Document:

term loan agreement

                                                          
Exhibit 4.1

 

 

 

 

 

TERM LOAN AGREEMENT 

DATED AS OF JUNE 3, 2011

 

AMONG

 

ASSOCIATED ESTATES REALTY
CORPORATION,

AS BORROWER

 

AND

 

PNC BANK, NATIONAL ASSOCIATION

AS ADMINISTRATIVE AGENT

 

AND

 

PNC CAPITAL MARKETS, LLC, AS
LEAD ARRANGER

AND

 

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

 

AND

 

U.S. BANK NATIONAL ASSOCIATION, 

AS DOCUMENTATION AGENT

 

AND

 

THE SEVERAL LENDERS

FROM TIME TO TIME PARTIES HERETO,

AS LENDERS

 

 

 

 

 

 

TABLE OF CONTENTS

 

Page

ARTICLE I DEFINITIONS. 1

1.1      Definitions. 1

1.2      Construction. 20

1.3      Accounting Principles. 20

ARTICLE II
THE CREDIT. 21

2.1      Generally. 21

2.2      Interest Rate Options. 21

2.3      Fees. 21

2.4      Usury. 21

2.5      Minimum Amount of Each Advance. 22

2.6      Principal Payments; Optional Prepayments. 22

2.7      Conversion and Continuation of Outstanding Advances. 22

2.8      Changes in Interest Rate, Etc. 23

2.9      Rates Applicable After Event of Default 23

2.10    Method of Payment 23

2.11    Notes; Telephonic Notices. 23

2.12    Interest Payment Dates; Interest and Fee Basis. 24

2.13    Notification of Advances, Interest Rates and Prepayments. 24

2.14    Presumptions by Administrative Agent 24

2.15    Replacement of a Lender 24

ARTICLE III
UNENCUMBERED POOL PROPERTIES. 25

3.1      Eligibility of Projects. 25

3.2      Conditions Precedent to a Project Becoming a Qualifying
Unencumbered Project 26

3.3      Release of Subsidiary Guarantors and Qualifying Unencumbered
Projects. 26

ARTICLE IV
INCREASED COSTS. 27

4.1      Increased Costs Generally. 27

4.2      Taxes. 28

4.3      Indemnity. 29

4.4      LIBOR Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available. 30

4.5      Administrative Agent’s and Lender’s Rights. 30

ARTICLE V
CONDITIONS PRECEDENT. 31

5.1      Initial Advance. 31

5.2      General Conditions. 32

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ARTICLE VI
REPRESENTATIONS AND WARRANTIES. 33

6.1      Existence. 33

6.2      Authorization and Validity. 33

6.3      No Conflict; Government Consent 33

6.4      Financial Statements; Material Adverse Effect 33

6.5      Taxes. 33

6.6      Litigation and Guarantee Obligations. 34

6.7      Subsidiaries. 34

6.8      ERISA.. 34

6.9      Accuracy of Information. 34

6.10    Regulation U.. 34

6.11    Material Agreements. 34

6.12    Compliance With Laws. 34

6.13    Ownership of Projects. 35

6.14    Investment Company Act 35

6.15    Solvency. 35

6.16    Insurance. 35

6.17    REIT and Listing Status. 35

6.18    Title to Property. 35

6.19    Environmental Matters. 36

6.20    Office of Foreign Asset Control 36

6.21    Subsidiary Guaranty. 37

6.22    Intellectual Property. 37

ARTICLE VII
COVENANTS. 37

7.1      Financial Reporting. 37

7.2      Use of Proceeds. 38

7.3      Notice of Default 39

7.4      Conduct of Business. 39

7.5      Taxes. 39

7.6      Insurance. 39

7.7      Compliance with Laws. 39

7.8      Maintenance of Properties and Equipment 39

7.9      Inspection. 39

7.10    Maintenance of Status. 39

7.11    Dividends. 40

7.12    No Change in Control 40

7.13    Non-Real Estate Investments. 40

7.14    Merger; Sale of Assets. 40

7.15    Acquisitions and Investments. 40

7.16    Liens. 41

7.17    Affiliates. 41

7.18    Recourse Secured Indebtedness. 41

7.19    Minimum Consolidated Tangible Net Worth. 41

7.20    Indebtedness and Cash Flow Covenants. 41

7.21    Environmental Matters. 42

7.22    Permitted Investments. 43

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7.23    Additional Unsecured Indebtedness. 43

7.24    Limits on Ownership Encumbrances. 43

ARTICLE VIII
events of DEFAULT. 44

ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES. 45

9.1      Acceleration. 45

9.2      Amendments. 46

9.3      Preservation of Rights. 46

9.4      Insolvency of Borrower 47

ARTICLE X
GENERAL PROVISIONS. 47

10.1    Survival of Representations. 47

10.2    Governmental Regulation. 47

10.3    No Plan Assets. 47

10.4    Headings. 47

10.5    Entire Agreement 47

10.6    Several Obligations; Benefits of this Agreement 47

10.7    Expenses; Indemnification. 47

10.8    Electronic Document Deliveries. 48

10.9    Accounting. 48

10.10  Severability of Provisions. 48

10.11  Nonliability of Lenders. 49

10.12  CHOICE OF LAW... 49

10.13  SUBMISSION TO JURISDICTION.. 49

10.14  WAIVER OF VENUE. 49

10.15  SERVICE OF PROCESS. 49

10.16  WAIVER OF JURY TRIAL. 50

ARTICLE XI
THE ADMINISTRATIVE AGENT. 50

11.1    Appointment and Authority. 50

11.2    Rights as a Lender 50

11.3    Exculpatory Provisions. 50

11.4    Reliance by Administrative Agent 51

11.5    Delegation of Duties. 51

11.6    Resignation of Administrative Agent 51

11.7    Non-Reliance on Administrative Agent and Other Lenders. 52

11.8    No Other Duties, etc. 52

11.9    No Reliance on Administrative Agent’s Customer Identification
Program.. 52

11.10  Requests for Approval 53

11.11  Defaulting Lenders. 53

ARTICLE XII
SETOFF; RATABLE PAYMENTS. 53

12.1    Setoff. 53

12.2    Ratable Payments. 54

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ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS. 54

13.1    Successors and Assigns Generally. 54

13.2    Assignments by Lenders. 55

13.3    Register 56

13.4    Participations. 56

13.5    Limitations upon Participant Rights Successors and Assigns
Generally. 57

13.6    Certain Pledges; Successors and Assigns Generally. 57

13.7    Confidentiality. 57

ARTICLE XIV
NOTICES. 58

14.1    Giving Notice. 58

14.2    Change of Address. 58

ARTICLE XV
PATRIOT ACT. 58

ARTICLE XVI
COUNTERPARTS. 58

 

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 OPINION OF BORROWER’S COUNSEL

  
	
  EXHIBIT F

  	
  FORM OF AMENDMENT TO TERM LOAN AGREEMENT

  
	
  EXHIBIT G

  	
  FORM OF LOAN REQUEST

  
	
  SCHEDULE 3.1

  	
  INITIAL QUALIFYING UNENCUMBERED PROJECTS AND SUBSIDIARY GUARANTORS

  
	
  SCHEDULE 6.6

  	
  LITIGATION

  
	
  SCHEDULE 6.7

  	
  SUBSIDIARIES OF BORROWER

  
	
  SCHEDULE 6.13

  	
  EXCEPTIONS, IF ANY, TO OWNERSHIP FREE OF UNPERMITTED LIENS

  
	
  SCHEDULE 6.19

  	
  ENVIRONMENTAL MATTERS

  

 

 

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TERM LOAN
AGREEMENT

This Term Loan
Agreement, dated as of June 3, 2011, is among Associated Estates Realty
Corporation (the “Borrower”), PNC Bank, National Association, and the
several banks, financial institutions and other entities from time to time
parties to this Agreement (collectively, the “Lenders”), and PNC Bank,
National Association, not individually, but as “Agent” or “Administrative
Agent”.

RECITALS

WHEREAS, the Borrower is
primarily engaged in the business of purchasing, owning, operating, developing
and managing apartment communities.

WHEREAS, the Borrower has
requested and the Lenders have agreed to provide certain Loans to Borrower that
shall be used (i) to refinance certain existing indebtedness, and (ii) for the
general corporate purposes of the Borrower.  

NOW, THEREFORE,
in consideration of the mutual covenants and agreements herein contained, the
parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1             
Definitions

.  Capitalized terms
used herein, but not otherwise defined, shall have the meanings ascribed to
them in the Revolving Credit Agreement.  As used in this Agreement:

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

“Adjusted Funds
From Operations” shall mean Funds From Operations, as adjusted for impairments
and other non-cash charges and without any reduction  for Defeasance Costs.

“Administrative
Agent” means PNC Bank, National Association in its capacity as agent for the
Lenders pursuant to Article XI, and not in its individual capacity as a
Lender, and any successor Administrative Agent appointed pursuant to Article
XI.

“Advance” means
any portion of the amounts advanced to Borrower hereunder consisting of the
aggregate amount of the several Loans made by one or more of the Lenders to the
Borrower of the same Type and, in the case of LIBOR Rate Advances, for the same
Interest Period.

“Affiliate” as to any
Person shall mean any other Person (i) which directly or indirectly controls,
is controlled by, or is under common control with such Person, or (ii) which
beneficially owns or holds 5% or more of 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 which is beneficially owned or held,
directly or indirectly, by such Person.  

 

 

 

 

 

 

 

“Aggregate
Commitment” means, as of any date, the aggregate of the then-current
Commitments of all the Lenders, which is, as of the Agreement Execution Date,
$125,000,000.

“Agreement”
means this Term Loan Agreement, as it may be amended or modified and in effect
from time to time.

“Agreement
Execution Date” means the date this Agreement has been fully executed and
delivered by all parties hereto.

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

“Applicable Margin” means an annual
percentage to be used in calculating the interest rate applicable to the
various Types of Advances which shall vary from time to time with the Leverage
Ratio as follows:

 

	
   

  Leverage Ratio

  	
   

  LIBOR Applicable Margin

  	
  

  Base Rate Applicable Margin

  
	
   

  	
   

  	
   

  
	
  Less than 45%

  	
  1.80%

  	
  0.80%

  
	
  Greater than or equal to
  45%, but less than 50%

  	
  2.05%

  	
  1.05%

  
	
  Greater than or equal to
  50% but less than or equal to 55%

  	
  2.30%

  	
  1.30%

  
	
  Greater than 55% but less
  than or equal to 60%

  	
  2.55%

  	
  1.55%

  

 

As of the
Agreement Execution Date, based on the Leverage Ratio shown on the Compliance
Certificate delivered to the Administrative Agent by Borrower pursuant to Section
5.1(k), the LIBOR Applicable Margin is 1.80% and the Base Rate Applicable
Margin is 0.80%. The percentages set
forth above shall be changed from time to time in accordance with the Leverage
Ratio of the last day of the most recent preceding fiscal quarter for which
financial results have been reported, which percentage shall be effective on
the first day of the calendar month following the date on which Administrative
Agent receives a Compliance Certificate as required by Section 7.1(c)
from the Borrower as of the end of such fiscal quarter in the form attached
hereto as Exhibit B, beginning with the Compliance Certificate for the
fiscal quarter ending June 30, 2011.  If any such Compliance Certificate shall
later be determined to be incorrect and as a result a higher Applicable Margin
should have been in effect for any period, Borrower shall pay to the
Administrative Agent for the benefit of the Lenders all additional interest
which would have accrued if the original Compliance Certificate had been
correct, as shown on an invoice to be prepared by the Administrative Agent and
delivered to Borrower, on the next Payment Date following delivery of such
invoice.

“Article” means
an article of this Agreement unless another document is specifically
referenced.

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“Authorized
Officer” means any of the President and Chief Executive Officer, Vice President
and General Counsel, and  Vice President and Chief Financial Officer, of
Borrower, acting singly,  or such other
individuals, designated by written notice to the Administrative Agent from the
Borrower, authorized to execute notices, reports and other documents on behalf
of the Loan Parties required hereunder.  The Borrower may amend such list of
individuals from time to time by giving written notice of such amendment to the
Administrative Agent.

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

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

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

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

“Base Rate
Option” shall mean the option of the Borrower to have Advances bear interest at
the rate and under the terms set forth in Section 2.2.

“Borrower”
means Associated Estates Realty Corporation, a corporation organized under the
laws of the State of Ohio, and its successors and assigns.

“Borrowing
Date” means the date on which the initial Advance is made hereunder.

“Borrowing Tranche” shall
mean specified portions of Advances outstanding as follows:  (i) any Advances
to which a LIBOR Rate Option applies which become subject to the same Interest
Rate Option and which have the same Interest Period shall constitute one
Borrowing Tranche, and (ii) all Advances to which a Base Rate Option applies
shall constitute one Borrowing Tranche.

“Business Day” means (i)
with respect to any borrowing, payment or rate selection of LIBOR Rate
Advances, a day (other than a Saturday or Sunday) on which banks generally are
open in Cleveland, Ohio and New York, New York for the conduct of substantially
all of their commercial lending activities and on which dealings in United
States dollars are carried on in the London interbank market and (ii) for all
other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Cleveland, Ohio and New York, New York for the conduct of
substantially all of their commercial lending activities.

“Capital Stock”
means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent
ownership interests in a Person which is not a corporation and any and all
warrants or options to purchase any of the foregoing.

“Capitalization
Rate” means seven and one quarter percent (7.25%).

“Capitalized
Lease” of a Person means any lease of Property imposing obligations on such
Person, as lessee thereunder, which are required in accordance with GAAP to be
capitalized on a balance sheet of such Person.

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

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“Cash
Equivalents”  means, as of any date:

(i)         securities issued or directly
and fully guaranteed or insured by the United States Government or any agency
or instrumentality thereof having maturities of not more than one year from
such date;

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

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

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

(v)        bonds or other obligations
having a short term unsecured debt rating of not less than A-1+ by S&P and
P-1+ by Moody’s and having a long term debt rating of not less than A1 by
Moody’s issued by or by authority of any state of the United States, any
territory or possession of the United 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 rated not less than A-1+ by S&P, and not less than P-1 by Moody’s
which are secured 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 the repurchase agreement is entered into;

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

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

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“Change in
Control” means the occurrence of any of the following:  (i) the Board of
Directors or shareholders of Borrower approve a consolidation or merger in
which Borrower is not the surviving corporation, the sale of all or
substantially all of the assets of Borrower, or the liquidation or dissolution
of Borrower; (ii) any Person or group of Persons which are Affiliates of each
other (other than Borrower 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 as trustee)) purchases any Capital Stock of Borrower (or
securities convertible into Capital Stock) pursuant to a tender or exchange
offer without the prior consent of the Board of Directors of Borrower, or
becomes the beneficial owner of Capital Stock of Borrower (or securities
convertible into Capital Stock), in either case, representing 51%  or
more of the voting power of Borrower’s outstanding Capital Stock. 

“Change in Law” shall mean
the occurrence, after the date of this Agreement, of any of the following: (a)
the adoption or taking effect of any Law, (b) any change in any Law or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of Law) by any Governmental Authority. 
Notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines and
directives promulgated thereunder shall be deemed to be a “Change in Law”,
regardless of the date enacted or adopted.  

“Code” means
the Internal Revenue Code of 1986, as amended, reformed or otherwise modified
from time to time.

“Commitment” means, for
each Lender, the obligation of such Lender to make Loans not exceeding the
amount set forth opposite its signature below or as set forth in any Notice of
Assignment relating to any assignment that has become effective pursuant to Section 13.3.2,
as such amount may be modified from time to time pursuant to the terms hereof.

“Compliance Certificate” is
defined in Section 7.1(c).

“Consolidated Adjusted
EBITDA” shall mean, as of the date of calculation,
(a) an annualized amount determined by taking the Consolidated Net Income for
the twelve (12) most recent months for which financial results have been
reported, as adjusted by adding or deducting for, as applicable, Defeasance
Costs, gains or losses from sales of assets, impairment and other non-cash
charges, other extraordinary items, interest expense, income taxes, depreciation
expense and amortization expense, plus (b) the Consolidated Group percentage of
the net income (or loss) for such period of the Investment Affiliates as
determined in accordance with GAAP and as adjusted in the same manner as
Consolidated Net Income under clause (a) of this sentence.

“Consolidated
Debt Service” means, for any period, without duplication, (a) Consolidated
Interest Expense for such period plus (b) the aggregate amount of
scheduled principal payments attributable to Consolidated Outstanding
Indebtedness (excluding optional prepayments and balloon principal payments at
maturity in respect of any such Indebtedness) required to be made during such
period by any member of the Consolidated Group plus (c) a
percentage of all such scheduled principal payments required to be made during
such period by any Investment Affiliate on Indebtedness taken into account in
calculating Consolidated Interest Expense, equal to the greater of (x) the
percentage of the principal amount of such Indebtedness for which any member of
the Consolidated Group is liable and (y) the Consolidated Group Pro Rata
Share of such Investment Affiliate.

“Consolidated Fixed
Charges” shall mean, for any period without duplication, the sum of (i)
Consolidated Debt Service for such period, plus (ii) all Preferred Dividends
payable by Borrower or any other member of the Consolidated Group with respect
to such period.  

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“Consolidated
Group” shall mean the Borrower and all Subsidiaries which are consolidated with
them for financial reporting purposes under GAAP.

“Consolidated
Group Pro Rata Share” shall mean, with respect to any Investment Affiliate, the
percentage of the total equity ownership interests held by the Consolidated
Group, in the aggregate, in such Investment Affiliate determined by calculating
the percentage of the issued and outstanding stock, partnership interests or
membership interests in such Investment Affiliate held by the Consolidated
Group in the aggregate.

“Consolidated
Interest Expense” means, for any period without duplication, the sum of
(a) the amount of interest expense, determined in accordance with GAAP, of
the Consolidated Group for such period attributable to Consolidated Outstanding
Indebtedness during such period, excluding any interest expense on the Consolidated
Group’s Secured Indebtedness attributable to Defeasance Costs or non-cash
charges which have been added back to Consolidated Adjusted EBITDA pursuant to
the definition thereof, plus (b) the applicable Consolidated Group Pro
Rata Share of any such interest expense, determined in accordance with GAAP, of
each Investment Affiliate, for such period, on Indebtedness of such Investment
Affiliate, whether recourse or non-recourse, similarly excluding any interest
expense attributable to Defeasance Costs or non-cash charges of such Investment
Affiliate which has been added back to net income of such Investment Affiliate
in calculating Consolidated Adjusted EBITDA.

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

“Consolidated
Outstanding Indebtedness” means, as of any date of determination, without
duplication, the sum of (a) all Indebtedness of the Consolidated Group
outstanding at such date, determined on a consolidated basis in accordance with
GAAP (whether recourse or non-recourse) plus (b) the applicable
Consolidated Group Pro Rata Share of any Indebtedness of each Investment
Affiliate other than Indebtedness of such Investment Affiliate to a member of
the Consolidated Group.

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

“Consolidated
Unsecured Indebtedness” means, as of any date of determination, that portion of
Consolidated Outstanding Indebtedness that is not Secured Indebtedness or
Subordinated Debt.

“Conversion/Continuation
Notice” is defined in Section 2.7.

“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 instruments that may be settled in cash upon
conversion, and requires that the accounting treatment of such instruments be
modified to (i) bifurcate the instrument into an indebtedness and an equity
component, (ii) value each component of the instrument separately, and (iii)
recognize interest expense on the indebtedness component at a rate similar to a
liability instrument that does not have an equity component (which effectively
represents a non-cash adjustment to interest expense in excess of the stated
interest rate on the instrument).

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

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“Default Rate”
means the interest rate which may apply during the continuance of an Event of
Default pursuant to Section 2.9 which shall mean that (i) each LIBOR Rate Advance shall bear interest for
the remainder of the applicable Interest Period at the LIBOR Rate Option
otherwise applicable to such Interest Period plus 4% per annum and (ii) each
Base Rate Advance shall bear interest at a rate per annum equal to the Base
Rate Option otherwise applicable to the Base Rate Advance plus 4% per annum.

“Defaulting Lender” shall
mean any Lender that (a) has failed to fund any portion of the Advances
required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder unless such failure has been cured and
all interest accruing as a result of such failure has been fully paid in
accordance with the terms hereof, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid
by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute or unless such failure has been cured and all
interest accruing as a result 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 12.2 with respect to purchasing participations from the other
Lenders, whereby such Lender’s share of any payment received, whether by setoff
or otherwise, is in excess of its Ratable Share of such payments due and
payable to all of the Lenders, or (d) has since the date of this Agreement been
deemed insolvent by a Governmental Authority or become the subject of a
bankruptcy, receivership, conservatorship or insolvency proceeding, or has a
parent company that since the date of this Agreement been deemed insolvent by a
Governmental Authority or become the subject of a bankruptcy, receivership,
conservatorship or insolvency proceeding.

“Defeasance
Costs” means expenses incurred in the
defeasance or prepayment of secured indebtedness including, but not limited
to:  prepaid interest, yield maintenance or other prepayment premiums, legal,
accounting and consulting fees directly attributable to the defeasance of debt;
the write‐off of deferred financing fees; servicer processing fees;
custodial account fees; rating agency fees; and the computed defeasance
premium. 

