssociation, 

as Administrative Agent

 

By_________________________________

  Title:

 

[Consented to:][6]

 

Associated Estates RealtyCorporation

 

By________________________________

 Title:                                                                                       C-2

----

 

 

 

 

 

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, asapplicable, and such other documents and information as it has deemedappropriate to make its own credit analysis and decision to enter into thisAssignment and Assumption and to purchase the Assigned Interest on the basis ofwhich it has made such analysis and decision independently and without relianceon the Administrative Agent or any other Lender, and (v) if it is a ForeignLender[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 deemappropriate at the time, continue to make its own credit decisions in taking ornot taking action under the Credit Documents, and (ii) it will perform inaccordance with their terms all of the obligations which by the terms of theCredit Documents are 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**

 

SUBSIDIARY GUARANTY

This Guaranty is made as ofOctober __, 2010 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 PNC Bank, National Association,individually (“National City”) and as administrative agent (“AdministrativeAgent”) for itself and the lenders under the Credit Agreement (as definedbelow) and their 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 Lendersmake a revolving credit facility available to Borrower in an aggregateprincipal amount of $250,000,000, subject to increase up to $300,000,000 (the “Facility”).

B.         The Lenders haveagreed to make available the Facility to Borrower pursuant to the terms andconditions set forth in an Amended and Restated Credit Agreement of even dateherewith among Borrower, National City, individually, and as AdministrativeAgent, and the Lenders named therein (as amended, modified or restated fromtime to time, the “Credit Agreement”).  All capitalized terms usedherein and not otherwise defined shall have the meanings ascribed to such termsin the Credit Agreement.

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 Guarantors absolutely,unconditionally, and irrevocably guaranty to each of the Lenders:

                                                                           2D-1

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## (a)        the full and prompt payment of the principal of and interest onthe Notes when due, whether at stated maturity, upon acceleration or otherwise,and at all times thereafter, and the prompt payment of all sums which may nowbe or may hereafter become due and owing under the Notes, the Credit Agreement,and the other Loan Documents;

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

## (c)        the full, complete, and punctual observance, performance, andsatisfaction of all of the obligations, duties, covenants, and agreements ofBorrower under the Credit Agreement and the Loan Documents.

All amounts due, debts,liabilities, and payment obligations described in subparagraphs (a) and (b) ofthis Paragraph 1 are referred to herein as the “FacilityIndebtedness.”  All obligations described in subparagraph (c) of this Paragraph 1are referred to herein as the “Obligations.”  Subsidiary Guarantors andLenders agree that Subsidiary Guarantors’ obligations hereunder shall notexceed the greater of:  (i) the aggregate amount of all monies received,directly or indirectly, by Subsidiary Guarantors from Borrower after the datehereof (whether by loan, capital infusion or other means), or (ii) themaximum amount of the Facility Indebtedness not subject to avoidance underTitle 11 of the United States Code, as same may be amended from time to time,or any applicable state law (the “Bankruptcy Code”).  To that end, tothe extent such obligations would otherwise be subject to avoidance under theBankruptcy Code if Subsidiary Guarantors are not deemed to have receivedvaluable consideration, fair value or reasonably equivalent value for itsobligations hereunder, each Subsidiary Guarantor’s obligations hereunder shallbe reduced to that amount which, after giving effect thereto, would not rendersuch Subsidiary Guarantor insolvent, or leave such Subsidiary Guarantor with anunreasonably small capital to conduct its business, or cause such Subsidiary Guarantorto have incurred debts (or intended to have incurred debts) beyond its abilityto pay such debts as they mature, as such terms are determined, and at the timesuch obligations are deemed to have been incurred, under the Bankruptcy Code. In the event a Subsidiary Guarantor shall make any payment or payments underthis Guaranty each other Subsidiary Guarantor of the Facility Indebtednessshall contribute to such Subsidiary Guarantor an amount equal to suchnon-paying Subsidiary Guarantor’s pro rata share (based on their respectivemaximum liabilities hereunder) of such payment or payments made by suchSubsidiary Guarantor, provided that such contribution right shall besubordinate and junior in right of payment in full of all the FacilityIndebtedness to Lenders.

