Document:

ncbcrex

 

CREDIT AGREEMENT

DATED AS OF APRIL 24,  2007

AMONG

ASSOCIATED ESTATES REALTY
CORPORATION,

AS BORROWER

AND

NATIONAL CITY BANK

AS ADMINISTRATIVE AGENT, LEAD
ARRANGER,

AND BOOK MANAGER

AND

THE SEVERAL LENDERS

FROM TIME TO TIME PARTIES HERETO,

AS LENDERS

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CREDIT
AGREEMENT

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

RECITALS

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

WHEREAS, the Borrower desires to borrow and Lenders desire
to make available to the Borrower an unsecured revolving credit facility in the
amount of $100,000,000, on the terms and conditions contained herein, for the
purpose of allowing Borrower to refinance existing obligations and to provide
it with working capital for the support of ongoing projects and to purchase
additional real estate.

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

ARTICLE
I

DEFINITIONS

As
used in this Agreement:

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

"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, without any reduction  for Defeasance Costs.

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

"Advance" means a borrowing
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 LIBOR Interest Period, including Swingline Advances.

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"Affiliate" of any Person means
any other Person directly or indirectly controlling, controlled by or under
common control with such Person.  A Person shall be deemed to control another
Person if the controlling Person owns 10% or more of any class of voting
securities (or other ownership interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise.

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

"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, $100,000,000.

"Agreement" means this Credit
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.

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

"Alternate Base Rate" means, for
any day, a rate of interest per annum equal to the higher of (i) the Prime
Rate for such day and (ii) the Federal Funds Effective Rate for such day plus
1/2% per annum.  

"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 ratio of Consolidated Outstanding
Indebtedness to Total Asset Value as follows:

 

	
  Consolidated Outstanding
  Indebtedness to Total Asset Value

  	
  
  LIBOR Applicable Margin

  	
  
  ABR Applicable Margin

  
	

  	

  	

  
	
  Less than 45%

  	
  
  1.30%

  	
  
  . 30%

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

  	
  
  1.45%

  	
  
  .45%

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

  	
  
  1.60%

  	
  
  .60%

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

  	
  
  1.75%

  	
  
  .75%

  
	
  Greater than or equal to
  60%

  	
  
  1.85%

  	
  
  .85%

  

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As of the Agreement Execution
Date, based on the ratio of Consolidated Outstanding Indebtedness to Total
Asset Value shown on the Compliance Certificate delivered to the Administrative
Agent by Borrower pursuant to Section 5.1(k), the LIBOR Applicable Margin is
1.60% and the ABR Applicable Margin is 0.60%. The percentages set forth
above shall be changed from time to time in accordance with the ratio of
Consolidated Outstanding Indebtedness to Total Asset Value as of the last day
of the most recent preceding fiscal quarter for which financial results have
been reported, which percentage shall change upon the date Administrative Agent
has received a Compliance Certificate as required by Section 7.1(c)
from  the Borrower as of the end of such fiscal quarter in the form attached
hereto as Exhibit B, beginning with the Compliance Certificate for the
fiscal quarter ending March 30, 2007.  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.

"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.

"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 a date on
which an Advance is made hereunder.

"Borrowing Notice" is defined in
Section 2.10.

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

"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.

"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;

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(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.  

"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.

"Commitment Fee" is defined in Section 2.4.

"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.   

"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.

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"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 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 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.

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

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

"Default" means an event
described in Article VII.

"Defaulting Lender" means any
Lender which fails or refuses to perform its obligations under this Agreement
within the time period specified for performance of such obligation, or, if no
time frame is specified, if such failure or refusal continues for a period of
five Business Days after written notice from the Administrative Agent; provided
that if such Lender cures such failure or refusal, such Lender shall cease to
be a Defaulting Lender.

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

"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.  

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"Eligible Unencumbered Project" means a Project which
satisfies all of the following requirements:  (a) 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 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; (b) 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, (c) 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
(v) of the definition of Permitted Liens)) or a Negative Pledge; (d) 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 (v) of the definition of Permitted Liens)) 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; (e) 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 (f) 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 amended from time to time, and any
rule or regulation issued thereunder.

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

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

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"Facility Letter of Credit Fee" is defined in Section
2.22(h)(i)(a).

"Facility Letter of Credit Obligations" means, as of any
date, all liabilities, whether actual or contingent, of the Borrower with
respect to Facility Letters of Credit, including the sum of (a) the
Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.

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

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

"Federal Funds Effective Rate"
shall mean, for any day, the rate per annum (rounded upward to the nearest one
one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve
Bank of Cleveland 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 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."

"Fee Letter" is defined in Section
2.5.

"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 Rate Management Transaction.

"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 a Project 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.

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

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

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

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"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 in effect from time to
time, applied in a manner consistent with that used in preparing the financial
statements referred to in Section 7.1.

"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.

"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.

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"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.

"Interest Period" means a LIBOR
Interest Period.

"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.

"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.

"Issuance Date" is defined
in  Section 2.22.

"Issuance Notice" is
defined in  Section 2.22.

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

"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.

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

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

"Letter of Credit Collateral Account" is defined in
 Section
2.22.