- 7 -

 

 

“Eligible Unencumbered
Project” means a Project which satisfies all of the following requirements: 
(a) such Project is located in the continental United States; (b) such Project
is an institutional grade multifamily property as determined by the Agent in
its reasonable discretion; (c) such Project is owned in fee simple or leased
under a Ground Lease containing provisions allowing leasehold mortgage
financing of such lease on terms reasonably acceptable to Administrative Agent
(provided that the aggregate amount added to Unencumbered Real Property Value
on account of Projects subject to such Ground Leases shall not exceed twenty
percent (20%)) entirely by Borrower or a Wholly Owned Subsidiary which is also
a Subsidiary Guarantor; (d) with respect to any Project other than the initial
Qualifying Unencumbered Projects shown on Schedule 3.1, such Project is
a “market rate” Project which is not subject to any restrictions requiring
apartment units to be leased at 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 such Project or (ii) cause more than ten
percent (10%) of the total residential units in all of the then-current
Eligible Unencumbered Projects to be subject to such rent restrictions; (e)
neither such Project nor any interest of the Borrower or any Subsidiary
therein, 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 a Negative
Pledge; (f) if such Property is owned or leased by a Subsidiary Guarantor (i)
none of Borrower’s direct or indirect 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 in
Section 7.16 of this Agreement)) or to a Negative Pledge; and (ii) Borrower
directly, or indirectly through a Subsidiary, has the right to take the
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 a Lien on
such Project as security for Indebtedness of the Borrower or such Subsidiary
Guarantor, as applicable; (g) such Project has been completed and is free 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 which
are not material to the profitable operation of such Project;  and (h) as of
the date such Project first becomes an Eligible Unencumbered Project, at least
75% of the residential units within such Project are subject to third party
occupancy leases.

“Environmental
Laws” includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations promulgated pursuant thereto, and any
state or local statutes, ordinances, rules, regulations and the like addressing
similar issues:  the Comprehensive Environmental Response, Compensation and
Liability Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource Conservation and Recovery
Act (including but not limited to Subtitle I relating to underground storage
tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational
Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation Act.

“Equity Issuance” means any
issuance by a Person of any Capital Stock in such Person and shall in any event
include the issuance of any Capital Stock upon the conversion or exchange of
any security constituting Indebtedness that is convertible or exchangeable, or
is being converted or exchanged, for Capital Stock.

“ERISA”
means the Employee Retirement Income Security Act of 1974, as the same may be
amended or supplemented 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 or business (whether or not incorporated) under
common control with the Borrower and are treated as a single employer under
Section 414 of the Code.

“ERISA Event shall mean (a)
a reportable event (under Section 4043 of ERISA and regulations thereunder)
with respect to a Pension Plan; (b) a withdrawal by Borrower or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal
under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by
Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that
a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under Sections
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Borrower
or any ERISA Affiliate.

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

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

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“Excluded Taxes” shall
mean, with respect to the Administrative Agent, any Lender, or any other
recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (c) in the case of a Foreign Lender, any withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new lending office) or
is attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 4.2, except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 4.2.

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

“Facility Termination Date” shall mean June 2, 2016,
which shall be the day immediately prior to the fifth (5th ) anniversary of the
Agreement Execution Date, or if such day is not a Business Day the last
Business Day immediately preceding such day.

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

“Federal Funds Open Rate”
for any day shall mean the rate per annum (based on a year of 360 days and
actual days elapsed) which is the daily federal funds open rate as quoted by
ICAP North America, Inc. (or any successor) as set forth on the Bloomberg
Screen BTMM for that day opposite the caption “OPEN” (or on such other
substitute Bloomberg Screen that displays such rate), or as set forth on such
other recognized electronic source used for the purpose of displaying such rate
as selected by the Administrative Agent (for purposes of this definition, an “Alternate
Source”) (or if such rate for such day does not appear on the Bloomberg
Screen BTMM (or any substitute screen) or on any Alternate Source, or if there
shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or
any substitute screen) or any Alternate Source, a comparable replacement rate
determined by the Administrative Agent at such time (which determination shall
be conclusive absent manifest error); provided however, that if such day is not
a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate
on the immediately preceding Business Day.  If and when the Federal Funds Open
Rate changes, the rate of interest with respect to any Advance to which the
Federal Funds Open Rate applies will change automatically without notice to the
Borrower, effective on the date of any such change.

“Fee Letter” is
defined in Section 2.3.

“Financial
Contract” of a Person means (i) any exchange - traded or over-the-counter
futures, forward, swap or option contract or other financial instrument with
similar characteristics, or (ii) any Interest Rate Hedge.

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“Financial
Undertaking” of a Person means (i) any transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the consolidated balance sheet of such Person, or (ii) any
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party’s assets, liabilities or exchange
transactions, including, but not limited to, interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options.

“First Mortgage
Receivable” means any Indebtedness owing to a member of the Consolidated Group
which is secured 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, an
Investment Affiliate or an unrelated third party) having a value in excess of
the amount of such Indebtedness and which has been designated by the Borrower
as a “First Mortgage Receivable” in its most recent compliance certificate. 

“Foreign Lender” shall mean
any Lender that is organized under the Laws of a jurisdiction other than that
in which the Borrower is resident for tax purposes.  For purposes of this
definition, the United States of America, each State thereof and the District
of Columbia shall be deemed to constitute a single jurisdiction.

“Funds From Operations”
shall have the meaning determined from time to time by the National Association
of Real Estate Investment Trusts to be the meaning most commonly used by its
members and for avoidance of doubt shall mean “basic” Funds From Operations, as
such term is customarily used by members of such association.

“GAAP” means
generally accepted accounting principles in
the United States of America, as are in effect from
time to time, applied in a manner consistent with that used in preparing
the financial statements hereunder and in all circumstances subject to the provisions of Section 1.3.

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

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“Guarantee
Obligation” means, as to any Person (the “guaranteeing person”), any
obligation (determined without duplication) of (a) the guaranteeing person
or (b) another Person to induce the creation of which the guaranteeing
person has issued a reimbursement, counter-indemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness, leases, or
dividends (the “primary obligations”) of any other third Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however,
that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business, or any
indemnification obligations arising in the ordinary course of business,
including without limitation guaranties of non-recourse “carve-out” exceptions
in secured loans and environmental indemnity agreements in favor of secured
lenders.  The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the maximum stated amount of the primary obligation
relating to such Guarantee Obligation (or, if less, the maximum stated
liability set forth in the instrument embodying such Guarantee Obligation), provided,
that in the absence of any such stated amount or stated liability, the amount
of such Guarantee Obligation shall be such guaranteeing person’s maximum
reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

“Indebtedness”
of any Person at any date means without duplication, (a) all indebtedness
of such Person for borrowed money including without limitation any repurchase
obligation or liability of such Person with respect to securities, accounts or
notes receivable sold by such Person, (b) all obligations of such Person
for the deferred purchase price of property or services (other than current
accounts payable and trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), to the extent
such obligations constitute indebtedness for the purposes of GAAP, (c) any
other indebtedness of such Person which is evidenced by a note, bond, debenture
or similar instrument, including any so-called “trust deferred debt”
(d) all Capitalized Lease Obligations, (e) all obligations of such Person
in respect of acceptances issued or created for the account of such Person,
(f) all Guarantee Obligations of such Person (excluding in any calculation
of consolidated Indebtedness of the Consolidated Group, Guarantee Obligations
of one member of the Consolidated Group in respect of primary obligations of
any other member of the Consolidated Group), (g) all reimbursement obligations
of such Person for letters of credit and, to the extent such obligations
constitute “contingent liabilities” which are required to be accrued under
GAAP, other contingent liabilities, (h) any Net Mark-to-Market Exposure
and (i) all liabilities secured by any lien (other than liens for taxes not yet
due and payable) on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof.

“Indemnified Taxes” shall
mean Taxes other than Excluded Taxes.

“Interest
Period” shall mean the period of time
selected by the Borrower in connection with (and to apply to) any election
permitted hereunder by the Borrower to have Advances  bear interest under the
LIBOR Rate Option.  Subject to the last sentence of this definition, such
period shall be one, two, three or six Months. Such Interest Period shall
commence on the effective date of such LIBOR Rate Option, which shall be the
date of renewal of or conversion to the LIBOR Rate Option if the Borrower is
renewing or converting to the LIBOR Rate Option applicable to outstanding
Loans.  Notwithstanding the second sentence hereof: (A) any Interest Period
which would otherwise end on a date which is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
the next calendar month, in which case such Interest Period shall end on 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 would end after
the Facility Termination Date.

“Interest Rate Hedge” shall
mean an interest rate exchange, collar, cap, swap, adjustable strike cap,
adjustable strike corridor or similar agreements entered into by the Loan
Parties or their Subsidiaries in order to provide protection to, or minimize
the impact upon, the Borrower, the Guarantor and/or their Subsidiaries of
increasing floating rates of interest applicable to Indebtedness.

“Interest Rate Option”
shall mean any LIBOR Rate Option or Base Rate Option.

“Investment” of
a Person means any loan, advance (other than commission, travel and similar
advances to officers and employees made in the ordinary course of business),
extension of credit (other than accounts receivable arising in the ordinary
course of business on terms customary in the trade), deposit account or
contribution of capital by such Person to any other Person or any investment
in, or purchase or other acquisition of, the stock, partnership interests,
notes, debentures or other securities of any other Person made by such Person.

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“Investment
Affiliate” means any Person in which the Consolidated Group, directly or
indirectly, has any ownership interest, whose financial results are not
consolidated under GAAP with the financial results of the Consolidated Group.  For the purposes of this Agreement, The Residences at
Carronade, LLC, an Ohio limited liability company, shall not be deemed to be an
“Investment Affiliate” of the Borrower. 

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

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

“Lenders” means
the lending institutions listed on the signature pages of this Agreement, their
respective successors and assigns, any other lending institutions that
subsequently become parties to this Agreement.

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

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

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

                                        London interbank offered rates
quoted by Bloomberg

            LIBOR Rate  =     or appropriate successor as shown on
Bloomberg Page BBAM1

                                        1.00 -  LIBOR Reserve Percentage

 

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The LIBOR Rate shall be
adjusted with respect to any Loan to which the LIBOR Rate Option applies that
is outstanding on the effective date 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 LIBOR Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error.

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

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

“LIBOR Rate Option” shall
mean the option of the Borrower to have Advances bear interest at the rate and
under the terms set forth in Section 2.2.

“LIBOR Reserve Percentage”
shall mean as of any day the maximum percentage in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as “Eurocurrency Liabilities”).

“Lien” means
any lien (statutory or other), mortgage, pledge, negative pledge,
hypothecation, assignment, deposit arrangement, encumbrance or priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).

“Loan” means,
with respect to any Lender, an extension
of credit by such Lender to the Borrower pursuant to the terms of Article II. 

“Loan Documents”
means this Agreement, the Notes, the Subsidiary Guaranty, and any other
document from time to time evidencing or securing indebtedness incurred by the
Borrower under this Agreement, as any of the foregoing may be amended or
modified from time to time.

“Loan Parties”
means the Borrower and the Subsidiary Guarantors.

“Material
Adverse Effect” means, in the Administrative Agent’s reasonable discretion, any
event that is reasonably anticipated to have a material adverse effect on (i)
the business, property or condition (financial or otherwise) of the
Consolidated Group (taken as a whole), (ii) the ability of the Borrower to
perform its obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents.

“Materials of
Environmental Concern” means any gasoline or petroleum (including crude oil or
any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes, defined or regulated as such in or under any
Environmental Law, including, without limitation, asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation, but excluding substances of kinds
and amounts ordinarily used or stored in similar properties for the purposes of
cleaning or other maintenance or operations or as inventory of tenants and
otherwise in compliance with all Environmental Laws.

“Maximum Legal
Rate” means the maximum nonusurious interest rate, if any, that at any time or
from time to time may be contracted for, taken, reserved, charged or received
on the indebtedness evidenced by the Notes and as provided for herein or in the
Notes or other Loan Documents, under the laws of such state or states whose
laws are held by any court of competent jurisdiction to govern the interest
rate provisions hereof.

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

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

“Multiemployer Plan” shall
mean any employee benefit plan which is a “multiemployer plan” within the
meaning of Section 4001(a)(3) of ERISA and to which the Borrower or any member
of the ERISA Group is then making or accruing an obligation to make
contributions or, within the preceding five Plan years, has made or had an
obligation to make such contributions.

“Net
Mark-to-Market Exposure” of a Person means, as of any date of determination,
the excess (if any) of all unrealized losses over all unrealized profits of
such Person arising from Interest Rate Hedges or any other Financial Contract. 
“Unrealized losses” means the fair market value of the cost to such Person of
replacing such Interest Rate Hedge or other Financial Contract as of the date
of determination (assuming the Interest Rate Hedge or other Financial Contract
were to be terminated as of that date), and “unrealized profits” means the fair
market value of the gain to such Person of replacing such Interest Rate Hedge
or other Financial Contract as of the date of determination (assuming such
Interest Rate Hedge 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 minus the amount of all expenses (as determined in
accordance with GAAP) incurred in connection with and directly attributable to
the ownership and operation of such Project for such period, including, without
limitation, Management Fees and amounts accrued for the payment of real estate
taxes and insurance premiums, but excluding any general and administrative
expenses related to the operation of the Borrower or the other members of the
Consolidated Group, any interest expense or other debt service charges and any
non-cash charges such as depreciation or amortization of financing costs.  As
used herein “Management Fees”, means, with respect to each Project for
any period, an amount equal to two and one-half percent (2.5%) per annum on the
aggregate rent due and payable under leases at such Project.

“Net Proceeds” means with respect to any Equity
Issuance by a Person, the aggregate amount of all cash and the fair market
value of all other Property (other than securities of such Person being
converted or exchanged in connection with such Equity Issuance) received by
such Person in respect of such Equity Issuance net of investment banking fees,
legal fees, accountants’ fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred by such Person in connection with
such Equity Issuance.

“Non-Consenting Lender”
shall have the meaning specified in Section 9.2.

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

“Note” means a
promissory note, in substantially the form of Exhibit A hereto, duly
executed by Borrower and payable to the order of a Lender in the amount of its
Commitment, including any amendment, modification, renewal or replacement of
such promissory note.

“Notice of
Assignment” is defined in Section 13.3.2.

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“Obligation” shall mean any
obligation or liability of any of the Loan Parties, howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due, under or in connection with (i)
this Agreement, the Notes, the Administrative Agent’s Letter or any other Loan
Document whether to the Administrative Agent, any of the Lenders or their
Affiliates or other persons provided for under such Loan Documents and (ii) any
Lender Provided Interest Rate Hedge.

“Other Taxes” shall mean all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or under any other Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.

“Participants”
is defined in Section 13.4.

“Payment Date”
means, (i) with respect to the payment of interest accrued on any LIBOR Rate
Advance ninety (90) or less days in term, the maturity date of any such
Advance, 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 Rate
Advance, the first Business Day of each April, July, October and January.

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

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

“Permitted
Acquisitions” are defined in Section 7.15.

“Permitted
Liens” are defined in Section 7.16.

“Person” means
any natural person, corporation, firm, joint venture, partnership, association,
enterprise, trust or other entity or organization, or any government or
political subdivision or any agency, department or instrumentality thereof.

“Plan” shall mean at any time an employee pension benefit
plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which
is covered by Title IV of ERISA or is subject to 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 of the ERISA Group or (ii) has at any
time within the preceding five years been maintained by any entity which was at
such time a member of the ERISA Group for employees of any entity which was at
such time a member of the ERISA Group.

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

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

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“Preferred Dividends”
means, with respect to any entity, dividends or other distributions which are
payable to holders of any ownership interests in such entity which entitle the
holders of such ownership interests to be paid on a preferred basis prior to
dividends or other distributions to the holders of other types of ownership
interests in such entity, provided that “Preferred Dividends” shall not mean
any preferred equity in any joint venture relationship between the Borrower or
any subsidiary of the Borrower and any Person other than a shareholder in the
Borrower.

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

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

“Project” means
any real estate asset owned by the Borrower or any of its Subsidiaries or any
Investment Affiliate, and operated or intended to be operated as a multifamily
residential property.

“Property” of a
Person means any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated
by such Person.

“Published Rate” shall mean
the rate of interest published each Business Day in The Wall Street Journal “Money
Rates” listing under the caption “London Interbank Offered Rates” for a one
month period (or, if no such rate is published therein for any reason, then the
Published Rate shall be the rate at which U.S. dollar deposits are offered by
leading banks in the London interbank deposit market for a one month period as
published in another publication selected by the Administrative Agent).

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

“Ratable Share” shall mean
the proportion that a Lender’s Commitment bears to all outstanding Advances of
all of the Lenders.  If the Commitments have terminated or expired, the Ratable
Shares shall be determined based upon the amount of Advances most recently in
effect, giving effect to any assignments.

“Real Property Under
Development” is defined as any Project which either is under construction or
completed and has not yet achieved a leasing level of 85% or more.

“Recourse
Indebtedness” means any Indebtedness of Borrower or any other member of the
Consolidated Group with respect to which the liability of the obligor is not
limited to the obligor’s interest in specified assets securing such Indebtedness,
subject to customary limited exceptions for certain acts or types of liability,
and provided further that Non-Recourse Indebtedness shall not be considered
Recourse Indebtedness even if a breach of such customary limited exceptions to
recourse liability would result in such Non-Recourse Indebtedness becoming
recourse to the obligor thereunder.

“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor or other regulation or official
interpretation of said Board of Governors relating to the extension of credit
by banks for the purpose of purchasing or carrying margin stocks applicable to
member banks of the Federal Reserve System.

“Release” is
defined in Section 3.3. 

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“Reportable
Event” means a reportable event as defined in Section 4043 of ERISA and the
regulations issued under such section, with respect to a Plan, excluding,
however, such events as to which the PBGC by regulation waived the requirement
of Section 4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event, provided, however, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall
be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.

“Required Lenders” shall
mean (i) if there are only two (2) Lenders, all Lenders (other than any
Defaulting Lender), or (ii) if there exist three (3) or more Lenders, Lenders
(other than any Defaulting Lender) having more than 66-2⁄3% of the
aggregate amount of all outstanding Advances or Loans (excluding any Defaulting
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 the
Federal Reserve Board or other governmental authority or agency having
jurisdiction with respect thereto for determining the maximum reserves
(including, without limitation, basic, supplemental, marginal and emergency
reserves) for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D) maintained by a member bank of the Federal
Reserve System.

“Revolving
Credit Agreement” shall mean that certain Amended and Restated Credit
Agreement  dated October 18, 2010 by and among the Borrower, the Administrative
Agent, and certain lenders party thereto, as amended from time to time.

“Section” means
a numbered section of this Agreement, unless another document is specifically
referenced.

“Secured
Indebtedness” means any Indebtedness which is secured by a Lien on a Project or
other tangible asset (which excludes, without limitation, ownership interests
in any Person) which had, in the aggregate, a value in excess of the amount of
such Indebtedness at the time such Indebtedness was incurred.

“Single
Employer Plan” means a Plan maintained by the Borrower or any member of the
ERISA Group for employees of 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 that is subordinated by its express terms to the repayment
of the Obligations under this Facility; and (ii) any Indebtedness of Borrower
or any Subsidiary of Borrower due to any Affiliate of Borrower that is
expressly subordinate in priority and payment to the Obligations under this
Facility.

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

“Subsidiary
Guarantor” means, as of any date, each Wholly-Owned Subsidiary of Borrower
which is then a party to the Subsidiary Guaranty pursuant to Section 6.21. 

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“Subsidiary
Guaranty” means the guaranty to be executed and delivered by those Subsidiaries
of the Borrower listed on Schedule 6.21, substantially in the form of Exhibit
D, as the same may be amended, supplemented or otherwise modified from time
to time pursuant to Section 6.21, including any joinders executed by
additional Subsidiary Guarantors. 

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

“Taxes” means
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the
foregoing, but excluding Excluded Taxes and Other Taxes.

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“Total Asset
Value” means, as of any date, (i) the Net
Operating Income for the most recent four (4) consecutive fiscal quarters of
the Borrower for which financial results have been reported attributable to
Projects then owned or leased by Borrower or any other member of the
Consolidated Group (excluding 100% of the Net Operating Income attributable to
any such Projects which have not been owned or leased by any combination of
Borrower, other members of the Consolidated Group or Investment Affiliates and
included in Borrower’s financial statements for at least six (6) fiscal
quarters as of the end of the most recent fiscal quarter for which financial
results have been reported, other than Net Operating Income from Overlimit
General Projects (as defined below) then owned or leased by Borrower or any
other member of the Consolidated Group which Net Operating Income 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 during such six (6) fiscal
quarter period (including the amount of any assumed Indebtedness secured
thereby) which are not Overlimit General Projects, plus
(iii) the Consolidated Group Pro Rata Share of Net Operating Income for
the most recent four (4) consecutive fiscal quarters of the Borrower for which
financial results have been reported attributable to
Projects then owned or leased by an Investment Affiliate (excluding Net
Operating Income attributable to any such Projects which have not been owned or
leased by any combination of Borrower, other members of the Consolidated
Group or Investment Affiliates for six (6) fiscal quarters as of the end of such most recent fiscal
quarter for which financial results have been reported, other than Net
Operating Income from Overlimit General Projects then owned or leased by an
Investment Affiliate which Net Operating Income will be included in this clause
(iii)) divided by the Capitalization Rate, plus (iv) the Consolidated
Group Pro Rata Share of 100% of cost for any such Projects first
acquired or leased by an Investment Affiliate during such six (6) fiscal
quarter period (including the amount of any assumed Indebtedness secured
thereby) which are not Overlimit General Projects; plus (v) cash and Cash Equivalents owned by Borrower or any other
member of the Consolidated Group as of the end of the most recent fiscal
quarter for which financial results have been reported, plus (vi) the
Consolidated Group Pro Rata Share of all cash and Cash Equivalents owned by
Investment Affiliates as of the end of the most recent fiscal quarter financial
results have been reported plus (vii) Real Property Under Development and
Undeveloped Land of the Consolidated Group, valued at cost, plus (viii) the
Consolidated Group Pro Rata Share of any Real Property Under Development and
Undeveloped Land of Investment Affiliates, valued at cost, plus (ix) First
Mortgage Receivables owned by the Consolidated Group, valued in accordance with
GAAP, plus (x) the Consolidated Group Pro Rata Share of First Mortgage Receivables
owned by any Investment Affiliates, valued in accordance with GAAP.  As
used herein, the term “Overlimit General Projects” shall mean, if at any time
the aggregate amount contributed to Total Asset Value under clauses (ii) and
(iv) of this definition on account of acquired Projects owned or leased for
more than four (4) quarters but less than seven (7) quarters would exceed
twenty percent (20%) of Total Asset Value, a sufficient number of such
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 accordance with
clauses (i) or (iii), so that the aggregate value of the remaining Projects
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 this definition 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 be included at cost in
up to but not more than six (6) quarterly financial statements of Borrower. 