2.         In the event of any default by Borrower inmaking payment of the Facility Indebtedness, or in performance of theObligations, as aforesaid, in each case beyond the expiration of any applicablegrace period, Subsidiary Guarantors agree, on demand by the AdministrativeAgent or the holder of a Note, to pay all the Facility Indebtedness and toperform all the Obligations as are then or thereafter become due and owing orare to be performed under the terms of the Notes, the Credit Agreement, and theother Loan Documents.

                                                                           2D-2

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3.         Subsidiary Guarantors do hereby waive(i) notice of acceptance of this Guaranty by the Administrative Agent andthe Lenders and any and all notices and demands of every kind which may berequired to be given by any statute, rule or law, (ii) any defense, rightof set-off or other claim which Subsidiary Guarantors may have against Borroweror which Subsidiary Guarantors or Borrower may have against the AdministrativeAgent or the Lenders or the holder of a Note, (iii) presentment forpayment, demand for payment (other than as provided for in Paragraph 2above), notice of nonpayment (other than as provided for in Paragraph 2above) or dishonor, protest and notice of protest, diligence in collection andany and all formalities which otherwise might be legally required to chargeSubsidiary Guarantors with liability, (iv) any failure by theAdministrative Agent and the Lenders to inform Subsidiary Guarantors of anyfacts the Administrative Agent and the Lenders may now or hereafter know aboutBorrower, the Facility, or the transactions contemplated by the CreditAgreement, it being understood and agreed that the Administrative Agent and theLenders have no duty so to inform and that Subsidiary Guarantors are fullyresponsible for being and remaining informed by Borrower of all circumstancesbearing on the existence or creation, or the risk of nonpayment of the FacilityIndebtedness or the risk of nonperformance of the Obligations, and (v) anyand all right to cause a marshalling of assets of Borrower or any other actionby any court or governmental body with respect thereto, or to cause theAdministrative Agent and the Lenders to proceed against any other securitygiven to a Lender in connection with the Facility Indebtedness or the Obligations. Credit may be granted or continued from time to time by the Lenders to Borrowerwithout notice to or authorization from Subsidiary Guarantors, regardless ofthe financial or other condition of Borrower at the time of any such grant orcontinuation.  The Administrative Agent and the Lenders shall have noobligation to disclose or discuss with Subsidiary Guarantors the Lenders’assessment of the financial condition of Borrower.  Subsidiary Guarantorsacknowledge that no representations of any kind whatsoever have been made bythe Administrative Agent and the Lenders to Subsidiary Guarantors.  Nomodification or waiver of any of the provisions of this Guaranty shall bebinding upon the Administrative Agent and the Lenders except as expressly setforth in a writing duly signed and delivered on behalf of the AdministrativeAgent and the Lenders.  Subsidiary Guarantors further agree that anyexculpatory language contained in the Credit Agreement, the Notes, and theother Loan Documents shall in no event apply to this Guaranty, and will notprevent the Administrative Agent and the Lenders from proceeding againstSubsidiary Guarantors to enforce this Guaranty.