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

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

“Unencumbered Real Property Value” shall mean, as of
any date, (i) Unencumbered Real Property Adjusted NOI divided by the
Capitalization Rate applicable thereto, plus (ii) the cost of all Qualifying
Unencumbered Projects then owned by Borrower or a Subsidiary Guarantor which
have not been owned by any combination of Borrower, other members of the
Consolidated Group or Investment Affiliates and included in Borrower’s
financial statements for six (6) consecutive fiscal quarters as of the end of
the most recent fiscal quarter of Borrower for which financial results have
been reported other than Overlimit Unencumbered Projects, with the cost of each
such Qualifying Unencumbered Project being the amount capitalized as “real
estate” on Borrower’s balance sheet plus any portion of the acquisition cost
required to be allocated as an intangible asset by GAAP.  As used herein, the
term “Overlimit Unencumbered Projects” shall mean, if at any time the aggregate
amount contributed to Unencumbered Real Property Value under clause (ii) of
this definition for acquired Qualifying Unencumbered Projects owned or leased
for more than four (4) quarters but less than seven (7) quarters would exceed
twenty percent (20%) of Unencumbered Real Property Value, a sufficient number
of 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 with
clause (i), so that the aggregate value of the remaining Qualifying
Unencumbered Projects owned or leased for more than four (4) quarters but less
than seven (7) quarters which are included at cost under clause (ii) of this
definition does not exceed twenty percent (20%) of Unencumbered Real Property
Value. For the avoidance of doubt, such references to “less than seven (7)
quarters” shall mean that the applicable Project shall be included at cost in
up to but not more than six (6) quarterly financial statements of Borrower.

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

“Unfunded
Liabilities” means the amount (if any) by which the present value of all vested
nonforfeitable benefits under all Single Employer Plans exceeds the fair market
value of all such Plan assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plans.

“Unscheduled Mandatory Payments”
shall have the meaning in Section 2.6.

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

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

The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.

1.2             
Construction

.  Unless the context
of this Agreement otherwise clearly requires, the following rules of
construction shall apply to this Agreement and each of the other Loan
Documents: (i) references to the plural include the singular, the plural, the
part and the whole and the words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”; (ii) the words
“hereof,” “herein,” “hereunder,” “hereto” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document
as a whole; (iii) article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other 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 Loan Document together with the schedules and exhibits
hereto or thereto, document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for, superseded or
restated; (vi) relative to the 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 same meaning and effect and to refer to any and all tangible
and intangible assets and properties, including cash, securities, accounts and
contract rights, (viii) section headings herein and in each other Loan Document
are included for convenience and shall not affect the interpretation of this
Agreement or such Loan Document, and (ix) unless otherwise specified, all
references herein to times of day shall be references to Eastern Time.

1.3             
Accounting Principles

.  Except as otherwise
provided in this Agreement, all computations and determinations as to
accounting or financial matters and all financial statements to be delivered
pursuant to this Agreement shall be made and prepared in accordance with GAAP
(including principles of consolidation where appropriate), and all accounting
or financial terms shall have the meanings ascribed to such terms by GAAP;
provided, however, that all accounting terms used in Article VII (and
all defined terms used in the definition of any accounting term used in Article
VII shall have the meaning given to such terms (and defined terms) under
GAAP as in effect on the date hereof applied on a basis consistent with those
used in preparing statements referred to in Section 6.4.  In the event
of any change after the date hereof in GAAP, and if such change would affect
the computation of any of the financial covenants set forth in Article VII,
then the parties hereto agree to endeavor, in good faith, to agree upon an
amendment to this Agreement that would adjust such financial covenants in a
manner that would preserve the original intent thereof, but would allow
compliance therewith to be determined in accordance with the Borrower’s
financial statements at that time, provided that, until so amended such
financial covenants shall continue to be computed in accordance with GAAP prior
to such change therein.

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            Notwithstanding
any provision contained herein to the contrary, solely for purposes of
calculating any financial covenant required hereunder, such calculation shall
ignore the application of the Convertible Debt Accounting Guidance, if and to
the extent otherwise applicable to Borrower’s financial statements.  If at
any time any material change in GAAP would materially affect the computation of
any financial ratio or requirement set forth in any of the Loan Documents, and
either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the
Required Lenders (which shall not be unreasonably withheld)); provide that,
until so amended, (i) such ratio or requirement shall continue to be computed
in accordance with GAAP prior to such change therein and (ii) the Borrower
shall provide to the Administrative Agent and the Lenders an explanation of the
impact of such change in reasonable detail satisfactory to the Administrative
Agent.

ARTICLE II

THE CREDIT

2.1             
Generally

.  This facility (“Facility”)
is a term loan facility and, subject to the provisions of this Agreement, each
Lender severally agrees to make Loans to the Borrower in a single disbursement
in an aggregate principal amount equal to its Commitment.  Upon disbursement of
such Loans, each Lender’s Commitment shall terminate and Borrower shall not have
the right to reborrow all or any portion of any Loans that are repaid or
prepaid.  No Lender will be required to make any Loan which would exceed such
Lender’s then-current Commitment.  

2.2             
Interest Rate Options

.  The Borrower shall
pay interest in respect of the outstanding unpaid principal amount of the Loans
as selected by it from the Base Rate Option or LIBOR Rate Option set forth
below applicable to the Advances, it being understood that, subject to the
provisions of this Agreement, the Borrower may select different Interest Rate
Options and different Interest Periods to apply simultaneously to the Loans
comprising different Borrowing Tranches and may convert to or renew one or more
Interest Rate Options with respect to all or any portion of the Loans
comprising any Borrowing Tranche; provided that there shall not be at any one
time outstanding more than three (3) Borrowing Tranches in the aggregate among
all of the Loans and provided further that if an Event of Default or Potential
Default exists and is continuing, the Borrower may not request, convert to, or
renew the LIBOR Rate Option for any Advances and the Required Lenders may
demand that all existing Borrowing Tranches bearing interest under the LIBOR
Rate Option shall be converted immediately to the Base Rate Option, subject to
the obligation of the Borrower to pay any indemnity under Article IV in
connection with such conversion.  The Borrower shall have the right to select
from the following Interest Rate Options applicable to the Advances:

(a)               
Base Rate Option:  A fluctuating rate per annum (computed on the basis
of a year of 360 days and actual days elapsed) equal to the Base Rate plus the
Base Rate Applicable Margin, such interest rate to change automatically from
time to time effective as of the effective date of each change in the Base
Rate; or

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

2.3             
Fees

.  The Borrower agrees
to pay all fees payable to the Administrative Agent pursuant to the Borrower’s
letter agreement with the Administrative Agent dated as of April 22, 2011 (the
“Fee Letter”).  

       
   2.4              

Usury

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

2.5             
Minimum Amount of Each Advance

.  Each LIBOR Rate
Advance shall be in an amount not less than $1,000,000 or a whole multiple of
$100,000 in excess thereof.

2.6             
Principal Payments; Optional Prepayments

.  

(a)               
Borrower shall make principal
payments on amounts outstanding under the Revolving Credit Agreement whenever a
reduction in the Unencumbered Real Property Value causes the outstanding Loans
hereunder plus the outstanding “Advances” and “Facility Letter of Credit
Obligations” under the Revolving Credit Agreement (the “Total Outstandings”) to
be greater than the maximum amounts permitted under Section 7.20(c) and Section
7.20(d) as required by Section 3.3 of the Revolving Credit Agreement.  In the
event Borrower fails to make such payment under the Revolving Credit Agreement,
it will make such mandatory principal payments of the Loans, which shall be due
and payable immediately when the Borrower or any such Loan Party obtains
knowledge of such failure or the date upon which the Borrower has received
written notice of such failure from the Administrative Agent.  Such Unscheduled
Mandatory Payment shall be in the amount needed to reduce the Total
Outstandings to an amount equal to or less than such maximum amounts permitted
by Section 7.20(c) and Section 7.20(d).

(b)              
Any outstanding Advances and all
other unpaid Obligations shall be paid in full by Borrower on the Facility
Termination Date.  

(c)               
The Borrower may prepay the
Advances, without premium or penalty, commencing on June 3, 2012, upon at least
one (1) Business Day’s notice to the Administrative Agent given not later than 1:00
p.m. (EST) on such Business Day, which notice shall specify the date and amount
of prepayment and whether the prepayment is of LIBOR Rate Advances, Base Rate
Advances, or a combination thereof, and if a combination thereof, the amount
allocable to each; provided, however, that any partial prepayment under this
Subsection shall (i) be in a principal amount not less than $1,000,000 or a
whole multiple of $100,000 in excess thereof, and (ii) include interest accrued
pursuant thereto in the case prepayment is of a LIBOR Rate Advance.  Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof.  If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein.  If Borrower
elects to prepay any Advances prior to June 3, 2012, any such prepayments shall
be subject to a fee of 0.50% on any such prepaid principal amounts.

2.7             
Conversion and Continuation of
Outstanding Advances

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.  Base Rate Advances
shall continue as Base Rate Advances unless and until such Base Rate Advances
are converted into LIBOR Rate Advances.  Each LIBOR Rate Advance shall continue
as a LIBOR Rate Advance until the end of the then applicable Interest Period
therefor, at which time such LIBOR Rate Advance shall be automatically
converted into a Base Rate Advance unless the Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice requesting that, at the
end of such Interest Period, such LIBOR Rate Advance either continue as a LIBOR
Rate Advance for the same or another Interest Period or be converted to an
Advance of another Type.  Borrower may convert or renew the current Interest
Rate Option applicable to existing Loans, by notifying the Administrative
Agent, not later than noon, Eastern time, three (3) Business Days prior to the
proposed effective date of such conversion/continuation, in writing in the form
of Exhibit G or by telephone immediately confirmed in writing by letter,
facsimile or telex in such form (each, a “Conversion/Continuation Notice”),
it being understood that the Administrative Agent may rely on the authority of
any individual making such a telephonic request without the necessity of
receipt of such written confirmation.  Each Conversion/Continuation Notice shall
be irrevocable and shall specify the aggregate amount of the proposed Loans
comprising each Borrowing Tranche, and, if applicable, the Interest Period. 
The Administrative Agent shall notify the Lenders of its receipt of any such
Conversion/Continuation Notice pursuant to the terms of Section 2.13.

2.8             
Changes in Interest Rate, Etc.

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

2.9             
Rates Applicable After Event of
Default

.  During the
continuance of an Event of Default the Administrative Agent may, at the
direction of the Required Lenders, by notice to the Borrower, declare that (i)
no Advance may be converted into, or continued beyond the expiration of any
then-current Interest Period as, a LIBOR Rate Advance, and (ii) the Default
Rate shall apply (which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 9.2 requiring unanimous
consent of the Lenders to changes in interest rates), provided, however, that
the Default Rate shall become applicable automatically if an Event of Default
occurs under Section 8.1, 8.2, or 8.3, unless waived by
the Required Lenders.

2.10         
Method of Payment

.  All payments of the
Obligations hereunder shall be made, without setoff, deduction, or
counterclaim, in immediately available funds to the Administrative Agent at the
Principal Office of Administrative Agent by noon, Eastern time, on the date
when due and shall be applied ratably by the Administrative Agent among the
Lenders.  As provided elsewhere herein, all Lenders’
interests in the Loan Documents shall be ratable undivided interests and none
of such Lenders’ interests shall have priority over the others.  Each payment
delivered to the Administrative Agent for the account of any Lender or amount
to be applied or paid by the Administrative Agent to any Lender shall be paid promptly
(on the same day as received by the Administrative Agent if received prior to
noon, Eastern time, on such day and otherwise on the next Business Day) by the
Administrative Agent to such Lender in the same type of funds that the
Administrative Agent received at its address specified pursuant to Article
XIV or at any other office specified in a notice received by the
Administrative Agent from such Lender.  Payments received by the Administrative
Agent but not timely funded to the Lenders shall bear interest payable by the
Administrative Agent at the Federal Funds Effective Rate from the date due
until the date paid.  The Administrative Agent is hereby authorized to charge
the account of the Borrower maintained with PNC Bank, National Association for
each payment of principal, interest and fees as it becomes due hereunder.

           2.11         
Notes; Telephonic Notices

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

2.12         
Interest Payment Dates;
Interest and Fee Basis

.  Interest accrued on
each Advance shall be payable on each Payment Date, commencing with the first
such date to occur after the date hereof, at maturity, whether by acceleration
or otherwise, and upon any termination of the Aggregate Commitment in its
entirety.  Interest on LIBOR Rate Advances shall be calculated for actual days
elapsed on the basis of a 360-day year.  Interest on Base Rate Advances shall
be calculated for actual days elapsed on the basis of a 360 day year. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon, Eastern time.
If any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such
payment.

2.13         
Notification of Advances,
Interest Rates and Prepayments

.  The Administrative
Agent will notify each Lender of the contents of each Conversion/Continuation
Notice and repayment notice received by it hereunder not later than the close
of business on the Business Day such notice is received by the Administrative
Agent.  The Administrative Agent will notify each Lender of the interest rate
applicable to each LIBOR Rate Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Base Rate.

2.14         
Presumptions by Administrative
Agent

.  Unless the Administrative
Agent shall have received notice from the Borrower, prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders
hereunder, that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders the amount due.  In such event, if the Borrower has not in fact
made such payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender, with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.

2.15         
Replacement of a Lender

.  In the event any
Lender (i) gives notice under Section 4.4, (ii) requests compensation
under Section 4.1, or requires the Borrower to pay any additional amount
to any Lender or any Governmental Body for the account of any Lender pursuant
to Section 4.2, (iii) is a Defaulting Lender, (iv) becomes subject
to the control of an Governmental Authority (other than normal and customary
supervision), or (v) is a Non-Consenting Lender referred to in Section 9.2,
then in any such event the Borrower may, at its sole expense, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Article IX, all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:

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(a)               
the Borrower shall have paid to
the Administrative Agent the assignment fee specified in Section 13.2;

 

(b)              
such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder
and under the other Loan Documents (including any amounts under Section 4.3)
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);

(c)               
in the case of any such assignment
resulting from a claim for compensation under Section 4.1 or payments
required to be made pursuant to Section 4.2, such assignment will result
in a reduction in such compensation or payments thereafter; and

(d)              
such assignment does not conflict
with applicable Law.

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

ARTICLE III 

UNENCUMBERED
POOL PROPERTIES

            3.1       Eligibility
of Projects

(a)               
As of the Agreement Execution
Date, the Administrative Agent has approved for inclusion as Qualifying
Unencumbered Projects those Projects identified on Schedule 3.1, and
such Projects shall become the initial Qualifying Unencumbered Projects.

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

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

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

(iii)            
such other information, including
operating statements and site plans, that the Administrative Agent may
reasonably request in order to evaluate such Project.

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(c)               
If, after receipt and review of
the foregoing, unless Administrative Agent has reasonably determined that the
additional Project does not satisfy the requirements to be an Eligible
Unencumbered Project, the Administrative 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 to proceed with the acceptance of such Project as an
Unencumbered Project.  If the Administrative Agent has determined that the
additional Project does not satisfy the requirements to be an Eligible
Unencumbered Project and therefore that addition of such Property as a
Qualifying Unencumbered Project requires Required Lender approval, the
Administrative Agent shall so notify the Borrower and the Lenders and shall
forward to the Lenders all documents and information submitted by Borrower with
respect to such additional Project. In such event each Lender shall notify the
Administrative Agent whether it approves of the designation of such Project as
a Qualifying Unencumbered Project, notwithstanding such non-compliance, within
ten (10) Business Days of receipt of such notice and all such documents and
information.  If a Lender shall fail to so notify the Administrative Agent,
then such Lender shall be deemed to have approved of such Project.  Upon
approval of such Project by the Administrative Agent, or, if required, by
Required Lenders, and upon execution and delivery of all of the documents
required to be provided under Section 3.2, such Project shall become a
Qualifying Unencumbered Project.  

3.2             
Conditions Precedent to a
Project Becoming a Qualifying Unencumbered Project

.  No
Property shall become a Qualifying Unencumbered Project until the
Administrative Agent, or, if required, the Required Lenders, shall have
approved of such Project as provided in Section 3.1, and Borrower shall
have caused to be executed and delivered to the Administrative Agent the
following instruments, documents and agreements in respect of such Property,
each to be in form and substance reasonably satisfactory to the Administrative
Agent:

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

(b)              
a Compliance Certificate
calculated after giving effect to the inclusion 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 not less
than two (2) Business Days prior written notice to the Administrative Agent,
that the Subsidiary owning a Qualifying Unencumbered Project be released from
the Guaranty or that any Qualifying Unencumbered Project be released from such
status in whole or in part, which release (the “Release”) shall be
effected by the Administrative Agent if all of the following conditions are
satisfied as of the date of such Release:

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

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26 -

 

 

(b)              
If after giving effect to such
Release (and taking into account any concurrent addition of a new Qualifying
Unencumbered Project pursuant to Section 3.1), the resulting reduction
in the Unencumbered Real Property Value and Unencumbered Real Property Adjusted
NOI would cause a breach of either Section 7.20(c) or Section 7.20(d),
Borrower shall have complied with the provisions of Section 2.6(a).  In addition, if after giving effect to such Release
(and taking into account any concurrent addition of a new Qualifying
Unencumbered Project pursuant to Section 3.1),  any resulting reduction
in the percentage of units in the Qualifying Unencumbered Projects which are
physically occupied would cause a breach of Section 7.20(e), Borrower
shall take the actions required under such Section 7.20(e) within the
time required thereunder.

In connection with a
Release, Borrower shall deliver to the Administrative Agent a certificate from
Borrower’s chief executive officer or chief financial officer regarding the
matters referred to in the immediately preceding clauses (a) and (b). 
Notwithstanding the foregoing, the Administrative Agent shall not be obligated
to release any such Subsidiary from the Subsidiary Guaranty if (i) such
Subsidiary owns any other Qualifying Unencumbered 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.

ARTICLE IV

INCREASED 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);

(ii)              
subject any Lender to any tax of
any kind whatsoever with respect to this Agreement or any Loan under the LIBOR
Rate Option made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered
by Section 4.2 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender); or

(iii)            
impose on any Lender or the London
interbank market any other condition, cost or expense affecting this Agreement
or any Loan under the LIBOR Rate Option made by such Lender;

and the result of any
of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Loan under the LIBOR Rate Option (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender, or
to reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or any other amount) then, upon request of such
Lender, the Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender for such additional costs incurred or reduction
suffered.

(b)              
If any Lender determines that any
Change in Law affecting such Lender or any lending office of such Lender or
such Lender’s holding company, if any, regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s capital
or on the capital of such Lender’s holding company, if any, as a consequence of
this Agreement, the Commitments of such Lender or the Loans made by such
Lender, to a level below that which such Lender or such Lender’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s policies and the policies of such Lender’s holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender’s holding company for any such reduction suffered.

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

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

4.2             
Taxes

.

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

(b)              
The Borrower shall indemnify the
Administrative Agent and each Lender within ten (10) days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative Agent
and such Lender, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.  As soon as
practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

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(c)               
Any Foreign Lender that is
entitled to an exemption from or reduction of withholding tax under the Law of
the jurisdiction in which the Borrower is resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with
a copy to the Administrative Agent), at the time or times prescribed by
applicable Law or reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable Law as will permit such payments to be made without withholding or
at a reduced rate of withholding.  Notwithstanding the submission of such
documentation claiming a reduced rate of or exemption from U.S. withholding
tax, the Administrative Agent shall be entitled to withhold United States federal
income taxes at the full 30% withholding rate if in its reasonable judgment it
is required to do so under the due diligence requirements imposed upon a
withholding agent under § 1.1441-7(b) of the United States Income Tax
Regulations.  Further, the Administrative Agent is indemnified under §
1.1461-1(e) of the United States Income Tax Regulations against any claims and
demands of any Lender or assignee or participant of a Lender for the amount of
any tax it deducts and withholds in accordance with regulations under § 1441 of
the Internal Revenue Code.  In addition, any Lender, if requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable Law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

(d)              
Without limiting the generality of
the foregoing, in the event that 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 prior to 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 the Administrative Agent, but only if such Foreign Lender is
legally entitled to do so), whichever of the following is applicable:

(i)                
two (2) duly completed valid
originals of IRS Form W-8BEN claiming eligibility for benefits of an income tax
treaty to which the United States 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 the exemption for portfolio interest under section
881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is
not (A) a “bank” within the 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 the Code and (y) two duly completed valid originals
of IRS Form W-8BEN,

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

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

4.3             
Indemnity

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

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(a)               
payment, prepayment, conversion or
renewal of any Loan to which a LIBOR Rate Option applies on a day other than
the last day of the corresponding Interest Period (whether or not such payment
or prepayment is mandatory, voluntary or automatic and whether or not such
payment or prepayment is then due),

(b)              
attempt by the Borrower to revoke
(expressly, by later inconsistent notices or otherwise) in whole or part any
notice relating to prepayments under Section 2.6, or

(c)               
default by the Borrower in the
performance or observance of any covenant or condition contained in this
Agreement or any other Loan Document, including any failure of the Borrower to
pay when due (by acceleration or otherwise) any principal, interest, or any
other amount due hereunder.