                                                                           2D-3

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4.         Subsidiary Guarantors further agree thatSubsidiary Guarantors’ liability as guarantor shall in no way be impaired byany renewals or extensions which may be made from time to time, with or withoutthe knowledge or consent of Subsidiary Guarantors of the time for payment ofinterest or principal under a Note or by any forbearance or delay in collectinginterest or principal under a Note, or by any waiver by the AdministrativeAgent and the Lenders under the Credit Agreement, or any other Loan Documents,or by the Administrative Agent or the Lenders’ failure or election not topursue any other remedies they may have against Borrower, or by any change ormodification in a Note, the Credit Agreement, or any other Loan Documents, orby the acceptance by the Administrative Agent or the Lenders of any security orany increase, substitution or change therein, or by the release by theAdministrative Agent and the Lenders of any security or any withdrawal thereofor decrease therein, or by the application of payments received from any sourceto the payment of any obligation other than the Facility Indebtedness, eventhough a Lender might lawfully have elected to apply such payments to any partor all of the Facility Indebtedness, it being the intent hereof that SubsidiaryGuarantors shall remain liable as principal for payment of the FacilityIndebtedness and performance of the Obligations until all indebtedness has beenpaid in full and the other terms, covenants and conditions of the CreditAgreement, and other Loan Documents and this Guaranty have been performed,notwithstanding any act or thing which might otherwise operate as a legal orequitable discharge of a surety.  Subsidiary Guarantors further understand andagree that the Administrative Agent and the Lenders may at any time enter intoagreements with Borrower to amend and modify a Note, the Credit Agreement orany of the other Loan Documents, or any other documents related thereto, andmay waive or release any provision or provisions of a Note, the CreditAgreement, or any other Loan Document and, with reference to such instruments,may make and enter into any such agreement or agreements as the AdministrativeAgent, the Lenders and Borrower may deem proper and desirable, without in anymanner impairing this Guaranty or any of the Administrative Agent and theLenders’ rights hereunder or any of Subsidiary Guarantors’ obligationshereunder.

5.         This is an absolute, unconditional, complete,present and continuing guaranty of payment and performance and not ofcollection.  Subsidiary Guarantors agree that its obligations hereunder shallbe joint and several with any and all other guarantees given in connection withthe Facility from time to time.  Subsidiary Guarantors agree that this Guarantymay be enforced by the Administrative Agent and the Lenders without thenecessity at any time of resorting to or exhausting any security or collateral,if any, given in connection herewith or with a Note, the Credit Agreement, orany of the other Loan Documents or by or resorting to any other guaranties, andSubsidiary Guarantors hereby waive the right to require the AdministrativeAgent and the Lenders to join Borrower in any action brought hereunder or tocommence any action against or obtain any judgment against Borrower or topursue any other remedy or enforce any other right.  Subsidiary Guarantorsfurther agree that nothing contained herein or otherwise shall prevent theAdministrative Agent and the Lenders from pursuing concurrently or successivelyall rights and remedies available to them at law and/or in equity or under aNote, the Credit Agreement or any other Loan Documents, and the exercise of anyof their rights or the completion of any of their remedies shall not constitutea discharge of any of Subsidiary Guarantors’ obligations hereunder, it beingthe purpose and intent of Subsidiary Guarantors that the obligations of suchSubsidiary Guarantors hereunder shall be primary, absolute, independent andunconditional under any and all circumstances whatsoever.  Neither SubsidiaryGuarantors’ obligations under this Guaranty nor any remedy for the enforcementthereof shall be impaired, modified, changed or released in any mannerwhatsoever by any impairment, modification, change, release or limitation ofthe liability of Borrower under a Note, the Credit Agreement or any other LoanDocument or by reason of Borrower’s bankruptcy or by reason of any creditor orbankruptcy proceeding instituted by or against Borrower.  This Guaranty shallcontinue to be effective and be deemed to have continued in existence or bereinstated (as the case may be) if at any time payment of all or any part ofany sum payable pursuant to a Note, the Credit Agreement or any other LoanDocument is rescinded or otherwise required to be returned by the payee uponthe insolvency, bankruptcy, or reorganization of the payor, all as thoughsuch payment to such Lender had not been made, regardless of whether suchLender contested the order requiring the return of such payment.  Theobligations of Subsidiary Guarantors pursuant to the preceding sentence shallsurvive any termination, cancellation, or release of this Guaranty.

6.         This Guaranty shall be assignable by a Lenderto any assignee of all or a portion of such Lender’s rights under the LoanDocuments.

                                                                           2D-4

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7.         If:  (i) this Guaranty, a Note, or any ofthe Loan Documents are placed in the hands of an attorney for collection or iscollected through any legal proceeding; (ii) an attorney is retained torepresent the Administrative Agent or any Lender in any bankruptcy,reorganization, receivership, or other proceedings affecting creditors’ rightsand involving a claim under this Guaranty, a Note, the Credit Agreement, or anyLoan Document; (iii) an attorney is retained to enforce any of the otherLoan Documents or to provide advice or other representation with respect to theLoan Documents in connection with an enforcement action or potentialenforcement action; or (iv) an attorney is retained to represent theAdministrative Agent or any Lender in any other legal proceedings whatsoever inconnection with this Guaranty, a Note, the Credit Agreement, any of the LoanDocuments, or any property subject thereto (other than any action or proceedingbrought by any Lender or participant against the Administrative Agent alleginga breach by the Administrative Agent of its duties under the Loan Documents),then Subsidiary Guarantors shall pay to the Administrative Agent or such Lenderupon demand all reasonable attorney’s fees, costs and expenses, including,without limitation, court costs, filing fees and all other costs and expensesincurred in connection therewith (all of which are referred to herein as“Enforcement Costs”), in addition to all other amounts due hereunder.

8.         The parties hereto intend that each provisionin this Guaranty comports with all applicable local, state and federal laws andjudicial decisions.  However, if any provision or provisions, or if any portionof any provision or provisions, in this Guaranty is found by a court of law tobe in violation of any applicable local, state or federal ordinance, statute,law, administrative or judicial decision, or public policy, and if such courtshould declare such portion, provision or provisions of this Guaranty to beillegal, invalid, unlawful, void or unenforceable as written, then it is theintent of all parties hereto that such portion, provision or provisions shallbe given force to the fullest possible extent that they are legal, valid andenforceable, that the remainder of this Guaranty shall be construed as if suchillegal, invalid, unlawful, void or unenforceable portion, provision orprovisions were not contained therein, and that the rights, obligations andinterest of the Administrative Agent and the Lender or the holder of a Noteunder the remainder of this Guaranty shall continue in full force and effect.

9.         Any indebtedness of Borrower to SubsidiaryGuarantors now or hereafter existing is hereby subordinated to the FacilityIndebtedness.  Subsidiary Guarantors will not seek, accept, or retain forSubsidiary Guarantors’ own account, any payment from Borrower on account ofsuch subordinated debt at any time when an Event of Default or PotentialDefault exists under the Credit Agreement or the Loan Documents, and any suchpayments to Subsidiary Guarantors made while any Event of Default or PotentialDefault then exists under the Credit Agreement or the Loan Documents on accountof such subordinated debt shall be collected and received by SubsidiaryGuarantors 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 Guarantors hereby subordinate to theFacility Indebtedness any and all claims and rights, including, withoutlimitation, subrogation rights, contribution rights, reimbursement rights andset-off rights, which Subsidiary Guarantors may have against Borrower arisingfrom a payment made by Subsidiary Guarantors under this Guaranty and agreethat, until the entire Facility Indebtedness is paid in full, not to assert ortake advantage of any subrogation rights of Subsidiary Guarantors or theLenders or any right of Subsidiary Guarantors or the Lenders to proceed against(i) Borrower for reimbursement, or (ii) any other guarantor or anycollateral security or guaranty or right of offset held by the Lenders for thepayment of the Facility Indebtedness and performance of the Obligations, norshall Subsidiary Guarantors seek or be entitled to seek any contribution orreimbursement from Borrower or any other guarantor in respect of payments madeby Subsidiary Guarantors hereunder.  It is expressly understood that theagreements of Subsidiary Guarantors set forth above constitute additional andcumulative benefits given to the Lenders for their security and as aninducement for their extension of credit to Borrower.

11.       Any amounts received by a Lender from any sourceon account of any indebtedness may be applied by such Lender toward the paymentof such indebtedness, and in such order of application, as a Lender may fromtime to time elect.