If any Lender
sustains or incurs any such loss or expense, it shall from time to time notify
the Borrower of the amount determined in good faith by such Lender (which
determination may include such assumptions, allocations of costs and expenses
and averaging or attribution methods as such Lender shall deem reasonable) to
be necessary to indemnify such Lender for such loss or expense.  Such notice
shall set forth in reasonable detail the basis for such determination.  Such
amount shall be due and payable by the Borrower to such Lender ten (10)
Business Days after such notice is given.

4.4             
LIBOR Rate Unascertainable;
Illegality; Increased Costs; Deposits Not Available

.

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

(i)                
adequate and reasonable means do
not exist for ascertaining such LIBOR Rate, or

(ii)              
a contingency has occurred which
materially and adversely affects the London interbank eurodollar market
relating to the LIBOR Rate, the Administrative Agent shall have the rights
specified in Section 4.5.

(b)              
In addition, if at any time any
Lender shall have determined that:

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

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

(iii)            
after making all reasonable
efforts, deposits of the relevant amount in Dollars for the relevant Interest
Period for a Loan, or to banks generally, to which a LIBOR Rate Option applies,
respectively, are not available to such Lender with respect to such Loan, or to
banks generally, in the interbank eurodollar market,

then the
Administrative Agent shall have the rights specified in Section 4.5.

4.5             
Administrative Agent’s and
Lender’s Rights

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.  In the case of any
event specified in Section 4.4(a) above, the Administrative Agent shall
promptly so notify the Lenders and the Borrower thereof, and in the case of an
event specified in Section 4.4(b) above, such Lender shall promptly so
notify the Administrative Agent and endorse a certificate to such notice as to
the specific circumstances of such notice, and the Administrative Agent shall
promptly send copies of such notice and certificate to the other Lenders and
the Borrower.  Upon such date as shall be specified in such notice (which shall
not be earlier than the date such notice is given), the obligation of (A) the
Lenders, in the case of such notice given by the Administrative Agent, or (B)
such Lender, in the case of such notice given by such Lender, to allow the
Borrower to select, convert to or renew a LIBOR Rate Option shall be suspended
until the Administrative Agent shall have later notified the Borrower, or such
Lender shall have later notified the Administrative Agent, of the
Administrative Agent’s or such Lender’s, as the case may be, determination that
the circumstances giving rise to such previous determination no longer exist. 
If at any time the Administrative Agent makes a determination under Section
4.4(a) and the Borrower has previously notified the Administrative Agent of
its selection of, conversion to or renewal of a LIBOR Rate Option and such
Interest Rate Option has not yet gone into effect, such notification shall be
deemed to provide for selection of, conversion to or renewal of the Base Rate
Option otherwise available with respect to such Loans.  If any Lender notifies
the Administrative Agent of a determination under Section 4.4(b), the
Borrower shall, subject to the Borrower’s indemnification Obligations under Section
4.3, as to any Loan of the Lender to which a LIBOR Rate Option applies, on
the date specified in such notice either convert such Loan to the Base Rate
Option otherwise available with respect to such Loan or prepay such Loan in
accordance with Section 2.6.  Absent due notice from the Borrower of
conversion or prepayment, such Loan shall automatically be converted to the
Base Rate Option otherwise available with respect to such Loan upon such
specified date.

ARTICLE V

CONDITIONS
PRECEDENT

5.1             
Initial Advance.

  The Lenders shall
not be required to make Loans hereunder unless (i) the Borrower shall, prior to
or concurrently with the making of the Loans, have paid all fees due and
payable to the Lenders and the Administrative Agent hereunder, and (ii) the
Borrower shall have furnished to the Administrative Agent, with sufficient
copies for the Lenders, the following:

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

(b)              
Certificates of good standing for
each Loan Party from its state of organization, certified by the appropriate
governmental officer and dated not more than thirty (30) days prior to the
Agreement Execution Date;

(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 Persons authorized to sign the Loan Documents and to make
borrowings hereunder on behalf of such parties, upon which certificate the
Administrative Agent and the Lenders shall be entitled to rely until informed
of any change in writing by the Borrower;

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

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

(g)              
A closing certificate, signed by
an Authorized Officer of the Borrower, stating that on the Borrowing Date no
Event of Default or Potential Default has occurred and is continuing, there has
been no Material Adverse Effect nor any current or pending litigation that may
result in a Material Adverse Effect other than as previously disclosed in
writing to the Administrative Agent, and that all representations and
warranties of the Borrower are true and correct in all material respects as of
the Borrowing 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 with respect to the Borrower from the state of its
organization and the state in which its principal place of business is located;

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

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

(l)                
Completion of Administrative
Agent’s due diligence review of Borrower and Administrative Agent’s
determination that (i) no Event of Default exists, and (ii) no material adverse
change in Borrower’s financial condition has occurred;

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

(n)              
Completion of any other documentation
the Administrative Agent or its counsel may have reasonably requested, the form
and substance of which documents shall be reasonably acceptable to the parties
and their respective counsel.

5.2             
General Conditions.  

The Lenders shall not
be required to make the initial Advance hereunder unless the following are true
on the Borrowing Date:

(a)               
There exists no Event of Default
or Potential Default; and

(b)              
The representations and warranties
contained in Article VI are true and correct in all material
respects as of the Borrowing Date with respect to the Loan Parties in existence
on the Borrowing Date, except to the extent any such representation or warranty
is stated to relate solely to an earlier date, in which case such
representation or warranty shall be true and correct in all material respects
on and as of such earlier date.

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ARTICLE
VI

REPRESENTATIONS
AND WARRANTIES

The Borrower
represents and warrants to the Lenders that:

6.1             
Existence

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

6.2             
Authorization and Validity

.  Each Loan Party has the corporate, limited
partnership, or limited liability company power and authority and legal right
to execute and deliver the Loan Documents and to perform its obligations
thereunder.  The execution and delivery by the Borrower of the Loan Documents
and the performance of its obligations thereunder have been duly authorized by
proper proceedings, and the Loan Documents constitute legal, valid and binding
obligations of each Loan Party enforceable against each Loan Party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally.

6.3             
No Conflict; Government Consent

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

6.4             
Financial Statements; Material
Adverse Effect

.  All consolidated financial
statements of the Loan Parties heretofore or hereafter delivered to the Lenders
were prepared in accordance with GAAP in effect on the date of such statements
and fairly present in all material respects the consolidated financial
condition and operations of the Consolidated Group at such date and the
consolidated results of their operations for the period then ended, subject, in
the case of interim financial statements, to normal and customary year-end
adjustments.  From the date of the most recent financial statements delivered
to the Lenders through the Agreement Execution Date, there was no change in the
business, properties, or condition (financial or otherwise) of the Borrower and
its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.

6.5             
Taxes

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.  The Loan Parties
have filed all United States federal tax returns and all other tax returns
which are required to be filed and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by the Borrower or any of its
Subsidiaries except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided, and except any non‐compliance
which does not have a Material Adverse Effect.  No tax liens have been filed
with respect to such taxes, except for ad valorem real estate tax contests in
the ordinary course of Borrower’s business not having a Material Adverse
Effect.  The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of any taxes or other governmental charges are
adequate.

6.6             
Litigation and Guarantee
Obligations

.  Except as set forth
on Schedule 6.6 hereto or as set forth in written notice to the
Administrative Agent from time to time, 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 be expected to have a Material Adverse Effect.  

6.7             
Subsidiaries

.  Schedule 6.7
hereto contains, an accurate list of all Subsidiaries of the Borrower, setting
forth their respective jurisdictions of incorporation or formation and the
percentage of their respective capital stock or partnership or membership
interest owned by the Borrower or other Subsidiaries.  All of the issued and
outstanding shares of capital stock of such Subsidiaries that are corporations
have been duly authorized and issued and are fully paid and non-assessable.

6.8             
ERISA

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

            None of the
assets of the Borrower or any Subsidiary constitute “plan assets” within the
meaning of ERISA, the Code and the respective regulations promulgated
thereunder.  The execution, delivery and performance of this Agreement and the
other Loan Documents, and the borrowing and repayment of amounts hereunder, do
not and will not constitute “prohibited transactions” under ERISA or the Code.

6.9             
Accuracy of Information

.  To the best of
Borrower’s knowledge, no information, exhibit or report furnished by the Loan
Parties to the Administrative Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.

6.10         
Regulation U

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

6.11         
Material Agreements

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

6.12         
Compliance With Laws

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.  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 foreign government or
any instrumentality or agency thereof, having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property,
except for any non-compliance which would not have a Material Adverse Effect. 
The Loan Parties have not received any uncured written notice to the effect
that its operations are not in material compliance with any of the requirements
of applicable federal, state and local environmental, health and safety
statutes and regulations or the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release 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 6.13 hereto,
on the date of this Agreement, the Borrower or its Subsidiaries will,
respectively, have good and marketable title, free of all Liens other than
Permitted Liens, respectively, to all of the Projects reflected in the
financial 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.

6.15         
Solvency.

(a)               
Immediately after the Agreement
Execution Date and immediately following the making of each Loan and after
giving effect to the application of the proceeds of such Loans, (a) the
fair value of the assets of the Borrower 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 present fair saleable value of the Property of
the Borrower and its Subsidiaries on a consolidated basis will be greater than
the amount that will be required to pay the probable liability of the Borrower
and its Subsidiaries on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Borrower and its Subsidiaries
on a consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) the Borrower and its Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.

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

6.16         
Insurance

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

6.17         
REIT and Listing Status

.  Borrower is
qualified as a real estate investment trust under Section 856 of the Code and
currently is in compliance in all material respects with all provisions of the
Code applicable to the qualification of the Borrower as a real estate
investment trust. Borrower’s Capital Stock is and shall be at all times
prior to the Facility Termination Date listed on at least one of the New York
Stock Exchange, NASDAQ or the American Stock Exchange.

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6.18         
Title to Property

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

6.19         
Environmental Matters

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

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

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

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

(d)              
No judicial proceedings or
governmental or administrative action is pending, or, to the knowledge of the
Borrower, threatened, under any Environmental Law to which the Borrower or any
of its Subsidiaries is or, to the Borrower’s knowledge, will be named as a
party with respect to the Projects of the Borrower and its Subsidiaries, nor
are there any consent decrees or other decrees, consent orders, administrative
order or other orders, or other administrative of judicial requirements
outstanding under any Environmental Law with 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
Environmental Concern at or from the Projects of the Borrower and its
Subsidiaries, or arising from or related to the operations of the Borrower and
its Subsidiaries in connection with the Projects in violation of or in amounts
or in a manner that could give rise to liability under Environmental Laws.

6.20         
Office of Foreign Asset Control

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.  Borrower and any
Subsidiary Guarantor are not (and will not be) a person with whom any Lender is
restricted from doing business under regulations of the Office of Foreign Asset
Control (“OFAC”) of the Department of the Treasury of the United States of
America (including, those Persons named on OFAC’s Specially Designated and
Blocked Persons list) or under any statute, executive order (including, the
September 24, 2001 Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action and is not and shall not knowingly
engage in any dealings or transactions or otherwise be associated with such
persons.  In addition, Borrower hereby agrees to provide to any Lender with any
additional information that any Lender deems necessary from time to time in
order to ensure compliance with all applicable Laws concerning money laundering
and similar activities.

6.21         
Subsidiary Guaranty

.           Borrower
shall cause each Subsidiary Guarantor listed on Schedule 3.1, as amended
from time to time, to execute and deliver to the Administrative Agent the
Subsidiary Guaranty.  Borrower shall cause each Subsidiary which hereafter owns
a Qualifying Unencumbered Project to execute and deliver to the Administrative
Agent a joinder in the Subsidiary Guaranty in the form of Exhibit A
attached to the form of Subsidiary Guaranty.  Borrower covenants and agrees
that each Subsidiary which it shall cause to execute the Subsidiary Guaranty
shall be fully authorized to do so by its supporting organizational and
authority documents and shall be in good standing in its state of organization
and shall have obtained any necessary foreign qualifications required to
conduct its business.  

6.22         
Intellectual Property

.  To the best
knowledge of Borrower, Borrower and each Subsidiary of Borrower owns or has the
right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, trade names, trade
name rights, trade secrets and copyrights (collectively, “Intellectual
Property”) necessary to the conduct of its 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 proprietary right of any other Person.  To the best
knowledge of Borrower, Borrower and each other Subsidiary have taken all such
steps as they deem reasonably necessary to protect their respective rights
under and with respect to such Intellectual Property.

ARTICLE
VII

COVENANTS

During the term of this Agreement the following shall
apply, unless the Required Lenders shall otherwise consent in writing:

7.1             
Financial Reporting

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

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

(b)              
As soon as available, but in any
event not later than 90 days after the close of each fiscal year, audited
financial statements, including a consolidated balance sheet as at the end of
such year and the related consolidated statements of income and retained
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, without a “going concern”
or like qualification or exception, prepared by independent certified public accountants
of nationally recognized standing reasonably acceptable to the Administrative
Agent and Lenders (PriceWaterhouse Coopers and the other big four firms are
pre-approved), plus annual cash flow projections of the Borrower and annual
budgets and forecasts for the Consolidated Group;

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(c)               
Together with the quarterly and
annual financial statements required hereunder, a compliance certificate, in
substantially the form of Exhibit B attached hereto (a “Compliance
Certificate”) signed by the Borrower’s chief financial officer or chief
executive officer showing the calculations and computations necessary to
determine compliance with this Agreement and stating that, to such officer’s
knowledge, no Event of Default or Potential Default exists, or if, to such officer’s
knowledge, any Event of Default or Potential Default exists, stating the nature
and status thereof.  The Compliance Certificate may address both this
Agreement as well as the Revolving Credit Agreement; 

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

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

(f)               
As soon as possible and in any
event within 10 days after receipt by an executive officer of the Borrower, a
copy of (i) any notice or claim from any Governmental Authority to the effect
that the Borrower or any of its Subsidiaries is or may be liable to any Person
as a result of the release by the Borrower, any of its Subsidiaries, or any
other Person of any Material of Environmental Concern into the environment,
(ii) any notice of litigation or alleging any violation of any federal, state
or local environmental, health or safety law or regulation by the Borrower or
any of its Subsidiaries, which would have a Material Adverse Effect, (iii) any
notice of any Lien on any Qualifying Unencumbered Project (other than Permitted
Liens) or any Lien on any other Project (other than Permitted Liens) that would
reasonably be expected to have a Material Adverse Effect, (iv) any notice of
default on any (x) Recourse Indebtedness that exceeds $5,000,000 individually
or in the aggregate, and (y) Non-Recourse Indebtedness that exceeds $25,000,000
individually or in the aggregate, (v) any notice of default on interest rate
hedge agreements, and (vi) any other default under any obligations of any Loan
Party would reasonably be expected to have a Material Adverse Effect;

(g)              
Prior to the incurrence of any
Defeasance Costs in connection with the defeasance or prepayment of
Indebtedness in excess of $5,000,000, a written notice (to be delivered to the
Administrative Agent only) identifying such Indebtedness and the expected date
of defeasance or prepayment and containing an estimate of the types and amounts
of Defeasance Costs reasonably anticipated 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 that is privileged pursuant to the attorney-client
and/or work product privileges, such other information (including, without
limitation, financial and non-financial information and a listing of capital
expenditures, a rent roll, and such other information on any Project) as the
Administrative Agent or any Lender may from time to time reasonably request.

7.2             
Use of Proceeds

   

The Borrower shall use the proceeds of the Advances to refinance existing
Indebtedness and for its general corporate purposes. The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Advances (i) to purchase or carry
any “margin stock” (as defined in Regulation U) 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 the Capital Stock of any Person, unless
the board of directors or other manager of such Person has consented to such
offer, or (iii) to make any Acquisition other than a Permitted Acquisition.

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.   

7.3             
Notice of Default

.  The Borrower will
give, and will cause each of its Subsidiaries to give, prompt notice in writing
to the Administrative Agent and the 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 its Subsidiaries (other than those whose businesses
have been discontinued) to do all things necessary to remain duly incorporated
or duly qualified, validly existing and in good standing as a real estate
investment trust, corporation, limited liability company general partnership or
limited partnership, as the case may be, in its jurisdiction of
incorporation/formation (except with respect to permitted mergers and Permitted
Acquisitions) and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted and to carry on and
conduct their businesses in substantially the same manner as they are presently
conducted where the failure to do so could reasonably be expected to have a
Material Adverse Effect and, specifically, Borrower shall carry on all of its
business operations and investments through the Borrower and its Wholly-Owned
Subsidiaries, except as provided in Section 7.15 and subject to the
limitations set forth in Section 7.22(d). The activities of  the
Borrower and its Subsidiaries shall be limited primarily to (i) the
acquisition, development, ownership, management, operation and leasing of
income-producing, institutional-grade, multifamily residential properties, and
(ii) construction, development and other related activities conducted by
Borrower’s Wholly-Owned Subsidiary, Merit Enterprises, Inc.

7.5             
Taxes

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

7.6             
Insurance

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

7.7             
Compliance with Laws

.  The Borrower will,
and will cause each of its Subsidiaries to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
they may be subject, the violation of which could reasonably be expected to
have a Material Adverse Effect, 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 its Subsidiaries to, do all things necessary to maintain,
preserve, protect and keep their respective Properties and equipment in good
repair, working order and condition, ordinary wear and tear excepted.

7.9             
Inspection

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

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7.10         
Maintenance of Status

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

7.11         
Dividends

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

7.12         
No Change in Control

.  The Borrower will
not consent to a Change in Control.

7.13         
Non-Real Estate Investments

.  Borrower shall not
make any acquisition of non-real estate related assets or service companies
without the Administrative Agent’s approval.  Purchases of computers,
automobiles, furniture, office equipment and similar fixed assets used in the
normal course of business are permitted.

7.14         
Merger; Sale of Assets

.  The Borrower shall
not, nor will it permit any of its Subsidiaries to, without prior written approval
of the Administrative Agent and without providing a pro forma Compliance
Certificate showing the effects of such transaction, enter into any merger
(other than mergers in which such entity is the survivor and mergers of
Subsidiaries as part of transactions that are Permitted Acquisitions, provided
that following such merger the target entity becomes a Wholly-Owned Subsidiary
of Borrower), consolidation, reorganization or liquidation, except for such
transactions that occur between Wholly-Owned Subsidiaries. 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 excess of 20% of the then-current
Total Asset Value or (ii) dispose of in a single transaction real estate assets
which comprise 10% or more of the then-current Total Asset Value.

7.15         
Acquisitions and Investments

.  The Borrower will
not, nor will it permit any Subsidiary to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments 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 limits established in Section 7.22;

(c)               
Investments in existing
Subsidiaries, Investments in Subsidiaries formed for the purpose of developing
or acquiring Projects, and Investments in joint 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 the ownership, development, operation and
management of multifamily residential properties; and

- 40 -

 

 

(f)               
Interest Rate Hedges related to
hedging interest rates with respect to the Consolidated Outstanding
Indebtedness or the Indebtedness of Investment Affiliates.

provided
that, after giving effect to such Acquisitions and Investments, Borrower
continues to comply with all its covenants herein.  Acquisitions permitted
pursuant to this Section 7.15 shall be deemed to be “Permitted
Acquisitions”.

7.16         
Liens

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

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

(b)              
Liens imposed by law, such as
carriers’, warehousemen’s and mechanics’ liens and other similar liens arising
in the ordinary course of business which secure payment of obligations which
are being or will timely be contested in good faith by appropriate proceedings
and for which adequate reserves shall have been set aside on its books, if and
to the extent deemed reasonably necessary by Borrower;

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

(d)              
Easements, restrictions and such
other encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character and which
do not materially and adversely interfere with the use thereof in the business
of the Borrower or its Subsidiaries;

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

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

7.17         
Affiliates

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

7.18         
Recourse Secured Indebtedness

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

7.19         
Minimum Consolidated Tangible
Net Worth

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

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7.20         
Indebtedness and Cash Flow
Covenants

.  The Borrower shall
not permit:

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

(b)              
The ratio of Consolidated Adjusted
EBITDA to Consolidated Fixed Charges to be less than 1.50:1 as of the end of
any fiscal quarter ending on June 30, 2011 or at any time thereafter; 

(c)               
The ratio of Consolidated
Unsecured Indebtedness to Unencumbered Real Property Value to be greater than
0.60:1 as of the end of any fiscal quarter; 

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

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

7.21         
Environmental Matters

.  Borrower and its
Subsidiaries shall:

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

(b)              
Conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws, except to the extent that (i) the
same are being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect, or (ii) the Borrower has determined in good faith
that contesting the same is not in the best interests of the Borrower and its
Subsidiaries and the failure to contest the same could not be reasonably
expected to have a Material Adverse Effect.

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(c)               
Defend, indemnify and hold
harmless Administrative Agent and each Lender, and their respective officers
and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of the Borrower, its
Subsidiaries or the Projects, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
attorney’s and consultant’s fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of
the foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor.  This indemnity shall continue in full
force and effect regardless of the termination of this Agreement.  

(d)              
Defend each such
indemnified party by counsel selected by Borrower, subject to the reasonable
approval of the indemnified party, promptly after notice of any claims made
against an indemnified party hereunder.

7.22         
Permitted Investments

.

(a)               
The Borrower’s Investment in Real
Property Under Development (with each asset valued in accordance with GAAP at
cost, as incurred through the reporting date for construction in progress in
the most recent quarter of the Consolidated Group for which financial results
have been reported) shall not at any time exceed ten percent (10%) of Total
Asset Value.