                                                                           2D-5

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12.       Subsidiary Guarantors hereby submit to personaljurisdiction in the State of Ohio for the enforcement of this Guaranty andwaive any and all personal rights to object to such jurisdiction for thepurposes of litigation to enforce this Guaranty.  Subsidiary Guarantors herebyconsent to the jurisdiction of either the Ohio state courts or the UnitedStates District Courts in the state of Ohio, in any action, suit, or proceedingwhich the Administrative Agent or a Lender may at any time wish to file inconnection with this Guaranty or any related matter.  Subsidiary Guarantorshereby agree that an action, suit, or proceeding to enforce this Guaranty maybe brought in any state or federal court in the State of Ohio and hereby waivesany objection which Subsidiary Guarantors may have to the laying of the venueof any such action, suit, or proceeding in any such court; provided, however,that the provisions of this Paragraph shall not be deemed to preclude theAdministrative Agent or a Lender from filing any such action, suit, orproceeding in any other appropriate forum.

13.       All notices and other communications provided toany party hereto under this Agreement or any other Loan Document shall be inwriting or by telex or by facsimile and addressed or delivered to such party atits address set forth below or at such other address 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 facsimile, shall be deemed given whentransmitted.  Notice may be given as follows:

To SubsidiaryGuarantors:

c/o Associated Estates RealtyCorporation

1 AEC Parkway

Richmond Heights, OH  44143

Attention:  Lou Fatica, VicePresident & CFO

Telephone:  (216) 797-8779

Facsimile:  (216) 261-3902

 

With a copy to:

Associated Estates RealtyCorporation

1 AEC Parkway

Richmond Heights, OH  44143

Attention:  Martin Fishman,Vice President and General Counsel

Telephone:  (216) 797-8780

Facsimile:  (216) 797-8719

 

To PNC Bank,National Association as Administrative Agent and as a Lender:

PNC Bank,National Association

PNC Real Estate

1900 East Ninth Street - 22ndFloor

Mail Stop:  B7-YB13-22-1

Cleveland, OH  44114

Phone: 216-222-6032

Facsimile: 216-222-6070                    

Attention:         John E.Wilgus, II, Senior Vice President

                        

 

 

                                                                           2D-6

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With a copyto:  

PNC Bank,National Association

AgencyServices

500 FirstAvenue, 4th Floor

Pittsburgh,PA  15219

Attention: Sharon Turner

Phone: (412) 762-4532

Facsimile: (412) 705-2006

 

With a copy to:

SNR Denton US LLP

233 South Wacker Drive, Suite7800

Chicago, IL  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 theCredit Agreement.

14.       This Guaranty shall be binding upon the heirs,executors, legal and personal representatives, successors and assigns ofSubsidiary Guarantors and shall inure to the benefit of the AdministrativeAgent and the Lenders’ successors and assigns.  

15.       This Guaranty shall be construed and enforcedunder the internal laws of the State of Ohio.

**16.       SUBSIDIARY GUARANTORS, THE ADMINISTRATIVEAGENT AND THE LENDERS, BY THEIR ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY RIGHTTO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTUNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR ARISINGFROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS GUARANTY AND AGREETHAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFOREA JURY.**

17.       From time to time, additional parties mayexecute a joinder substantially in the form of Exhibit A hereto, and therebybecome a party to this Guaranty.  From and after delivery of such joinder, theSubsidiary delivering such joinder shall be a Subsidiary Guarantor, and bebound by all of the terms and provisions of this Guaranty.

*[Signature pageintentionally left blank.]*

                                                                           2D-7

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IN WITNESS WHEREOF, Subsidiary Guarantors have deliveredthis Guaranty in the State of Ohio as of the date first written above.
| ** ** | Sandler at Alta Lago, LLC,  a Virginia limited liability company

 

By:      Associated Estates Realty Corporation,             its sole member

 

 

            By:      ________________________            Name:  Martin A. Fishman

            Title:    Vice  President

  |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | BUCKHEAD AERC, LLC,  a Delaware limited liability company

 

By:      Associated Estates Realty Corporation,             its sole member

 

 

            By:      ________________________            Name:  Martin A. Fishman

            Title:    Vice  President

** **    |
| ** ** | AERC ASHBOROUGH, LLC,  a Delaware limited liability company

 

By:      Associated Estates Realty Corporation,             its sole member

 

 

            By:      ________________________            Name:  Martin A. Fishman

            Title:    Vice  President

** **  |

                                                                           2D-8

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| ** ** | AERC  SAN RAPHAEL, LLC,  a Delaware limited liability company