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

(c)               
The Borrower’s Investment in First
Mortgage Receivables (with each asset valued at the lower of its acquisition
cost and its fair market value) 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 either income-producing, institutional-grade
multifamily properties or one of the Investments described in (a), (b), (c), or
(e) of this Section 7.22.

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

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

7.23         
Additional Unsecured
Indebtedness

.  Neither Borrower nor any other member of the
Consolidated Group shall incur any Indebtedness of a revolving nature other
than this Facility.  Neither Borrower nor any other member of the Consolidated
Group shall incur any other non-revolving unsecured Indebtedness other than
Indebtedness 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 permitted
only to the extent they are expressly subordinate to this Facility. 

7.24         
Limits on Ownership
Encumbrances

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. The Borrower will
not allow, or permit any member of the Consolidated Group to allow, its direct
or indirect ownership interests in any other member of the Consolidated Group
or any Investment Affiliate to be encumbered to secure any Indebtedness, other
than “mezzanine” Indebtedness of a member of the Consolidated Group provided
that such “mezzanine” Indebtedness is either (A) Non-Recourse Indebtedness
incurred for the purpose of financing the construction and development of  a
new Project  not to exceed $10,000,000, when aggregated with all other
construction and development “mezzanine” Indebtedness then outstanding or
committed, so long as such Indebtedness is not cross-collateralized or
cross-defaulted with other Indebtedness of any member of the Consolidated Group
or (B) created in connection with Indebtedness of a direct or indirect
Wholly-Owned Subsidiary of such member secured by a mortgage or deed of trust
on such Wholly-Owned Subsidiary’s real Property and initially held by the
lender under such secured Indebtedness or an Affiliate thereof. 

ARTICLE VIII

events
of DEFAULT

 

The occurrence
of any one or more of the following events shall constitute an Event of
Default:

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

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

8.3       The
breach of any of the 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.  

8.4       Any
representation or warranty made or deemed made by or on behalf of the Borrower
or any of its Subsidiaries to the Lenders or the Administrative Agent under or
in connection with this Agreement, or any material certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made, unless such matter is corrected
within thirty (30) days after written notice of such material falsity.

8.5       The breach by
the Borrower (other than a breach 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
Agreement which is not remedied within thirty (30) days after written notice to
Borrower from the Administrative Agent or any Lender.

8.6       The default
by the Borrower or any other member of the Consolidated Group or any Investment
Affiliate in the payment of any amount due under, or the performance of any
term, provision or condition contained in, any agreement with respect to (A)
any Recourse Indebtedness of the Borrower or any other member of the
Consolidated Group that exceeds $5,000,000 individually or in the aggregate, or
(B) any Non-Recourse Indebtedness of the Borrower or any other member of the
Consolidated Group or any Investment Affiliate having an outstanding principal
balance in excess of $25,000,000 in the aggregate (collectively, “Material
Indebtedness”) or any other event shall occur or condition exist, which causes
or permits any such Material Indebtedness to be due and payable or required to
be prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof. 

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

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

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

8.10     Failure to
remediate within the time period permitted by law or governmental order, after
all administrative hearings and appeals have been concluded (or within a
reasonable time in light of the nature of the problem if no specific time
period is so established), material environmental problems at Properties owned
by the Borrower or any of its Subsidiaries or Investment Affiliates if the
reasonably estimated costs of remediation are in excess of $10,000,000 in the
aggregate.

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

8.12     The Borrower, without obtaining consent of
the Required Lenders, shall enter into any merger, consolidation,
reorganization or liquidation or transfer or otherwise dispose of all or
substantially all of their Properties, unless (a) in the case of a merger or
consolidation the Borrower is the surviving entity in such merger or
consolidation and (b) after giving effect to the merger, the Borrower remains
in compliance with the terms of the Credit Agreement, provided that any such
action shall not constitute an Event of Default unless the Borrower shall fail
to reverse such action within sixty (60) days after written notice from the
Administrative Agent that such action constitutes an Event of Default
hereunder.

ARTICLE IX

ACCELERATION,
WAIVERS, AMENDMENTS AND REMEDIES

9.1             
Acceleration

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.  If any Event of Default
described in Section 8.7 or 8.8 occurs with respect to the
Borrower, the obligations of the Lenders to make Loans and hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Administrative Agent
or any Lender.  If any other Event of Default occurs, so long as an Event of
Default exists Lenders shall have no obligation to make any Loans and the
Required Lenders, at any time prior to the date that such Event of Default has
been fully cured, may permanently terminate the obligations of the Lenders to
make Loans hereunder and declare the Obligations to be due and payable, or
both, whereupon if the Required Lenders elected to accelerate (i) the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives and (ii) if any automatic or optional acceleration has
occurred, the Administrative Agent, as directed by the Required Lenders (or if
no such direction is given within 30 days after a request for direction, as the
Administrative Agent deems in the best interests of the Lenders, in its sole
discretion), shall use its good faith efforts to collect, including without
limitation, by filing and diligently pursuing judicial action, all amounts owed
by the Borrower and any Subsidiary Guarantor under the Loan Documents.

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

            9.2             
Amendments

.  Subject to the
provisions of this Article IX, the Required Lenders (or the
Administrative Agent with the consent in writing of the Required Lenders) and
the Borrower may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or waiving any Event
of Default hereunder; provided, however, that no such supplemental agreement or
waiver shall, without the consent of all Lenders:

(a)               
Extend the Facility Termination
Date, or forgive all or any portion of the principal amount of any Loan or
accrued interest thereon, reduce the Applicable Margins (or modify any
definition herein which would have the effect of reducing the Applicable
Margins) or the interest rate or underlying interest rate options or extend the
time of payment of any such principal, interest or facility fees.

(b)              
Modify Section 7.20(c) or Section
7.20(d) or diminish any of the requirements for a Project to qualify as a
Qualifying Unencumbered Project (or modify any other definitions herein which
would have the effect of diminishing such requirements).

(c)               
Change the definition of Required
Lenders.

(d)              
Fund additional Advances hereunder
in excess of the Aggregate Commitment.

(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.

No
amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent.  If in connection with any
proposed waiver, amendment or modification referred to in Sections 9.2(a)
through 9.2(f) above, the consent of the Required Lenders is obtained
but the consent of one or more of such other Lenders whose consent is required
is not obtained (each a “Non-Consenting Lender”), then the Borrower shall have
the right to replace any such Non-Consenting Lender with one or more
replacement Lenders pursuant to Section 2.15. Notwithstanding anything
to the contrary in this Section 9.2, no such supplemental agreement or
waiver shall modify Section 7.12 or the definition of Change in Control
or delete or modify the reference to Section 7.12 which is contained in Section
8.3 without the consent of Lenders in the aggregate having at least 75% of
the Aggregate Commitment, or if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 75% of the aggregate unpaid principal
amount of the outstanding Advances.

                
 9.3             

Preservation of Rights

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.  No delay or
omission of the Lenders or the Administrative Agent to exercise any right under
the Loan Documents shall impair such right or be construed to be a waiver of
any Event of Default or an acquiescence therein, and the making of a Loan
notwithstanding the existence of an Event of Default or the inability of the
Borrower to satisfy the conditions precedent to such Loan shall not constitute
any waiver or acquiescence.  Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 9.2,
and then only to the extent in such writing specifically set forth.  All
remedies contained in the Loan Documents or by law afforded shall be cumulative
and all shall be available to the Administrative Agent and the Lenders until
the Obligations have been paid in 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 the Facility, and the outstanding principal balance of
the Facility, including accrued and unpaid interest thereon, shall be immediately
due and payable.

ARTICLE X

GENERAL
PROVISIONS

10.1         
Survival of Representations

.  All representations
and warranties of the Borrower contained in this Agreement shall survive
delivery of the Notes and the making of the Loans herein contemplated.

10.2         
Governmental Regulation

.  Anything contained
in this Agreement to the contrary notwithstanding, no Lender shall be obligated
to extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.

10.3         
No Plan Assets

.  None of the funds to be advanced by the Lenders
under 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 for convenience of reference only, and shall not govern
the interpretation of any of the provisions of the Loan Documents.

10.5         
Entire Agreement

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

10.6         
Several Obligations; Benefits
of this Agreement

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

10.7         
Expenses; Indemnification

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.  The Borrower shall
reimburse the Administrative Agent for any reasonable costs and actual
documented (reasonable evidence shall be provided for any expense over $500)
out-of-pocket expenses (including, without limitation, all reasonable fees for
consultants and fees and reasonable expenses for attorneys for the
Administrative Agent, which attorneys may not be employees of the
Administrative Agent) paid or incurred by the Administrative Agent in
connection with the amendment, modification, and enforcement of the Loan
Documents.  The Borrower also agrees to reimburse the Administrative Agent and
the Lenders for any reasonable costs, external charges and out-of-pocket
expenses (including, without limitation, all fees and reasonable expenses for
attorneys for the Administrative Agent and the Lenders, which attorneys may not
be employees of the Administrative Agent or the Lenders) paid or incurred by
the Administrative Agent or any Lender in connection with the collection and
enforcement of the Loan Documents (including, without limitation, any
workout).  The Borrower further agrees to indemnify the Administrative Agent,
each Lender and their Affiliates, and their directors and officers against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all reasonable fees and reasonable expenses for
attorneys of the indemnified parties, all reasonable expenses of litigation or
preparation therefor whether or not the Administrative Agent, or any Lender is
a party thereto) which any of them may pay or incur arising out of or relating
to this Agreement, the other Loan Documents, the Projects, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder, except to the extent that
any of the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor.  The obligations of the Borrower
under this Section shall survive the termination of this Agreement.  Defense of any such indemnified party shall be provided by
counsel selected by Borrower, subject to the reasonable approval of the
indemnified party, promptly after notice to Borrower of the indemnified claims.

10.8         
Electronic Document Deliveries

.  Documents required
to be delivered pursuant to the Loan Documents shall be delivered by electronic
communication and delivery, including, the Internet, e-mail or intranet
websites  to which the Administrative Agent and each Lender have access
(including a commercial, third-party website such as www.Edgar.com
<http://www.Edgar.com> or a website sponsored or hosted by the
Administrative Agent or the Borrower) provided that (A) the foregoing shall not
apply to notices to any Lender pursuant to Article II and (B) the Lender
has not notified the Administrative Agent or Borrower that it cannot or does
not want to receive electronic communications.   The Administrative Agent or
the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic delivery pursuant to procedures
approved by it for all or particular notices or communications.  Documents or
notices delivered electronically shall be deemed to have been delivered
twenty-four (24) hours after the date and time on which the Administrative
Agent or Borrower posts such documents or the documents become available on a
commercial website and the Administrative Agent or Borrower notifies each
Lender of said posting and provides a link thereto provided if such notice or
other communication is not sent or posted during the normal business hours of
the recipient, said posting date and time shall be deemed to have commenced as
of  9:00 a.m. on the opening of business on the next business day for the recipient. 
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificate to the
Administrative Agent and shall deliver paper copies of any documents to the
Administrative Agent or to any Lender that requests such paper copies until a
written request to cease delivering paper copies is given by the Administrative
Agent or such Lender.  Except for the Compliance Certificate Provision,  the
Administrative Agent shall have no obligation to request the delivery of or to
maintain paper copies of the documents delivered electronically, and in any
event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery.  Each Lender shall be solely responsible for
requesting delivery to it of paper copies and maintaining its paper or
electronic documents.  

10.9         
Accounting

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

10.10     
Severability of Provisions

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

10.11     
Nonliability of Lenders

.  The relationship between the Borrower, on the one
hand, and the Lenders and the Administrative Agent, on the other, shall be
solely that of borrower and lender.  Neither the Administrative Agent nor any
Lender shall have any fiduciary responsibilities to the Borrower.  Neither the
Administrative Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower’s business or operations.

10.12     
CHOICE OF LAW

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

10.13     
SUBMISSION TO JURISDICTION

.  THE BORROWER AND
EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
OHIO STATE COURT SITTING IN CLEVELAND AND ANY APPELLATE COURT FROM ANY THEREOF,
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION 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.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE, AFTER EXPIRATION OF ANY
APPEAL PERIODS APPLICABLE THERETO, AND MAY BE ENFORCED IN OTHER JURISDICTIONS
BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN
THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING LENDER MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.

10.14     
WAIVER OF VENUE

.  THE BORROWER AND
EACH OTHER LOAN PARTY IRREVOCABLY AND 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 ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO
IN SECTION 10.13.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT AND AGREES NOT ASSERT ANY SUCH DEFENSE.

10.15     
SERVICE OF PROCESS

.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 14.1.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY
HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

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10.16        WAIVER OF JURY TRIAL

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

ARTICLE XI

THE
ADMINISTRATIVE AGENT

11.1         
Appointment and Authority

.  Each of the Lenders
hereby irrevocably appoints PNC to act on its behalf as the Administrative
Agent hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  The provisions of this Section 11 are solely for the benefit
of the Administrative Agent and the Lenders, and neither the Borrower nor any
other Loan Party shall have rights as a third party beneficiary of any of such
provisions.

11.2         
Rights as a Lender

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

11.3         
Exculpatory Provisions

.  The Administrative
Agent shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents.  Without limiting the generality of the
foregoing, the Administrative Agent:

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

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

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

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The
Administrative Agent shall not be liable for any action taken or not taken by
it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 9.1 and 9.2) or (ii) in the
absence of its own gross negligence or willful misconduct.  The Administrative
Agent shall be deemed not to have knowledge of any Potential Default or Event
of Default unless and until notice describing such Potential Default or Event
of Default is given to the Administrative Agent by the Borrower or a Lender.

The
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Potential Default or Event of Default, (iv)
the validity, enforceability, effectiveness or genuineness of this Agreement,
any other Loan Document or any other agreement, instrument or document or (v)
the satisfaction of any condition set forth in Section 5  or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

11.4         
Reliance by Administrative
Agent

.  The Administrative
Agent shall be entitled to rely upon, 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 or other distribution) believed by it to be genuine
and to have been signed, sent or otherwise authenticated by the proper Person. 
The Administrative Agent also may rely upon any statement made to it orally or
by telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon.  In determining compliance with
any condition hereunder to the making of a Loan that by its terms must be
fulfilled to the satisfaction of a Lender, the Administrative Agent may presume
that such condition is satisfactory to such Lender unless the Administrative
Agent shall have received notice to the contrary from such Lender prior to the
making of such Loan.  The Administrative Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

11.5         
Delegation of Duties

.  The Administrative
Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more sub
agents appointed by the Administrative Agent.  The Administrative Agent and any
such sub agent may perform any and all of its duties and exercise its rights
and powers by or through their respective Related Parties.  The exculpatory
provisions of this Article XI shall apply to any such sub agent and to
the Related Parties of the Administrative Agent and any such sub agent, and
shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as
Administrative Agent.

11.6         
Resignation of Administrative
Agent

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.  The Administrative
Agent may at any time give notice of its resignation to the Lenders and the
Borrower.  Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, with approval from the Borrower (so long as no Event of
Default has occurred and is continuing), to appoint a successor, such approval
not to be unreasonably withheld or delayed.  If no such successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may on behalf
of the Lenders, appoint a successor Administrative Agent; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (i) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders under any of the Loan Documents, the retiring Administrative Agent
shall continue to hold such collateral security until such time as a successor Administrative
Agent is appointed) and (ii) all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this Section
11.6.  Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
Section).  The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor.  After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the
provisions of this Article XI and Section 10.7 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Administrative Agent was acting
as Administrative Agent.

Upon the
appointment of a successor Administrative Agent hereunder, such successor shall
(i) succeed to all of the rights, powers, privileges and duties of PNC as the
retiring Administrative Agent and PNC shall be discharged from all of its
respective duties and obligations as Administrative Agent under the Loan
Documents.

The
Administrative Agent may be removed as administrative agent by the Required
Lenders upon 30 days' prior written notice if the Administrative Agent (i)
shall have committed gross negligence or willful misconduct in the course of
performing its duties hereunder or (ii) has become or is insolvent or has
become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment.

11.7         
Non-Reliance on Administrative
Agent and Other Lenders

.  Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Lender
also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement 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 cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity as a Lender hereunder.

11.9         
No Reliance on Administrative
Agent’s Customer Identification Program

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

11.10     
Requests for Approval

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

11.11     
Defaulting Lenders

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

ARTICLE XII

SETOFF;
RATABLE PAYMENTS

12.1         
Setoff

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.  In addition to, and
without limitation of, any rights 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 or not collected or available) and any other Indebtedness at
any time held or owing by any Lender or any of its Affiliates to or for the
credit or account of the Borrower may be offset and applied toward the payment
of the Obligations owing to such Lender at any time prior to the date that such
Event of Default has been fully cured, whether or not the Obligations, or any
part hereof, shall then be due, provided that no Lender shall take such an
offset if such action could reasonably be deemed to constitute an election of
remedies under this Agreement that would in any way limit or impair any of the
other rights and remedies of the Administrative Agent and other Lenders
hereunder with respect to such Event of Default. Notwithstanding anything
herein to the contrary, the consent of the Required Lenders shall be required
prior to the exercise of setoff rights by any Lender.

12.2         
Ratable Payments

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

(a)               
if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, together with interest or other
amounts, if any, required by Law (including court 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 construed to apply to (x) any payment made by the Loan
Parties pursuant to and in accordance with the express terms of the Loan
Documents or (y) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in Advances to any assignee or participant, other than to the Borrower or any
Subsidiary thereof (as to which 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 Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against each Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of each Loan Party in the amount of such participation.

Any Lender that fails
at any time to comply with the provisions of this Section 12.2 shall be
deemed a Defaulting Lender until such time as it performs its obligations
hereunder and is not otherwise a Defaulting Lender for any other reason.  A
Defaulting Lender shall be deemed to have assigned any and all payments due to
it from the Borrower, whether on account of or relating to outstanding Loans,
interest, fees or otherwise, to the remaining non-defaulting Lenders for
application to, and reduction of, their respective Ratable Share of all
outstanding Loans and other unpaid Obligations of any of the Loan Parties.  The
Defaulting Lender hereby authorizes the Administrative Agent to distribute such
payments to the non-defaulting Lenders in proportion to their respective
Ratable Share of all outstanding Loans and other unpaid Obligations of any of
the Loan Parties to which such Lenders are entitled.  A Defaulting Lender shall
be deemed to have satisfied the provisions of this Section 12.2 when and
if, as a result of application of the assigned payments to all outstanding
Loans and other unpaid Obligations of any of the Loan Parties to the
non-defaulting Lenders, the Lenders’ respective Ratable Share of all
outstanding Loans and unpaid Obligations have returned to those in effect
immediately prior to such violation of this Section 12.2.

ARTICLE XIII

BENEFIT
OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

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13.1         
Successors and Assigns
Generally

.  The provisions of
this Agreement shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns permitted hereby, except
that neither the Borrower nor any other Loan Party may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of Section 13.2, (ii) by
way of participation in accordance with the provisions of Section 13.4,
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 13.6 (and any other attempted assignment or
transfer by any party hereto shall 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 the extent provided in Section 13.4
and, to the extent expressly contemplated hereby, the Related Parties of each
of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.   PNC Bank,
National Association, agrees to hold no less than ten percent (10%) of the
Aggregate Commitment for so long as it shall serve as the Administrative Agent
hereunder.  If an Event of Default should occur pursuant to the terms of this
Agreement, Administrative Agent shall 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 more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Loans at
the time owing to it); provided that any such assignment shall be subject to
the following conditions:

(a)               
Minimum Amounts.

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

(ii)              
in any case not described in
clause (a)(i) of this Section 13.2, the aggregate amount of the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
Agreement with respect to such assignment is delivered to the Administrative
Agent or, if “Trade Date” is specified in the Assignment and Assumption
Agreement, as of the Trade Date) shall not be less than $5,000,000, unless each
of the Administrative Agent and, so long as no Event of Default has occurred
and is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed).

(b)              
Proportionate Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan assigned.

(c)               
Required Consents.  No consent shall be required for any assignment
except for the consent of the Administrative Agent (which shall not be unreasonably
withheld).  Such consent of the Administrative Agent shall be given or withheld
within ten (10) Business Days after the Administrative Agent’s receipt of a
Lender’s written request for such consent.  The consent of the Borrower (which
shall not be unreasonably withheld or delayed) shall be required unless (x) an
Event of Default has occurred and is continuing at the time of such assignment
or (y) such assignment is to a Lender or an Affiliate of a Lender.

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

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

(f)               
No Assignment to Natural
Persons.  No such assignment shall be
made to a natural person.

Subject to acceptance
and recording thereof by the Administrative Agent pursuant to Section 13.3,
from and after the effective date specified in each Assignment and Assumption
Agreement, the assignee thereunder shall be a party to this Agreement and, to
the extent of the interest assigned by such Assignment and Assumption
Agreement, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest assigned
by such Assignment and Assumption Agreement, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption
Agreement covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 4.4, 4.1 and 10.7
with respect to facts and circumstances occurring prior to the effective date
of such assignment.  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 13.2
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation 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 or
assignments which result in PNC having no outstanding Advances hereunder, an
Event of Default shall have occurred, PNC shall promptly resign as
Administrative Agent and a replacement Administrative Agent shall be selected
as provided in Section 11.6 above, 

13.3         
Register

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

13.4         
Participations

.  Any Lender may at
any time, without the consent of, or notice to, the Borrower or the
Administrative Agent, sell participations to any Person (other than a natural
person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of the
Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement.

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Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver with respect to Sections 9.2(a) or 9.2(d).  
Subject to the other provisions of this Article XIII, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections
4.4 and 4.1 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 13.2, provided
however that if such Participant makes a claim under such Sections 4.4 or 4.1,
such Participant shall be subject to replacement at the direction of the
Borrower under Section 2.15 as if such Participant were a Lender.  To
the extent permitted by Law, each Participant also shall be entitled to the
benefits of Section 12.1 as though it were a Lender; provided such
Participant agrees to be subject to Section 12.2 as though it were a
Lender. 

13.5         
Limitations upon Participant
Rights Successors and Assigns Generally

.  A Participant shall
not be entitled to receive any greater payment under Sections 4.1, 4.2
or 10.7 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a Foreign Lender if it were a Lender
shall not be entitled to the benefits of Section 4.2 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 4.2 as
though it were a Lender.

13.6         
Certain Pledges; Successors and
Assigns Generally

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

13.7         
Confidentiality

.

(a)               
General

.  Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information, except that Information may be disclosed (i) to its Affiliates
and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and other representatives (it being understood that
the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (ii) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (iii)
to the extent required by 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 any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (vi) subject to an agreement
containing provisions substantially the same as those of this Section, to (A)
any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (B)
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (vii) with
the consent of the Borrower or (viii) to the extent such Information (Y)
becomes publicly available other than as a result of a breach of this Section
or (Z) becomes available to the Administrative Agent, any Lender, or any of
their respective Affiliates on a nonconfidential basis from a source other than
the Borrower or the other Loan Parties.  Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

(b)              
Sharing Information With
Affiliates of the Lenders

- 57 -

 

 

 

 

 

 

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

ARTICLE
XIV

NOTICES

14.1         
Giving Notice

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

14.2         
Change of Address

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

ARTICLE XV

PATRIOT
ACT

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

ARTICLE XVI

COUNTERPARTS

This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement
and the other Loan Documents, and any separate letter agreements with respect
to fees payable to the Administrative Agent, constitute the entire contract
among the parties relating to the subject matter hereof and supersede any and
all previous agreements and understandings, oral or written, relating to the
subject matter hereof including any prior confidentiality agreements and
commitments.  Except as provided in Article V, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and 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 by
telecopy or e-mail shall be effective as delivery of a manually executed
counterpart of this Agreement.

- 58 -

 

 

 

 

 

 

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

ASSOCIATED ESTATES REALTY CORPORATION, an
Ohio corporation

 

 

By:       
/s/ Bradley Van Auken                         

Name:  
Bradley Van Auken                             

Title:     Vice President and General
Counsel    

 

1 AEC Parkway

Richmond Heights, OH  44143

                                                Attention: 
Vice President and General Counsel

                                               
Telephone:  (216) 797-8785

Facsimile:   (216) 797-8719

 

S-1

 

 

 

 

 

 

COMMITMENT:                                             PNC
BANK, NATIONAL ASSOCIATION, 

$30,000,000                                                    Individually
and as Administrative Agent

 

 

By:       /s/ John E. Wilgus, II                            

Name:  John E. Wilgus, II                                

Title:    Senior
Vice President, Real Estate Banking

 

PNC
Real Estate

1900
East Ninth Street - 22nd Floor

Mail
Stop:  B7-YB13-22-1

Cleveland,
OH  44114

Phone:       216-222-6032

Facsimile:  216-222-6070                    

Attention:   John
E. Wilgus, II

                  Senior
Vice President

                  Real
Estate Banking

                                    

S-2

 

 

 

 

 

 

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

$30,000,000                                                    Syndication
Agent

 

 

By:       /s/ Antoinette G. Perry                         

Name:  Antoinette G. Perry                              

Title:    Vice
President                                      

200
Public Square

Suite
3200

Cleveland,
OH  44114

Attention: 
Toni G. Perry

Phone:       216-344-6946

Facsimile:  216-344-6971

S-3

 

 

 

 

 

 

COMMITMENT:                                             U.S.
BANK NATIONAL ASSOCIATION, 

$25,000,000                                                    a
national banking association, individually and as Documentation Agent

                                                                        

 

By:       /s/ Curt M. Steiner                                

Name:  Curt M. Steiner

Title:    Senior
Vice President

U.S.
Bank National Association

209
South LaSalle Street, Suite 210

Chicago,
IL 60604

Attention: 
Curt M. Steiner, Senior Vice President

Phone:       312-325-8756

Facsimile:  312-325-8853

S-4

 

 

 

 

 

 

COMMITMENT:                                             RAYMOND
JAMES BANK, FSB

$13,750,000

 

 

By:       /s/ James M. Armstrong                       

Name:  James M. Armstrong

Title:    Vice
President

710 Carillon Parkway

St. Petersburg, FL  33716

Attention:  James M. Armstrong

Phone:       727-567-7919

Facsimile: 
866-205-1396

 

 

S-5

 

 

 

 

 

 

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

$13,750,000                                                    

 

By:       /s/ Erin L. Mahon                                 

Name:  Erin L. Mahon

Title:    Vice
President

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

1215
Superior Avenue, OH S675

Cleveland,
OH  44114

Attention:
 Samuel A. Bluso

Phone:       216-277-0388

Facsimile:  216-277-4600

 

 

 

S-6

 

 

 

 

 

 

COMMITMENT:                                             CITIBANK, N.A.

$12,500,000                                                    

 

By:       /s/ John C. Rowland                             

Name:  John C. Rowland

Title:    Vice
President                                      

 

Citibank,
N.A.

388
Greenwich Street, 23rd Floor

New
York, NY  10013

Attention: 
Rita C. Lai

Phone:       212-723-5931

Facsimile:  212-723-8550

 

 

 

S-7

 

 

 

 

 

 

EXHIBIT A

 

FORM OF NOTE

 

 

____________, 20____

 

 

Associated
Estates Realty Corporation, 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 Lender to the Borrower pursuant to Article II of the
Term Loan Agreement (as the same may be amended or modified, the “Agreement”)
hereinafter referred to, in immediately available funds at the main office of
PNC Bank, National Association in Cleveland, Ohio, as Administrative Agent,
together with interest on the unpaid principal amount hereof at the rates and
on the dates set forth in the Agreement.  The Borrower shall pay remaining
unpaid principal of and accrued and unpaid interest on the Loans in full on the
Facility Termination Date or such earlier date as may be required under the Agreement.

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

This Note is
one of the Notes issued pursuant to, and is entitled to the benefits of the
Term Loan Agreement, dated as of ____________, 2011 among the Borrower, PNC
Bank, National Association, individually and as Administrative Agent, and the
other Lenders named therein, to which Agreement, as it may be amended from time
to time, reference is hereby made for a statement of the terms and conditions
governing this Note, including the terms and conditions under which this Note
may be prepaid or its maturity date accelerated.  Capitalized terms used herein
and not otherwise defined herein are used with the meanings attributed to them
in the Agreement.

If there is an
Event of Default under the Agreement or any other Loan Document and
Administrative Agent exercises the remedies provided under the Agreement and/or
any of the Loan Documents for the Lenders, then in addition to all amounts
recoverable by the Administrative Agent and the Lenders under such documents,
the Administrative Agent and the Lenders shall be entitled to receive
reasonable attorneys fees and expenses incurred by the Administrative Agent and
the Lenders in connection with the exercise of such remedies.

Borrower and
all endorsers severally waive presentment, protest and demand, notice of
protest, demand and of dishonor and nonpayment of this Note, and any and all
lack of diligence or delays in collection or enforcement of this Note, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security for this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the Borrower and any endorsers hereof.

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

A-1

 

 

 

 

 

 

 

BORROWER AND
LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS NOTE
OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR ARISING FROM THE LENDING
RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND AGREE THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE A JURY.

 

ASSOCIATED ESTATES
REALTY CORPORATION,

a n Ohio corporation

 

 

By:                                                       

Name: 
                                                

Title:   
                                                

 

A-2

 

 

 

 

 

 

 

 

SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL

TO

NOTE OF ASSOCIATED ESTATES REALTY
CORPORATION

DATED ___________, 2011

 

 

                                                                                               Maturity

                           Principal                   Maturity                     Principal

                           Amount
of                of Interest                   Amount                       Unpaid

Date                    Loan                         Period                         Paid                             Balance

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

 

______________________________________________________________________________ 

A-3

 

 

 

 

 

 

 

EXHIBIT B

 

COMPLIANCE CERTIFICATE

 

 

PNC Bank, National Association, as Administrative
Agent

Investment Real Estate

1900 East Ninth Street - 22nd Floor

Mail Stop:  B7-YB13-22-1

Cleveland, OH  44114

 

 

	
  Re:

  	
  Term Loan Agreement dated
  as of [________, 2011] (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 (the “Term
  Lenders”).

   

  Amended and Restated Credit
  Agreement dated as of October 18, 2010 (as amended, modified, supplemented,
  restated, or renewed, from time to time, together with the Term Agreement,
  the “Agreement”) between ASSOCIATED
  ESTATES REALTY CORPORATION (the “Borrower”), and PNC BANK, NATIONAL
  ASSOCIATION, as Administrative Agent for itself and the other lenders parties
  thereto from time to time (together with the Term Lenders, the “Lenders”).

  

 

Reference is made to the
Agreement.  Capitalized terms used in this Certificate (including schedules and
other attachments hereto, this “Certificate”) without definition have the
meanings specified in the Agreement.

Pursuant to applicable
provisions of the Agreement, Borrower hereby certifies to the Lenders that the
information furnished in the attached schedules, including, without limitation,
each of the calculations listed below are true, correct and complete in all
material respects as of the last day of the fiscal periods subject to the
financial statements and associated covenants being delivered to the Lenders
pursuant to the Agreement together with this Certificate (such statements the
“Financial Statements” and the periods covered thereby 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 computations evidencing 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 has reviewed the terms of the Agreement,
including, but not limited to, the representations and warranties of the
Borrower set forth in the Agreement and the covenants of the Borrower set forth
in the Agreement, and has made, or caused to be made under his or her
supervision, a review in reasonable detail of the transactions and condition of
the Borrower through the reporting periods.

B-1

 

 

 

 

 

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

4.         Covenants. 
To the Borrower’s actual knowledge, during the reporting period, the Borrower
observed and performed all of the respective covenants and other agreements
under the Agreement and the Loan Documents, and satisfied each of the
conditions contained therein to be observed, performed or satisfied by the
Borrower, except as expressly noted on Schedule B hereto.

5.         No Default. 
To the Borrower’s actual knowledge, no Event of Default exists as of the date
hereof or existed at any time during the reporting period, except as expressly
noted on Schedule B hereto.

IN WITNESS WHEREOF, this
Certificate is executed by the undersigned this ___ day of [________, 20_____].

ASSOCIATED
ESTATES REALTY CORPORATION,

an
Ohio corporation

 

 

By:                                                                         

Name:                                                                    

Title:                                                                      

B-2

 

 

 

 

 

SCHEDULE A

 

FINANCIAL DATA AND COMPUTATIONS

 

B-3

 

 

 

 

 

EXHIBIT C

 

FORM OF

ASSIGNMENT AND ASSUMPTION

 

This Assignment and
Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee]
(the “Assignee”).  Capitalized terms used but not defined herein shall
have the meanings given to them in the Term Loan Agreement identified below 
(as amended, the “Term Loan Agreement”), receipt of a copy of which is
hereby acknowledged by the Assignee.  The Standard Terms and Conditions set
forth in Annex 1 attached hereto are hereby agreed to and incorporated herein
by reference and made a part of this Assignment and Assumption as if set forth
herein in full.

For an agreed
consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Term Loan Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Term Loan Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including without limitation any letters of
credit, guarantees, and swing loans included in such facilities) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Term Loan Agreement, any other documents or instruments delivered
pursuant thereto or the loan transactions governed thereby or in any way based
on or related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to herein collectively
as, the “Assigned Interest”).  Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

1.         Assignor:                                 ______________________________

 

2.         Assignee:                                 ______________________________

                                                            [and
is an Affiliate of [identify Lender][1]]

 

3.         Borrower(s):                            ______________________________

 

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

 

5.         Term Loan Agreement:            The Term
Loan Agreement dated as of [______, 2011] among           Associated Estates
Realty Corporation, the Lenders parties thereto, PNC Bank, National
Association, as Administrative Agent, and the other agents parties thereto

 

                                                                           C-1

 

 

6.          Assigned Interest:        

 

	
  Facility Assigned

  	
  Aggregate Amount of Loans for all Lenders*

  	
  Amount of Loans Assigned*

  	
  Percentage Assigned of Loans[2]

  
	
   

  	
  $

  	
  $

  	
              %

  
	
   

  	
  $

  	
  $

  	
              %

  
	
   

  	
  $

  	
  $

  	
              %

  

 

[7.        Trade
Date:                  ______________][3]

 

                                                                                                    C-2

 

 

 

 

 

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

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

                                                                        ASSIGNOR

                                                                        [NAME
OF ASSIGNOR]

 

                                                                        By:______________________________

                                                                          
Title:

 

                                                                        ASSIGNEE

                                                                        [NAME
OF ASSIGNEE]

 

                                                                        By:______________________________

                                                                          
Title:

[Consented to and][4]
Accepted:

 

PNC Bank, National
Association, 

as Administrative Agent

 

By_________________________________

  Title:

 

[Consented to:][5]

 

Associated Estates Realty
Corporation

 

By________________________________

 
Title:                                                                                       C-2

 

 

 

 

 

ANNEX 1

 

[__________________][6]

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

                        1.  Representations
and Warranties.  

 

                        1.1  
Assignor.  The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Term Loan Agreement or any other Loan Document[7],
(ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii)
the financial condition of the Borrower, any of its Subsidiaries or Affiliates
or any other Person obligated in respect of any Loan Document or (iv) the
performance or observance by the Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document.

 

                        1.2. 
Assignee.  The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Term Loan Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Term Loan Agreement (subject to
receipt of such consents as may be required under the Term Loan Agreement),
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Term Loan Agreement as a Lender thereunder and, to the extent of the
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it
has received a copy of the Term Loan Agreement, together with copies of the
most recent financial statements delivered pursuant to [Section ___] thereof,
as applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender[8],
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Term Loan Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

                        2.   Payments.   
From and after the Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have
accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.[9]

                                                                            C-3

 

 

 

 

 

 

                        3.  General
Provisions. This Assignment and Assumption shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and
assigns.  This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of
this Assignment and Assumption by telecopy
shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.

 

                                                                            C-4

 

 

 

 

 

EXHIBIT D

 

SUBSIDIARY GUARANTY

This Guaranty
is made as of [________, 2011] by the parties identified in the signature pages
thereto, and any joinder to this Guaranty hereafter delivered (collectively,
the “Subsidiary Guarantors”), to and for the benefit of PNC Bank,
National Association, individually (“National City”) and as administrative
agent (“Administrative Agent”) for itself and the lenders under the Term
Loan Agreement (as defined below) and their respective successors and assigns
(collectively, the “Lenders”).

RECITALS

A.        Associated
Estates Realty Corporation, a corporation organized under the laws of the State
of Ohio (“Borrower”), and Subsidiary Guarantors have requested that the
Lenders make a term loan available to Borrower in an aggregate principal amount
of $125,000,000 (the “Facility”).

B.         The
Lenders have agreed to make available the Facility to Borrower pursuant to the
terms and conditions set forth in an Term Loan Agreement of even date herewith
among Borrower, National City, individually, and as Administrative Agent, and
the Lenders named therein (as amended, modified or restated from time to time,
the “Term Loan Agreement”).  All capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the Term
Loan Agreement.

C.         Borrower
has executed and delivered or will execute and deliver to the Lenders
promissory notes in the principal amount of each Lender’s Loan as evidence of
Borrower’s indebtedness to each such Lender with respect to the Facility (the
promissory notes described above, together with any amendments or allonges
thereto, or restatements, replacements or renewals thereof, and/or new
promissory notes to new Lenders under the Term Loan Agreement, are collectively
referred to herein as the “Notes”).

D.        Subsidiary
Guarantors are subsidiaries of Borrower.  Subsidiary Guarantors acknowledge
that the extension of credit by the Administrative Agent and the Lenders to
Borrower pursuant to the Term Loan Agreement will benefit Subsidiary Guarantors
by making funds available to Subsidiary Guarantors through Borrower and by enhancing
the financial strength of the consolidated group of which Subsidiary Guarantors
and Borrower are members.  The execution and delivery of this Guaranty by
Subsidiary Guarantors are conditions precedent to the performance by the
Lenders of their obligations under the Term Loan Agreement.

AGREEMENTS

NOW, THEREFORE,
Subsidiary Guarantors, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part
hereof, and for other good and valuable consideration, hereby agree as follows:

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

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

                                                                           
D-1

 

 

 

 

 

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

(c)        the full, complete, and punctual observance, performance,
and satisfaction of all of the obligations, duties, covenants, and agreements
of Borrower under the Term Loan Agreement and the Loan Documents.

All
amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this Paragraph 1 are referred to
herein as the “Facility Indebtedness.”  All obligations described in
subparagraph (c) of this Paragraph 1 are referred to herein as
the “Obligations.”  Subsidiary Guarantors and Lenders agree that
Subsidiary Guarantors’ obligations hereunder shall not exceed the greater of: 
(i) the aggregate amount of all monies received, directly or indirectly,
by Subsidiary Guarantors from Borrower after the date hereof (whether by loan,
capital infusion or other means), or (ii) the maximum amount of the
Facility Indebtedness not subject to avoidance under Title 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, to the extent such
obligations would otherwise be subject to avoidance under the Bankruptcy Code
if Subsidiary Guarantors are not deemed to have received valuable
consideration, fair value or reasonably equivalent value for its obligations
hereunder, each Subsidiary Guarantor’s obligations hereunder shall be reduced
to that amount which, after giving effect thereto, would not render such
Subsidiary Guarantor insolvent, or leave such Subsidiary Guarantor with an
unreasonably small capital to conduct its business, or cause such Subsidiary
Guarantor to have incurred debts (or intended to have incurred debts) beyond
its ability to pay such debts as they mature, as such terms are determined, and
at the time such obligations are deemed to have been incurred, under the
Bankruptcy Code.  In the event a Subsidiary Guarantor shall make any payment or
payments under this Guaranty each other Subsidiary Guarantor of the Facility
Indebtedness shall contribute to such Subsidiary Guarantor an amount equal to
such non-paying Subsidiary Guarantor’s pro rata share (based on their
respective maximum liabilities hereunder) of such payment or payments made by
such Subsidiary Guarantor, provided that such contribution right shall be
subordinate and junior in right of payment in full of all the Facility
Indebtedness to Lenders.

2.         In the event of
any default by Borrower in making payment of the Facility Indebtedness, or in
performance of the Obligations, as aforesaid, in each case beyond the
expiration of any applicable grace period, Subsidiary Guarantors agree, on
demand by the Administrative Agent or the holder of a Note, to pay all the
Facility Indebtedness and to perform all the Obligations as are then or thereafter
become due and owing or are to be performed under the terms of the Notes, the
Term Loan Agreement, and the other Loan Documents.

                                                                           
D-2

 

 

 

 

 

3.         Subsidiary
Guarantors do hereby waive (i) notice of acceptance of this Guaranty by
the Administrative Agent and the Lenders and any and all notices and demands of
every kind which may be required to be given by any statute, rule or law,
(ii) any defense, right of set-off or other claim which Subsidiary
Guarantors may have against Borrower or which Subsidiary Guarantors or Borrower
may have against the Administrative Agent or the Lenders or the holder of a
Note, (iii) presentment for payment, demand for payment (other than as
provided for in Paragraph 2 above), notice of nonpayment (other than as
provided for in Paragraph 2 above) or dishonor, protest and notice of
protest, diligence in collection and any and all formalities which otherwise
might be legally required to charge Subsidiary Guarantors with liability,
(iv) any failure by the Administrative Agent and the Lenders to inform
Subsidiary Guarantors of any facts the Administrative Agent and the Lenders may
now or hereafter know about Borrower, the Facility, or the transactions
contemplated by the Term Loan Agreement, it being understood and agreed that
the Administrative Agent and the Lenders have no duty so to inform and that
Subsidiary Guarantors are fully responsible for being and remaining informed by
Borrower of all circumstances bearing on the existence or creation, or the risk
of nonpayment of the Facility Indebtedness or the risk of nonperformance of the
Obligations, and (v) any and all right to cause a marshalling of assets of
Borrower or any other action by any court or governmental body with respect
thereto, or to cause the Administrative Agent and the Lenders to proceed
against any other security given 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 Borrower without notice to or authorization from
Subsidiary Guarantors, regardless of the financial or other condition of
Borrower at the time of any such grant or continuation.  The Administrative
Agent and the Lenders shall have no obligation to disclose or discuss with
Subsidiary Guarantors the Lenders’ assessment of the financial condition of
Borrower.  Subsidiary Guarantors acknowledge that no representations of any
kind whatsoever have been made by the Administrative Agent and the Lenders to
Subsidiary Guarantors.  No modification or waiver of any of the provisions of
this Guaranty shall be binding upon the Administrative Agent and the Lenders
except as expressly set forth in a writing duly signed and delivered on behalf
of the Administrative Agent and the Lenders.  Subsidiary Guarantors further
agree that any exculpatory language contained in the Term Loan Agreement, the
Notes, and the other Loan Documents shall in no event apply to this Guaranty,
and will not prevent the Administrative Agent and the Lenders from proceeding
against Subsidiary Guarantors to enforce this Guaranty.