 

By:      Associated  Estates Realty Corporation,             its sole member

 

 

            By:      ________________________            Name:  Martin A. Fishman

            Title:    Vice  President

** ** |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ASPEN LAKES - AERC, INC.,  a Michigan corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

** **                                                                                                                                                                                                                                                                                                                                                              |
| ** ** | AERC bedford commons, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

** **                                                                                                                                                                                                                                                                                                                                                            |
| ** ** | AERC LAKE FOREST, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President                                                                                                                                                                                                                                                                                                                                                                            |

                                                                           2D-9

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| ** ** | AERC MORGAN PLACE, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

** **        |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | AERC ARROWHEAD STATION, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

        |
| ** ** | AERC bennell, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

** **             |
| ** ** | AERC remington PLACE, INC.,  a Delaware corporation

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

** **

** ** |

                                                                          2D-10

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| ** ** | AERC williamsburg, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

** **  |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | AERC westchester, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

** **   |
| ** ** | AERC sterling park, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

** ** |
| ** ** | AERC kensington grove, INC.,  a Delaware corporation

 

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President          |
| ** ** | AERC western reserve, INC.,  a Delaware corporation

 

By:      ________________________     Name:  Martin  A. Fishman  Title:    Vice President

            |

                                                                          2D-11

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| ** ** | AERC Spring Brook, LLC,

a Delaware limited liability company

 

By:      AERC Brook, Inc.,  its Manager

 

 

            By:      ________________________            Name:  Martin A. Fishman

            Title:    Vice  President

** **        |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | AERC Landings at Preserve, LLC,

a Delaware limited liability company

 

By:      AERC Landings,  Inc., Manager

 

 

            By:      ________________________            Name:  Martin A. Fishman

            Title:    Vice  President

** ** |
| ** ** | AERC Country Place, LLC,

a Delaware limited liability company

 

By:      AERC Country I,  Inc., its Manager

 

 

            By:      ________________________            Name:  Martin A. Fishman

           Title:    Vice  President

** **         |
| ** ** | AERC Georgetown Park, LLC,

a Delaware limited liability company

 

By:      AERC Georgetown,  Inc., its Manager

 

 

            By:      ________________________            Name:  Martin A. Fishman

           Title:    Vice  President

** **      |

                                                                          2D-12

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| ** ** | AERC Oaks Hampton, LLC,

a Delaware limited liability company

 

By:      AERC Oaks, Inc.,  its Manager

 

 

            By:      ________________________            Name:  Martin A. Fishman

           Title:    Vice  President

** **                                                                                                                                             |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | AERC DPF Georgia Ventures, LLC,  a Delaware limited liability company

            

By:      AERC of Georgia,  Inc.,             its Sole Member

 

 

            By:      ________________________            Name:  Martin A. Fishman

            Title:    Vice  President |

** **

                                                                          2D-13

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EXHIBIT A TOSUBSIDIARY GUARANTY

FORM OF JOINDER TOGUARANTY

THIS JOINDER is executed as of_________, 201_ 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 October __, 2010executed for the benefit of PNC Bank, National Association, as agent for itselfand certain other lenders, with respect to a loan from the Lenders toAssociated Estates Realty 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:                                                                               

 

 

                                                                          2D-14

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**EXHIBITE**

FORM OF OPINION OF BORROWER’S COUNSEL

October ___, 2010

 

PNC Bank, NationalAssociation, as Agent 

PNC Real Estate

1900 East Ninth Street - 22ndFloor

Mail Stop:  B7-YB13-22-1

Cleveland, OH  44114

 

 

Re:       $250,000,000Credit 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 $250,000,000 unsecuredrevolving credit facility, (the “Loan”), which Loan is being made pursuant tothat certain Amended and Restated Credit Agreement dated as of October ___,2010 (the “Credit Agreement”) among the Borrower, PNC Bank, NationalAssociation and the several lenders from time to time parties thereto(collectively, the “Lenders”), and PNC Bank, National Association, as AdministrativeAgent (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 amended and restated and new promissory notes payable to the Lenders,each dated as of the date of this Opinion, in the aggregate amount of$250,000,000. 