4.         Subsidiary
Guarantors further agree that Subsidiary Guarantors’ liability as guarantor
shall in no way be impaired by any renewals or extensions which may be made
from time to time, with or without the knowledge or consent of Subsidiary Guarantors
of the time for payment of interest or principal under a Note or by any
forbearance or delay in collecting interest or principal under a Note, or by
any waiver by the Administrative Agent and the Lenders under the Term Loan
Agreement, or any other Loan Documents, or by the Administrative Agent or the
Lenders’ failure or election not to pursue any other remedies they may have
against Borrower, or by any change or modification in a Note, the Term Loan
Agreement, or any other Loan Documents, or by the acceptance by the
Administrative Agent or the Lenders of any security or any increase,
substitution or change therein, or by the release by the Administrative Agent
and the Lenders of any security or any withdrawal thereof or decrease therein,
or by the application of payments received from any source to the payment of
any obligation other than the Facility Indebtedness, even though a Lender might
lawfully have elected to apply such payments to any part or all of the Facility
Indebtedness, it being the intent hereof that Subsidiary Guarantors shall
remain liable as principal for payment of the Facility Indebtedness and
performance of the Obligations until all indebtedness has been paid in full and
the other terms, covenants and conditions of the Term Loan Agreement, and other
Loan Documents and this Guaranty have been performed, notwithstanding any act
or thing which might otherwise operate as a legal or equitable discharge of a
surety.  Subsidiary Guarantors further understand and agree that the Administrative
Agent and the Lenders may at any time enter into agreements with Borrower to
amend and modify a Note, the Term Loan Agreement or any of the other Loan
Documents, or any other documents related thereto, and may waive or release any
provision or provisions of a Note, the Term Loan Agreement, or any other Loan
Document and, with reference to such instruments, may make and enter into any
such agreement or agreements as the Administrative Agent, the Lenders and
Borrower may deem proper and desirable, without in any manner impairing this
Guaranty or any of the Administrative Agent and the Lenders’ rights hereunder
or any of Subsidiary Guarantors’ obligations hereunder.

                                                                           
D-3

 

 

 

 

 

5.         This is an
absolute, unconditional, complete, present and continuing guaranty of payment
and performance and not of collection.  Subsidiary Guarantors agree that its
obligations hereunder shall be joint and several with any and all other
guarantees given in connection with the Facility from time to time.  Subsidiary
Guarantors agree that this Guaranty may be enforced by the Administrative Agent
and the Lenders without the necessity at any time of resorting to or exhausting
any security or collateral, if any, given in connection herewith or with a
Note, the Term Loan Agreement, or any of the other Loan Documents or by or
resorting to any other guaranties, and Subsidiary Guarantors hereby waive the
right to require the Administrative Agent and the Lenders to join Borrower in
any action brought hereunder or to commence any action against or obtain any
judgment against Borrower or to pursue any other remedy or enforce any other
right.  Subsidiary Guarantors further agree that nothing contained herein or
otherwise shall prevent the Administrative Agent and the Lenders from pursuing
concurrently or successively all rights and remedies available to them at law
and/or in equity or under a Note, the Term Loan Agreement or any other Loan
Documents, and the exercise of any of their rights or the completion of any of
their remedies shall not constitute a discharge of any of Subsidiary
Guarantors’ obligations hereunder, it being the purpose and intent of
Subsidiary Guarantors that the obligations of such Subsidiary Guarantors
hereunder shall be primary, absolute, independent and unconditional under any
and all circumstances whatsoever.  Neither Subsidiary Guarantors’ obligations
under this Guaranty nor any remedy for the enforcement thereof shall be
impaired, modified, changed or released in any manner whatsoever by any
impairment, modification, change, release or limitation of the liability of
Borrower under a Note, the Term Loan Agreement or any other Loan Document or by
reason of Borrower’s bankruptcy or by reason of any creditor or bankruptcy
proceeding instituted by or against Borrower.  This Guaranty shall continue to
be effective and be deemed to have continued in existence or be reinstated (as
the case may be) if at any time payment of all or any part of any sum payable
pursuant to a Note, the Term Loan Agreement or any other Loan Document is
rescinded or otherwise required to be returned by the payee upon the
insolvency, bankruptcy, or reorganization of the payor, all as though such
payment to such Lender had not been made, regardless of whether such Lender
contested the order requiring the return of such payment.  The obligations of
Subsidiary Guarantors pursuant to the preceding sentence shall survive any
termination, cancellation, or release of this Guaranty.

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

7.         If: 
(i) this Guaranty, a Note, or any of the Loan Documents are placed in the
hands of an attorney for collection or is collected through any legal
proceeding; (ii) an attorney is retained to represent the Administrative
Agent or any Lender in any bankruptcy, reorganization, receivership, or other
proceedings affecting creditors’ rights and involving a claim under this
Guaranty, a Note, the Term Loan Agreement, or any Loan Document; (iii) an
attorney is retained to enforce any of the other Loan Documents or to provide
advice or other representation with respect to the Loan Documents in connection
with an enforcement action or potential enforcement action; or (iv) an
attorney is retained to represent the Administrative Agent or any Lender in any
other legal proceedings whatsoever in connection with this Guaranty, a Note,
the Term Loan Agreement, any of the Loan Documents, or any property subject
thereto (other than any action or proceeding brought by any Lender or participant
against the Administrative Agent alleging a breach by the Administrative Agent
of its duties under the Loan Documents), then Subsidiary Guarantors shall pay
to the Administrative Agent or such Lender upon demand all reasonable
attorney’s fees, costs and expenses, including, without limitation, court
costs, filing fees and all other costs and expenses incurred 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 provision in this Guaranty comports with all applicable
local, state and federal laws and judicial decisions.  However, if any
provision or provisions, or if any portion of any provision or provisions, in
this Guaranty is found by a court of law to be in violation of any applicable
local, state or federal ordinance, statute, law, administrative or judicial
decision, or public policy, and if such court should declare such portion,
provision or provisions of this Guaranty to be illegal, invalid, unlawful, void
or unenforceable as written, then it is the intent of all parties hereto that
such portion, provision or provisions shall be given force to the fullest
possible extent that they are legal, valid and enforceable, that the remainder
of this Guaranty shall be construed as if such illegal, invalid, unlawful, void
or unenforceable portion, provision or provisions were not contained therein,
and that the rights, obligations and interest of the Administrative Agent and
the Lender or the holder of a Note under the remainder of this Guaranty shall
continue in full force and effect.

                                                                           
D-4

 

 

 

 

 

9.         Any indebtedness
of Borrower to Subsidiary Guarantors now or hereafter existing is hereby
subordinated to the Facility Indebtedness.  Subsidiary Guarantors will not
seek, accept, or retain for Subsidiary Guarantors’ own account, any payment
from Borrower on account of such subordinated debt at any time when an Event of
Default or Potential Default exists under the Term Loan Agreement or the Loan
Documents, and any such payments to Subsidiary Guarantors made while any Event
of Default or Potential Default then exists under the Term Loan Agreement or
the Loan Documents on account of such subordinated debt shall be collected and
received by Subsidiary Guarantors in trust for the Lenders and shall be paid
over to the Administrative Agent on behalf of the Lenders on account of the
Facility Indebtedness without impairing or releasing the obligations of
Subsidiary Guarantors hereunder.  Subsidiary Guarantors also agree not to incur
any “Indebtedness” (as defined in the Agreement) not permitted to be incurred
by the owner of a “Qualifying Unencumbered Project” (as defined in the
Agreement).

10.       Subsidiary
Guarantors hereby subordinate to the Facility Indebtedness any and all claims
and rights, including, without limitation, subrogation rights, contribution
rights, reimbursement rights and set-off rights, which Subsidiary Guarantors
may have against Borrower arising from a payment made by Subsidiary Guarantors
under this Guaranty and agree that, until the entire Facility Indebtedness is
paid in full, not to assert or take advantage of any subrogation rights of
Subsidiary Guarantors or the Lenders or any right of Subsidiary Guarantors or
the Lenders to proceed against (i) Borrower for reimbursement, or
(ii) any other guarantor or any collateral security or guaranty or right
of offset held by the Lenders for the payment of the Facility Indebtedness and
performance of the Obligations, nor shall Subsidiary Guarantors seek or be
entitled to seek any contribution or reimbursement from Borrower or any other
guarantor in respect of payments made by Subsidiary Guarantors hereunder.  It
is expressly understood that the agreements of Subsidiary Guarantors set forth
above constitute additional and cumulative benefits given to the Lenders for
their security and as an inducement for their extension of credit to Borrower.

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

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

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

To Subsidiary
Guarantors:

                                                                           
D-5

 

 

 

 

 

c/o Associated Estates Realty Corporation

1 AEC Parkway

Richmond Heights, OH  44143

Attention:         Lou Fatica

                        Vice President
& CFO

Telephone:       (216) 797-8779

Facsimile:        (216) 261-3902

 

With a copy to:

Associated Estates Realty Corporation

1 AEC Parkway

Richmond Heights, OH  44143

Attention:         Bradley A. Van  Auken

                        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 - 22nd
Floor

Mail Stop:  B7-YB13-22-1

Cleveland, OH  44114

Telephone:       (216) 222-6032

Facsimile:        (216)
222-6070                       

Attention:         John E. Wilgus, II

                        Senior Vice President

                        

With a copy to:  

PNC Bank, National
Association

Agency Services

500 First Avenue, 4th
Floor

Pittsburgh, PA 
15219

Attention:         Sharon
Turner

Telephone:       (412) 762-4532

Facsimile:        (412)
705-2006

 

With a copy to:

SNR Denton US LLP

233 South Wacker Drive, Suite 7800

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 the Term Loan Agreement.

                                                                           
D-6

 

 

 

 

 

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

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

16.       SUBSIDIARY GUARANTORS,
THE ADMINISTRATIVE AGENT AND THE LENDERS, BY THEIR ACCEPTANCE HEREOF, EACH
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR
RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT
OF THIS GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.

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

[Signature page intentionally left blank.]

                                                                           
D-7

 

 

 

 

 

IN WITNESS WHEREOF,
Subsidiary Guarantors have delivered this 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:  Bradley A. Van  Auken

              Title:    Vice President

  

  

   

  
	
   

  	
  BUCKHEAD AERC,
  LLC,

  a Delaware limited liability company

   

  By:       Associated Estates Realty Corporation, 

            its sole member

   

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

              Title:    Vice President

  

  

   

  
	
   

  	
  AERC WESTWIND,
  LLC,

  a Delaware limited liability company

   

  By:       Associated Estates Realty Corporation, 

            its sole member

   

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

              Title:    Vice President

  

  

   

  

                                                                           
D-8

 

 

 

 

 

 

	
  

  

   

  	
  AERC SAN
  RAPHAEL, LLC,

  a Delaware limited liability company

   

  By:       Associated Estates Realty Corporation, 

            its sole member

   

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

              Title:    Vice President

  

  

   

  
	
   

  	
  ASPEN LAKES -
  AERC, INC.,

  a Michigan corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

   

  
	
   

  	
  AERC
  BEDFORD COMMONS, INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

   

  
	
   

  	
  AERC LAKE
  FOREST, INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

  

  

                                                                           
D-9

 

 

 

 

 

 

	
   

  	
  AERC MORGAN
  PLACE, INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

   

  
	
   

  	
  AERC ARROWHEAD
  STATION, INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

   

  
	
  

  

   

  	
  AERC
  BENNELL,
  INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

   

  
	
   

  	
  AERC
  REMINGTON
  PLACE, INC.,

  a Delaware corporation

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

   

   

  

                                                                          
D-10

 

 

 

 

 

 

	
   

  	
  AERC
  WILLIAMSBURG, INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

   

  
	
   

  	
  AERC
  WESTCHESTER, INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

   

  
	
   

  	
  AERC
  STERLING PARK, INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

   

  
	
   

  	
  AERC
  KENSINGTON GROVE, INC.,

  a Delaware corporation

   

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

  

  

  

  
	
   

  	
  AERC
  WESTERN RESERVE, INC.,

  a Delaware corporation

   

  By:       ________________________     

  Name:  Bradley A. Van  Auken

  Title:    Vice President

   

  

                                                                          
D-11

 

 

 

 

 

 

	
   

  	
  AERC
  SPRING BROOK, LLC,

  a
  Delaware limited liability
  company

   

  By:      AERC
  Brook, Inc., its Manager

   

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

              Title:    Vice President

   

  
	
   

  	
  AERC LANDINGS
  AT PRESERVE, LLC,

  a
  Delaware limited liability
  company

   

  By:      AERC
  Landings, Inc., Manager

   

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

              Title:    Vice President

   

  
	
   

  	
  AERC
  COUNTRY PLACE, LLC,

  a
  Delaware limited liability
  company

   

  By:      AERC
  Country I, Inc., its Manager

   

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

             Title:    Vice President

   

  
	
   

  	
  AERC
  GEORGETOWN PARK, LLC,

  a
  Delaware limited liability
  company

   

  By:      AERC
  Georgetown, Inc., its Manager

   

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

             Title:    Vice President

   

  

                                                                          
D-12

 

 

 

 

 

                                                                          
D-13

 

 

 

 

 

 

	
   

  	
  AERC OAKS
  HAMPTON, LLC,

  a
  Delaware limited liability
  company

   

  By:      AERC
  Oaks, Inc., its Manager

   

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

             Title:    Vice President

  

  

   

  
	
   

  	
  AERC DPF PHASE I, LLC,

  a Delaware limited liability company

   

  By:       AERC
  DPF Georgia Ventures, LLC,

            a Delaware limited liability company

              

              By:       AERC
  of Georgia, Inc., 

                        its Sole Member

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

              Title:    Vice President

   

   

  
	
   

  	
  AERC DPF PHASE II, LLC,

  a Delaware limited liability company

   

  By:       AERC
  DPF Georgia Ventures, LLC,

            a Delaware limited liability company

              

              By:       AERC
  of Georgia, Inc., 

                        its Sole Member

   

              By:       ________________________

              Name:  Bradley A. Van  Auken

              Title:    Vice
  President

   

  
	
   

  	
  AERC CENTRAL PARK PLACE,
  LLC

  A Delaware limited liability company 

   

  By:  AERC Central Park,
  Inc. its Manager

   

   

               By:       ________________________

               Name:  Bradley A. Van  Auken

               Title:    Vice President

   

  
	
   

  	
  AERC CLINTON  PLACE, LLC,

  A Delaware limited liability company 

   

  By:  AERC Clinton, Inc.,
  its Manager

   

  By:        ________________________

  Name:   Bradley
  A. Van  Auken

  Title:     Vice
  President

   

  
	
   

  	
  AERC SUMMER RIDGE, LLC

  A Delaware limited liability company 

   

  By:  AERC Summer, Inc., its
  Manager

   

  By:        ________________________

  Name:   Bradley
  A. Van  Auken

  Title:     Vice
  President

   

   

  
	
   

  	
  AERC CHRISTOPHER WREN, INC.

  A Delaware Corporation

   

   

  By:        ________________________

  Name:   Bradley
  A. Van  Auken

  Title:      Vice President

   

  
	
   

  	
  AERC HEATHERMOOR, INC.

  A Delaware Corporation

   

   

  By:        ________________________

  Name:   Bradley
  A. Van  Auken

  Title:     Vice
  President

   

  
	
   

  	
  AERC PERIMETER LAKES, INC.

  A Delaware Corporation

   

   

  By:        ________________________

  Name:   Bradley
  A. Van  Auken

  Title:     Vice
  President

   

  
	
   

  	
  AERC TURNBERRY, INC.

  A Delaware Corporation

   

   

  By:        ________________________

  Name:   Bradley
  A. Van  Auken

  Title:     Vice
  President

  

 

                                                                          
D-14

 

 

 

 

 

EXHIBIT A TO SUBSIDIARY GUARANTY

FORM
OF JOINDER TO GUARANTY

THIS JOINDER is
executed as of [_________, 201_] by the undersigned, each of which hereby
agrees as follows:

1.         All
capitalized terms used herein and not defined in this Joinder shall have the
meanings provided in that certain Subsidiary Guaranty (the “Guaranty”) dated as
of [_________, 2011] executed for the benefit of PNC Bank, National
Association, as agent for itself and certain other lenders, with respect to a
loan from the Lenders to Associated Estates Realty Corporation (“Borrower”).

2.         As
required by the Term Loan Agreement described in the Guaranty, each of the
undersigned is executing this Joinder to become a party to the Guaranty.

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

[SUBSIDIARY GUARANTOR]

FEIN NO.
______________________

 

 

By:                                                                   

Name:                                                              

Its:                                                                   

 

 

                                                                          
D-15

 

 

 

 

 

EXHIBIT E

FORM OF OPINION OF BORROWER’S COUNSEL

[__________, 2011]

 

PNC Bank, National
Association, as Agent 

PNC Real Estate

1900 East Ninth Street - 22nd
Floor

Mail Stop:  B7-YB13-22-1

Cleveland, OH  44114

 

Re:       $125,000,000
Term Loan to Associated Estates Realty Corporation (the “Borrower”)

Ladies
and Gentlemen:

We have acted as counsel
for the Borrower and certain of its subsidiaries (the “Subsidiary Guarantors”,
together with the Borrower are collectively the “Loan Parties”) in connection
with a $125,000,000 term loan (the “Loan”), which Loan is being made pursuant
to that certain Term Loan Agreement dated as of [_________, 2011] (the “Term
Loan Agreement”) among the Borrower, PNC Bank, National Association and the
several lenders from time to time parties thereto (collectively, the
“Lenders”), and PNC Bank, National Association, as Administrative Agent (the
“Agent”).

In connection with the Loan
we have been furnished with originals or copies certified to our satisfaction
of the Articles of Incorporation and Bylaws of the Borrower and of the 
Subsidiary Guarantors, and all such corporate and other records of the Borrower
and the Subsidiary Guarantors with such declarations and agreements, and
certificates of officers and representatives of the Borrower and with such
other documents, and we have made such other examinations and investigations as
we have deemed necessary 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 (all of which are sometimes collectively referred
to as the “Loan Documents”):

1.         The Term Loan Agreement; 

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

3.         Those
certain new promissory notes payable to the Lenders, each dated as of the date
of this Opinion, in the aggregate amount of $125,000,000. 

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

1.         Borrower
is a corporation duly formed, validly existing and in good standing under the
laws of the State of Ohio.  The Subsidiary Guarantors are duly formed, validly
existing and in good standing under the laws of the State set forth next to
such specific Subsidiary Guarantor’s name on Exhibit A, attached to this
Opinion.  

                                                                            
E-1

 

 

 

 

 

 

2.         The
execution, delivery, and performance by each of the Loan Parties of the Loan
Documents to which it is a party has been duly authorized by all necessary
action of such Loan Party and does not (i) require any consent or approval of
any partner or shareholder of such entity or any other person or entity
excepting such consents or approvals as have actually been obtained; (ii)
violate any provision of any law, rule, or regulation of the United States or
the State of Ohio, or any provision of the partnership or corporate law
presently in effect having applicability to the Borrower or its Subsidiary
Guarantors; (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 or
judicial decision applicable to the Loan Parties; or (v) result in a breach of,
or constitute a default under, any agreement or instrument affecting the Loan
Parties.

3.         Each
Loan Document to which it is a party (a) has been properly authorized, executed
and delivered by each Loan Party, (b) constitutes the legal, valid, and
binding obligations of such Loan Party, and (c) is enforceable in
accordance with its terms.

4.         To
our 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 Loan
Parties of the Loan Documents.

5.         To
our knowledge, there are no actions, suits, or proceedings pending or
threatened against the Loan Parties before any court or governmental entity or
instrumentality which could reasonably be expected to have a Material Adverse
Effect (as defined in the Term Loan Agreement).

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

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

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

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

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

(d)  We have assumed the
authenticity of all documents submitted to us as originals (other than the Loan
Documents) and the conformity to 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 the extent that: (i) the enforceability of any rights
or remedies in any agreement or 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 other equitable remedy is subject to the discretion of
a court of competent jurisdiction.

                                                                            
E-2

 

 

 

 

 

 

(f)  The opinions set forth
herein are subject to the effect of limitations contained in Title 11 of the
United States Code, 11 U.S.C. §§ 101 et seq. (the “Federal Bankruptcy Code”)
and all other applicable receivership, conservatorship, bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting the
rights of creditors generally. Without limitation of the foregoing
qualification, no opinion is offered with respect any of the following matters:
(a) turnover, automatic stay, avoiding power fraudulent transfer, preference,
discharge, conversion of a non-recourse obligation into a recourse claims,
limitations on ipso facto and anti-assignment clauses; (b) judicially developed
doctrines relating to the Federal Bankruptcy Code or similar state laws, such
as substantive consolidation.

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

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

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

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

(k)  We
express no opinion as to whether any person has qualified or is required to
qualify to do business as a foreign corporation or other entity, or to
otherwise qualify to transact business, in any State.

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

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

                                                                            
E-3

 

 

 

 

 

 

            (n) 
Whenever we have stated that we have assumed any matter, it is intended to
indicate that we have assumed such matter without making any factual, legal or
other inquiry or investigation and without expressing any opinion or conclusion
of any kind concerning such matter.  Whenever our opinion herein with respect
to the existence or absence of facts or circumstances is qualified by the
phrase “to our knowledge”, that phrase signifies that, in the course of our
representation of the Loan Parties, no facts have come to the attention of Michael T. Fishman or Eric Greenfield the attorneys within
our firm who have been directly involved in representing the Loan Parties in
connection with the Loan, that would give them actual knowledge or actual
notice that any such opinions or other matters are not accurate.  We have
undertaken no independent investigation 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 the date of this opinion.  We do not undertake to
supplement or update this opinion if, hereafter, there is a change in law or
facts or new facts come to our attention.

(p)  We express no opinion as to any choice of law, forum
selection, venue, service of process, consent to jurisdiction (both as to
personal jurisdiction and subject matter jurisdiction) or waiver of jury trial
provisions in any of the Loan Documents.  In addition, the opinions set forth
herein are given as if the law of the State of Ohio governs each Loan Document,
without regard to whether such Loan Document so provides. 

(q)  Certain of the members
of our firm are members of the Bar of the State of Ohio.  The opinions
expressed herein are limited exclusively to the internal laws of the State of
Ohio without regard to principles of conflicts of laws.  Although certain
members of our firm are admitted to the practice of law in certain other states,
we have not made any review of the laws of any other state or consulted with
members of this firm who are admitted in such other jurisdictions for the
purpose of the foregoing opinions.  Accordingly, except as set forth in this
paragraph, we express no opinion as to any matters governed by the laws of any
other state or any Federal laws of the United States of America or any other
nation or sovereign entity.

                                                                            
E-4

 

 

 

 

 

 

This opinion may be relied
upon only by the addressee hereof, the Lenders, their respective attorneys,
auditors, advisors and participants, and their respective successors and
assigns, and not by any other party.

Very truly yours,

 

 

 

Greenberg
Traurig, LLP

 

 

                                                                            
E-5

 

 

 

 

 

 

Exhibit A

AERC Subsidiary Guarantors

 

 

                                                                            
E-6

 

 

 

 

 

 

EXHIBIT G

 

CONVERSION/CONTINUATION
NOTICE

 

___________, 201_

 

PNC Real Estate

1900 East Ninth Street - 22nd
Floor

Mail Stop:  B7-YB13-22-1

Cleveland, OH  44114

Phone:       216-222-6032

Facsimile:  216-222-6070                    

Attention:   John E. Wilgus,
II

                  Senior Vice
President

                  Real Estate
Banking

 

Conversion/Continuation Notice

 

Associated Estates Realty
Corporation (“Borrower”) hereby requests an Advance pursuant to Section 2.10
of the Term Loan Agreement, dated as of [_______, 2011] (as amended or modified
from time to time, the “Term Loan Agreement”), among Borrower, the Lenders
referenced therein, and you, as an administrative agent for the Lenders.

 

A Borrowing is requested to
be made in the amount of $__________, to be made on _____________.  Such
Borrowing shall be a [LIBOR] [Base] Rate Advance.  [The applicable Interest
Period shall be _____________.]  

 

The proceeds of the requested
loan shall be directed to the following account:

 

Wiring
Instructions:

(Bank
Name)

(ABA
No.)

(Beneficiary)

(Account
No. to Credit)

(Notification
Requirement)

 

                                                                            
E-1

 

 

 

 

 

 

In support of this request,
Borrower hereby represents and warrants to the Administrative Agent and the
Lenders that acceptance of the proceeds of such Advance by the Borrower shall
be deemed to further represent and warrant that all requirements of Section
5.2 of the Term Loan Agreement in connection with such Advance have been
satisfied at the time such proceeds are disbursed.

 

Date:_________________________________

 

Associated Estates Realty Corporation, 

an Ohio corporation,

 

 

By:                                                                   

Name:                                                              

                                                Its:                                                                   

 

 

                                                                            
E-2

 

 

 

 

 

 

SCHEDULE 3.1

 

INITIAL
QUALIFYING UNENCUMBERED

PROJECTS
AND SUBSIDIARY GUARANTORS

 

 

SCHEDULE 3.1

 

 

 

 

 

SCHEDULE 6.6

 

LITIGATION

 

(See
Section 6.6)

 

See
Schedule Attached

 

 

SCHEDULE 6.6

 

 

 

 

 

Schedule
6.7

 

SUBSIDIARIES OF BORROWER

 

 

 SCHEDULE 6.7

 

 

 

 

 

SCHEDULE 6.13

 

EXCEPTIONS,
IF ANY, TO OWNERSHIP FREE OF UNPERMITTED LIENS

 

(See
Section 6.13)

 

NONE

 

 SCHEDULE 6.13

 

 

 

 

 

SCHEDULE 6.19

 

ENVIRONMENTAL
MATTERS

 

(See
Section 6.19)

 

NONE

SCHEDULE 6.19

 

 

  

[1] Select as
applicable.

* Amount to be
adjusted by the counterparties to take into account any payments or prepayments
made between the Trade Date and the Effective Date.

[2] Set forth, to at
least 10 decimals, as a percentage of the Commitment/Loans of all Lenders
thereunder.

[3] To be completed
if the Assignor and the Assignee intend that the minimum assignment amount is
to be determined as of the Trade Date.

[4] To be added only
if the consent of the Administrative Agent is required by the terms of the Term
Loan Agreement.

[5] To be added only
if the consent of the Borrower and/or other parties is required by the terms of
the Term Loan Agreement.

[6] Describe Term
Loan Agreement at option of Administrative Agent.

[7] The term “Loan
Document” should be conformed to that used in the Term Loan Agreement.

[8] The concept of 
“Foreign Lender” should be conformed to the section in the Credit Agreement
governing withholding taxes and gross-up.

[9] The
Administrative Agent should consider whether this method conforms to its
systems.  In some circumstances, the following alternative language may be
appropriate:  “From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to, on or after the Effective Date. 
The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.”first amendment to amended and restated credit agreement

Exhibit 4.2 

 

 

 

 

 

FIRST
AMENDMENT TO

AMENDED AND RESTATED CREDIT
AGREEMENT

This First Amendment to Amended
and Restated Credit Agreement (the “Amendment”), dated as of June 3,
2011 (the “Effective Date”), is by and among Associated Estates Realty
Corporation (the “Borrower”), PNC Bank, National Association and the
other banks and financial institutions whose signatures appear below
(collectively, the “Lenders”) and PNC Bank, National Association, not
individually but as administrative agent for the Lenders (the “Administrative
Agent”).

RECITALS

A.               
Borrower, Administrative Agent, and certain of the Lenders are parties
to that certain Amended and Restated Credit Agreement dated as of October 18,
2010 (the “Credit Agreement”), pursuant to which such Lenders made
available to Borrower an unsecured revolving credit facility with an Aggregate
Commitment of $250,000,000.  All capitalized terms used in this Amendment and
not otherwise defined herein shall have the meanings given to such terms in the
Credit Agreement.

B.                
Borrower and the Lenders wish to amend the Credit Agreement to modify
certain of the terms, covenants, and provisions in the Credit Agreement, all as
set forth herein.

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

AGREEMENTS

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

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

3.                 
Changes to Defined Terms.  From and after the Effective Date, the
following definitions in Article I of the Credit Agreement are amended as
follows:

a.                  
The definition of  “Capitalization Rate” is
deleted in its entirety and shall 

be replaced by the following: 

                        “Capitalization Rate” means seven and one quarter
percent (7.25%).

b.                 
The definition of  “Eligible Unencumbered Project” shall be amended by
modifying clause (b) thereof to read: “(b) such Project is an institutional
grade multifamily property as determined by the Agent in its reasonable
discretion;.”

c.         The definition
of “Secured Indebtedness” is deleted in its entirety and 

shall be replaced by the following: 

 

 

 

 

 

 

            “Secured
Indebtedness” means any Indebtedness which is secured by a Lien on a Project or
other tangible asset (which excludes, without limitation, ownership interests
in any Person) which had, in the aggregate, a value in excess of the amount of
such Indebtedness at the time such Indebtedness was incurred.

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

a.                  
In Section 2.21 the third sentence thereof shall be replaced by
the following “Each Swing Advance shall bear interest at a variable rate for
each day such Swing Advance is outstanding equal to the Base Rate Option for
such day or, if so elected by the Borrower in the applicable Swing Loan
Request, the Daily LIBOR Rate plus the then-current LIBOR Applicable Margin.”

b.         In Section
7.1(c) the following clause shall be  added to the end of such subsection:

“provided that
any Compliance Certificate may address both this Agreement as well as that
certain Term Loan Agreement dated as of June 3, 2011 by and among Borrower,
Administrative Agent and certain other lenders;”

c.         In Section
7.1(f) clause (iv) thereof shall be deleted in its entirety and replaced
with the following:  “(iv) any notice of default on any (x) Recourse
Indebtedness that exceeds $5,000,000 individually or in the aggregate, or (y)
Non-Recourse Indebtedness that exceeds $25,000,000 individually or in the
aggregate.”

d.                 
In Section 8.6 clause (A) thereof shall be deleted in its
entirety and replaced with the following:  “(A) any Recourse Indebtedness of
the Borrower or any other member of the Consolidated Group having an
outstanding principal balance in excess of $5,000,000 individually or in the
aggregate.”

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

	
  Re:

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

  (2)   Amended
  and Restated Credit Agreement dated as of October 18, 2010  (as amended,
  modified, supplemented, restated, or renewed, from time to time, together
  with the Term Agreement, the “Agreement”) between ASSOCIATED
  ESTATES REALTY CORPORATION (the “Borrower”), and PNC BANK, NATIONAL
  ASSOCIATION, as Administrative Agent for itself and the other lenders parties
  thereto from time to time (together with the Term Lenders, the “Lenders”).”

  

 

- 2 -

 

 

 

 

 

 

5.                 
Representations and Warranties.  Borrower hereby represents and
warrants to Lenders and the Administrative Agent that as of the Effective Date:

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

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

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

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

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

6.                 
Reimbursement to Administrative Agent.  The Borrower agrees to
reimburse the Administrative Agent for all reasonable out-of-pocket expenses
(including, but not limited to fees relating to legal, consulting, or auditing
expenses) incurred in connection with the preparation, negotiation, and consummation
of this Amendment.

7.                 
References to Credit Agreement; Inconsistency.  All references in
the Loan Documents to the Credit Agreement henceforth shall be deemed to refer
to the Credit Agreement as amended by this Amendment.  In the event of a
conflict or inconsistency between the provisions of the Loan Documents and the
provisions of this Amendment, the provisions of this Amendment shall govern.

8.                 
Continuing Force and Effect of Credit Agreement and Loan Documents. 
The provisions of the Credit Agreement and other Loan Documents are in full
force and effect, except as amended herein, and the Loan Documents as so
amended are hereby ratified and reaffirmed by Borrower.  Nothing contained in
this Amendment shall be construed to disturb, discharge, cancel, impair or
extinguish the indebtedness evidenced by the existing Notes and the other Loan
Documents.

9.                 
Counterparts.  This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Amendment by signing any such
counterpart.  This Amendment shall be construed in accordance with the internal
laws (and not the law of conflicts) of the State of Ohio, but giving effect to
federal laws applicable to national banks.

- 3 -

 

 

 

 

 

 

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

ASSOCIATED
ESTATES REALTY CORPORATION,

an Ohio corporation

By:      /s/
Bradley Van Auken                                   

Name: 
Bradley A. Van Auken                                  

Title:     Vice President                        

1 AEC
Parkway

Richmond
Heights, Ohio  44143

                                                Attention: 
      Vice President and General Counsel

                                                Telephone:       (216)
797-8785

                                                                        Facsimile: 
      (216) 797-8719

 

- 4 -

 

 

 

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

	
   

  	
  SANDLER AT ALTA LAGO, LLC,

  a Virginia limited liability company

  By:       Associated Estates Realty Corporation, 

            its sole member

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

             Title:    Vice
  President

  

  

  
	
   

  	
  BUCKHEAD AERC, LLC,

  a Delaware limited liability company

  By:       Associated Estates Realty Corporation, 

            its sole member

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

              Title:   Vice
  President

  

  

  
	
   

  	
  AERC WESTWIND, LLC,

  a Delaware limited liability company

  By:       Associated Estates Realty Corporation, 

            its sole member

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

              Title:   Vice
  President

  

  

  
	
   

  	
  AERC SAN RAPHAEL, LLC,

  a Delaware limited liability company

  By:       Associated Estates Realty Corporation, 

            its sole member

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

             Title:    Vice
  President

  
	
   

  	
  ASPEN LAKES - AERC, INC.,

  a Michigan corporation

  By:       /s/Bradley A.
  Van Auken        

  Name:  Bradley A. Van Auken

  Title:    Vice President

   

  

- 5 -

 

 

 

 

 

 

 

	
   

  	
  AERC BEDFORD COMMONS, INC.,

  a Delaware corporation

  By:       /s/Bradley A.
  Van Auken       

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
   

  	
  AERC LAKE FOREST, INC.,

  a Delaware corporation

  By:      /s/Bradley A.
  Van Auken        

  Name: Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
   

  	
  AERC MORGAN PLACE, INC.,

  a Delaware corporation

  By:      /s/Bradley A.
  Van Auken        

  Name: Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
   

  	
  AERC ARROWHEAD STATION, INC.,

  a Delaware corporation

  By:      /s/Bradley A.
  Van Auken        

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
   

  	
  AERC BENNELL, INC.,

  a Delaware corporation

  By:     /s/Bradley A.
  Van Auken          

  Name: Bradley A. Van Auken

  Title:   Vice President

  

  

  
	
   

  	
  AERC REMINGTON PLACE, INC.,

  a Delaware corporation

  By:       /s/Bradley A.
  Van Auken       

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

   

  
	
   

  	
  AERC WILLIAMSBURG, INC.,

  a Delaware corporation

  By:      /s/Bradley A.
  Van Auken        

  Name: Bradley
  A. Van Auken

  Title:   Vice President

   

  

- 6 -

 

 

 

 

 

 

 

	
   

  	
  AERC WESTCHESTER, INC.,

  a Delaware corporation

  By:       /s/Bradley A.
  Van Auken       

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
   

  	
  AERC STERLING PARK, INC.,

  a Delaware corporation

  By:       /s/Bradley A.
  Van Auken       

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
   

  	
  AERC KENSINGTON GROVE, INC.,

  a Delaware corporation

  By:       /s/Bradley A.
  Van Auken       

  Name:  Bradley
  A. Van Auken

  Title:    Vice President

  

  

  
	
   

  	
  AERC WESTERN RESERVE, INC.,

  a Delaware corporation

  By:     /s/Bradley A.
  Van Auken         

  Name: Bradley A. Van Auken

  Title:   Vice President

  

  

  
	
   

  	
  AERC
  SPRING BROOK, LLC,

  a Delaware limited liability company

  By:      AERC
  Brook, Inc., its Manager

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

              Title:    Vice
  President

   

  
	
   

  	
  AERC
  LANDINGS AT PRESERVE, LLC,

  a Delaware limited liability company

  By:      AERC
  Landings, Inc., Manager

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

              Title:   Vice
  President

  

  

  

- 7 -

 

 

 

 

 

 

 

	
   

  	
  

  AERC COUNTRY PLACE, LLC,

  a Delaware limited liability company

  By:      AERC
  Country I, Inc., its Manager

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

              Title:   Vice
  President

  

  

  
	
   

  	
  AERC
  GEORGETOWN PARK, LLC,

  a Delaware limited liability company

  By:      AERC
  Georgetown, Inc., its Manager

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

              Title:   Vice
  President

  

  

  
	
   

  	
  AERC
  OAKS HAMPTON, LLC,

  a Delaware limited liability company

  By:      AERC Oaks,
  Inc., its Manager

              By:       /s/Bradley
  A. Van Auken       

              Name:  Bradley A. Van Auken

            Title:    Vice
  President

  

  

  
	
   

  	
  AERC DPF PHASE I, LLC,

  a Delaware limited liability company

   

  By:       AERC
  DPF Georgia Ventures, LLC,

            a Delaware limited liability company

              

              By:       AERC
  of Georgia, Inc., 

                        its Sole Member

   

              By:       /s/Bradley A. Van Auken       

              Name:  Bradley A. Van 
  Auken

              Title:    Vice
  President

   

  
	
   

  	
  AERC
  TURNBERRY, INC.

  A
  Delaware Corporation 

   

  By:       /s/Bradley A. Van Auken       

  Name:  Bradley
  A. Van  Auken

  Title:    Vice
  President

  

 

- 8 -

 

 

 

 

 

 

 

	
   

  	
  AERC
  CENTRAL PARK PLACE, LLC

  A Delaware limited liability company
  

  

  By: 
  AERC Central Park, Inc. its Manager

  

  By:       /s/Bradley A. Van Auken       

  Name:  Bradley A. Van  Auken

  Title:    Vice
  President

  
	
   

  	
  

  AERC CLINTON  PLACE, LLC,

  A
  Delaware limited liability company 

   

  By:  AERC Clinton, Inc., its
  Manager

   

  By:      /s/Bradley A. Van Auken       

  Name:  Bradley A. Van  Auken

  Title:    Vice President

   

  
	
   

  	
  AERC SUMMER RIDGE, LLC

  A
  Delaware limited liability company 

   

  By:  AERC Summer, Inc., its
  Manager

   

  By:      /s/Bradley A. Van Auken       

  Name:  Bradley A. Van  Auken

  Title:    Vice President

   

   

  AERC DPF PHASE II, LLC,

  a Delaware limited liability
  company

   

  By:      AERC DPF Georgia
  Ventures, LLC

            a Delaware limited liability company

   

              By:      AERC of
  Georgia, Inc., 

                          its
  Sole Member

   

   

              By:  /s/Bradley A. Van Auken                        Name: 
  Bradley A. Van Auken

              Title:    Vice
  President

   

   

  

- 9 -

 

 

 

 

 

 

 

	
   

  	
  AERC CHRISTOPHER WREN, INC.,

   a Delaware corporation

   

   

  By:  /s/Bradley A. Van
  Auken 

  Name:  Bradley A. Van Auken

  Title:    Vice President

   

   

  AERC HEATHERMOOR, INC.

  a Delaware corporation

   

   

  By:  /s/Bradley A. Van
  Auken 

  Name:  Bradley A. Van Auken

  Title:    Vice President

   

   

  AERC PERIMETER LAKES, INC., 

  a Delaware corporation

   

   

  By:  /s/Bradley A. Van
  Auken 

  Name:  Bradley A. Van Auken

  Title:    Vice President

  	 

	
   

  	
   

  
	
   

  	
   

  

- 10 -

 

 

 

 

 

 

 

COMMITMENT:                                           PNC
BANK, NATIONAL ASSOCIATION,

$50,000,000                                                    Individually
and as Administrative Agent

By:      /s/
John E. Wilgus, II                                      

Name:  John
E. Wilgus                                                

Title:    Senior Vice President                                     

PNC Real Estate

1900 East Ninth Street - 22nd
Floor

Mail Stop:  B7-YB13-22-1

Cleveland, OH  44114

Phone:             216-222-6032

Facsimile:        216-222-6070

Attention:        John E. Wilgus,
II

      Senior
Vice President

      Real Estate Banking

 

- 11 -

 

 

 

 

 

 

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

$50,000,000                                                    Syndication
Agent

By:      /s/
Antoinette G. Perry                                    

Name:  Antoinette
G. Perry                                        

Title:    Vice President                                                 

                                    200
Public Square

                                    Suite
3200

                                    Cleveland,
OH  44114

                                    Attention: 
      Toni G. Perry

                                    Phone: 
           216-344-6946

                                    Facsimile: 
      216-344-6971

 

 

- 12 -

 

 

 

 

 

 

COMMITMENT:                                           U.S.
BANK NATIONAL ASSOCIATION,

$30,000,000                                                    individually
and as Documentation Agent

By:      /s/
Curt M. Steiner                               

Name:
Curt M. Steiner

Title:    Senior Vice President

                                    U.S.
Bank National Association

                                    209
South LaSalle Street, Suite 210

                                    Chicago,
IL 60604

                                    Attention: 
      Curt M. Steiner

                                                            Senior
Vice President

                                    Phone:
            (312)325-8756

                                    Facsimile:
       (312)325-8853

 

- 13 -

 

 

 

 

 

 

COMMITMENT:                                           RAYMOND
JAMES BANK, FSB

$25,000,000

By:      /s/
James Armstrong                            

Name:
James Armstrong

Title:    Vice President

                                    710
Carillon Parkway

                                    St.
Petersburg, FL  33716

                                    Attention: 
      James Armstrong

                                    Phone: 
           727-567-7919

                                    Facsimile: 
      866-205-1396

 

- 14 -

 

 

 

 

 

 

COMMITMENT:                                           THE
HUNTINGTON NATIONAL BANK

$25,000,000

By:      /s/
Michael S. Kauffman                                 

Name:  Michael
S. Kauffman                                     

Title:    SVP                                                                 

                                    917
Euclid Avenue, CM17

                                    Cleveland,
OH  44115

                                    Attention: 
      Jennifer Hearns

                                    Phone: 
           216-515-6923

                                    Facsimile:        216-515-0179

                                    with notice to:

917 Euclid Avenue, CM17

                                    Cleveland,
OH  44115

                                    Attention: 
      Timothy Smith

                                    Phone: 
           216-515-0368

                                    Facsimile: 
      216-515-0179

 

- 15 -

 

 

 

 

 

 

COMMITMENT:                                           CITIBANK,
N.A.

$25,000,000

By:      /s/
John C. Rowland                                        

Name:  John
C. Rowland

Title:    Vice President                                                 

Citibank, N.A.

388 Greenwich Street, 23rd
Floor

New York, NY  10013

Attention:        Rita C. Lai

Phone:             212-723-5931

Facsimile:        212-723-8550

- 16 -

 

 

 

 

 

 

COMMITMENT:                                           COMPASS
BANK, an Alabama banking 

$25,000,000                                                    corporation

 

By:      /s/
S. Kent Gorman                             

Name: S.
Kent Gorman

Title:    Senior Vice President

BBVA
Compass

15 South 20th Street,
Suite 1504

Birmingham, AL  35233

Attention:        S. Kent Gorman

Phone:             205-297-3328

Facsimile:        205-297-3901

 

- 17 -

 

 

 

 

 

 

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

$20,000,000                                                   ONE

 

By:      /s/
Erin L. Mahon                                

Name: Erin
L. Mahon

Title:    Vice President

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

1215 Superior Avenue, OH S675

Cleveland, OH  44114

Attention:        Samuel A. Bluso

Phone:             216-277-0388

Facsimile:        216-277-4600

 

- 18 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}]]