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

                                                                            2E-1

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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 andcharges paid or to be paid by or on behalf of Loan Parties in connection withsuch Loan pursuant to the applicable Loan Documents, is not in violation of theusury laws 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 ofOhio and applicable federal law and no opinion is expressed as to the laws ofany other jurisdiction.

                                                                            2E-2

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(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.

(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, no opinionis offered with respect any of the following matters: (a) turnover, automaticstay, avoiding power fraudulent transfer, preference, discharge, conversion ofa non-recourse obligation into a recourse claims, limitations on ipso facto andanti-assignment clauses; (b) judicially developed doctrines relating to theFederal Bankruptcy Code or similar state laws, such as substantiveconsolidation.

(g)  No opinion is expressed hereinas to any securities or “blue sky” laws, environmental laws, labor laws, FederalReserve Board margin regulations, tax laws, pension and employee benefit lawsand regulations, compliance with fiduciary duty requirements, antitrust andunfair competition laws and regulations, land use and subdivision laws andregulations, patent, copyright and trademark laws and regulations, racketeeringlaws and regulations, health and safety laws and regulations, laws, regulationsand policies concerning, national and local emergency, terrorism and criminaland 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 inequity or 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 whereinany 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.

                                                                            2E-3

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(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.

(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 anyFederal laws of the United States of America or any other nation or sovereignentity.

                                                                            2E-4

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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,

 

 

 

GreenbergTraurig, LLP

 

 

                                                                            2E-5

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Exhibit A

AERC Subsidiary Guarantors

 

 

 

 

                                                                            2E-6

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EXHIBIT F

 

LOAN REQUEST

 

___________, 201_

 

 

PNC Real Estate

1900 East Ninth Street - 22ndFloor

Mail Stop:  B7-YB13-22-1

Cleveland, OH  44114

Phone:  216-222-6032

Facsimile:  216-222-6070                    

Attention:   John E. Wilgus,II

                  Senior VicePresident

                  Real EstateBanking

 

**Loan Request**

 

Associated Estates RealtyCorporation (“Borrower”) hereby requests an Advance pursuant to Section 2.10of the Amended and Restated Credit Agreement, dated as of October __, 2010 (asamended or modified from time to time, the “Credit Agreement”), among Borrower,the Lenders referenced therein, and you, as an administrative agent for theLenders.

 

An Advance is requested to bemade in the amount of $__________, to be made on _____________.  Such Advanceshall be a [LIBOR] [Base] Rate Advance.  [The applicable Interest Period shallbe _____________.]  

** **

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

 

WiringInstructions:

(BankName)

(ABANo.)

(Beneficiary)

(AccountNo. to Credit)

(NotificationRequirement)

 

                                                                            F-1

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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:                                                                   

                                                                            F-2

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**EXHIBIT G**

 

**AMENDMENT TO CREDIT AGREEMENT**

This Amendment to the Credit Agreement described below(the “Amendment”) is made as of ________________, 201_, by and among Associated Estates Realty Corporation, PNC BankNational Association, individually and as “Administrative Agent”, andone or more New Lenders or Increasing Lenders shown on the signature pageshereof.

**RECITALS**

A.        Borrower,Administrative Agent and certain other Lenders have entered into an Amended andRestated Revolving Credit Agreement dated as of October __, 2010 (as amended,the “Credit Agreement”).  All capitalized terms used herein and not otherwisedefined shall have the meanings given to them in the Credit Agreement.

B.         Pursuant to theterms of the Credit Agreement, the Lenders initially agreed to provide Borrowerwith a revolving credit facility in an aggregate principal amount of up to$250,000,000.  The Borrower, the Administrative Agent and the Lenders nowdesire to amend the Credit Agreement in order to, among other things(i) increase the Aggregate Commitment to $____,000,000; (ii) increase theCommitments of the Increasing Lenders as shown below and (iii) admit **[nameof new banks]** as “New Lenders” under the Credit Agreement. 

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

**AGREEMENTS**

1.         The foregoing Recitals to this Amendment herebyare incorporated into and made part of this Amendment.

2.         From and after _______________, _____ (the“Effective Date”) (i) **[name of new banks]** shall beconsidered as “New Lenders” under the Credit Agreement and the Loan Documents,and (ii) **[name of existing lenders]** are “Increasing Lenders”and shall each be deemed to have increased its Commitment to the amount shownnext to their respective signatures on the signature pages of this Amendment,each having a Commitment in the amount shown next to their respectivesignatures on the signature pages of this Amendment.  The Borrower shall, on orbefore the Effective Date, execute and deliver to each of such New Lenders andIncreasing Lenders a new or amended and restated Note in the amount of suchCommitment .

3.         From and after the Effective Date, theAggregate Commitment shall equal              Million Dollars ($_____,000,000).

4.         For purposes of Section 14.1 of the CreditAgreement (Giving Notice), the address(es) and facsimile number(s) for the NewLendersshall be as specified below their respective signature(s) on thesignature pages of this Amendment.

                                                                           G-1

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5.         The Borrower hereby represents and warrantsthat, as of the Effective Date, there is no Event of Default or Potential Default,the representations and warranties contained in Article VI of theAgreement are true and correct as of such date, except to the extent any suchrepresentation or warranty is stated to relate solely to an earlier date, inwhich case such representation or warranty shall be true and correct as of suchearlier date and the Borrower has no offsets or claims against any of theLenders.

6.         As expressly modified as provided herein, theCredit Agreement shall continue in full force and effect.

7.         This Amendment may be executed in any number ofcounterparts, all of which taken together shall constitute one agreement, andany of the parties hereto may execute this Amendment by signing any suchcounterpart.

                                                                           G-2

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**            IN WITNESS WHEREOF**, the partieshave executed and delivered this Amendment as of the date first written above.
| ASSOCIATED ESTATES REALTY CORPORATION

 

 

By:                                                                   

Print Name:                                                      

Title:                                                                

 

 

  | PNC BANK, NATIONAL ASSOCIATION, Individually and as Administrative  Agent

 

 

By:                                                                                           

Print Name:                                                                              

Title:                                                                                        

 

  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Amountof Commitment:  $ ____________                **[NAME OF NEW LENDER]**

** **

By:_________________________________ 

PrintName:__________________________ 

Title:________________________________ 

 

**[Addressof New Lender]**

 

Attention:____________________________ 

Telephone:___________________________ 

Facsimile:____________________________ 

 

Amountof Commitment:  $ ____________                **[NAME OF INCREASING LENDER]**

** **

By:_________________________________ 

PrintName:__________________________ 

Title:________________________________ 

 

 

                                                                           G-3

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[1] Select asapplicable.

[2] Fill in theappropriate terminology for the types of facilities under the Credit Agreementthat are being assigned under this Assignment (e.g. “Revolving CreditCommitment,” “Term Loan Commitment,” etc.)

* Amount to beadjusted by the counterparties to take into account any payments or prepaymentsmade between the Trade Date and the Effective Date.

[3] Set forth, to atleast 10 decimals, as a percentage of the Commitment/Loans of all Lendersthereunder.

[4] To be completedif the Assignor and the Assignee intend that the minimum assignment amount isto be determined as of the Trade Date.

[5] To be added onlyif the consent of the Administrative Agent is required by the terms of theCredit Agreement.

[6] To be added onlyif the consent of the Borrower and/or other parties (e.g. Swing 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 “Foreign Lender” should be conformed to the section in the Credit Agreementgoverning withholding taxes and gross-up.

[10] TheAdministrative Agent should consider whether this method conforms to itssystems.  In some circumstances, the following alternative language may beappropriate:  “From and after the Effective Date, the Administrative Agentshall make all payments in respect of the Assigned Interest (including paymentsof principal, interest, fees and other amounts) to the Assignee whether suchamounts have accrued prior to**,** on or after the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments inpayments by the Administrative Agent for periods prior to the Effective Date orwith respect to the making of this assignment directly between themselves.”