"Letter of Credit Request" is defined in
 Section 2.22.

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

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

"LIBOR Flex Rate" means,
with respect to any Swingline Loan for any day, the fluctuating LIBOR Base Rate
that would be applicable to an amount similar to the principal amount of such
Swingline Loan for a LIBOR Interest Period of one month, with each daily change
in such LIBOR Base Rate automatically, immediately, and without notice changing
the LIBOR Flex Rate thereafter applicable hereunder plus the LIBOR
Applicable Margin for such day.  The LIBOR Flex Rate shall be adjusted by
the Administrative Agent, if necessary, at the end of each Business Day during
the term hereof.  The Administrative Agent shall not be required to notify
Borrower of any adjustment in the LIBOR Flex Rate; however, Borrower may
request a quote of the prevailing LIBOR Flex Rate on any Business Day.

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

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

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

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

"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 a
Lender, such Lender's portion of any Advance.

"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.

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"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.

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

"Multiemployer Plan" means a
Plan maintained pursuant to a collective bargaining agreement or any other
arrangement to which the Borrower or any member of the Controlled Group is a
party to which more than one employer is obligated to make 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 Rate
Management Transactions or any other Financial Contract.  "Unrealized losses"
means the fair market value of the cost to such Person of replacing such Rate
Management Transaction or other Financial Contract as of the date of
determination (assuming the Rate Management Transaction 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 Rate
Management Transaction or other Financial Contract as of the date of
determination (assuming such Rate Management Transaction 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-U.S. Lender" is defined in Section
4.5(d).

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"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.

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

"Other Taxes" is defined in Section
4.5(b).

"Participants" is defined in Section
13.2.1.

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

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

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

"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" means an employee pension
benefit plan which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code as to which the Borrower or any
member of the Controlled Group may have any liability.

"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.

                                                                             13

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"Prime Rate" means a rate per
annum equal to the prime rate of interest publicly announced from time to time
by Administrative Agent or its parent as its prime rate (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.  In the event that there is a successor to the
Administrative Agent by merger, or the Administrative Agent assigns its duties
and obligations to an Affiliate, then the term "Prime Rate" as used in this
Agreement shall mean the prime rate, base rate or other analogous rate of the
new Administrative Agent.

"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.

"Purchasers" is defined in Section
13.3.1.

"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.

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

"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 D" means Regulation
D of the Board of Governors of the Federal Reserve System as from time to time
in effect and any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.

"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.

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

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

"Reserve Requirement" means,
with respect to a LIBOR Rate Loan and LIBOR Interest Period, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by 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.

"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, any ownership interests
in any Person or any other assets 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 Controlled Group for
employees of the Borrower or any member of the Controlled Group.

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

"Subordinated Debt" means (i)
any Indebtedness of Borrower or any other member of the Consolidated Group 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 6.20.   

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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.

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

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

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

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

"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.

"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 Projects which have not been so owned or leased for four
(4) full fiscal quarters as of the end of the most recent fiscal quarter for
which financial results have been reported) divided by the Capitalization Rate,
plus (ii) 100% of cost for any such Projects first acquired or leased during
such four (4) fiscal quarter period (including the amount of any assumed
Indebtedness secured thereby), plus (iii) the
Consolidated Group Pro Rata Share of Net Operating Income attributable to
Projects then owned or leased by an Investment Affiliate for the most recent
four (4) consecutive fiscal quarters of the Borrower for which financial
results have been reported (excluding Net Operating Income attributable to any
such Projects which have not been so owned or leased for four (4) fiscal quarters as of the end of such most recent fiscal
quarter for which financial results have been reported) 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 four (4) fiscal quarter period (including the amount of
any assumed Indebtedness secured thereby); (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.

"Transferee" is defined in Section
13.4.

"Type" means, with respect to
any Advance, its nature as a Floating Rate Advance, a LIBOR Rate Advance or a
Swingline Advance.

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"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 which have not been owned or leased by Borrower or a Wholly-Owned
Subsidiary for four (4) consecutive full fiscal quarters as of the end of the
most recent fiscal quarter of Borrower for which financial results have been
reported, 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.   

"Unencumbered Real Property Adjusted NOI" shall mean, as
of any date, (i) 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 Qualifying Unencumbered
Projects which have not been so owned or leased for four (4) full fiscal
quarters as of the end of the most recent fiscal quarter of Borrower for which
financial results have been reported less (ii) management fees equal to
2.5% of the aggregate gross revenues attributable to such Qualifying
Unencumbered Projects for such period less (iii) a capital expenditure reserve
equal to $150 per unit for all 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.

"Unmatured Default" means an
event which but for the lapse of time or the giving of notice, or both, would
constitute a Default.

"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.

ARTICLE
II

THE CREDIT

2.1              

Generally

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.  Subject to the
terms and conditions of this Agreement, Lenders severally agree to make
Advances through the Administrative Agent to Borrower from time to time prior
to the Facility Termination Date, provided that the making of any
such Advance will not cause the then‐current Allocated Facility Amount to
exceed the then-current Aggregate Commitment.  Each Lender shall fund its
Percentage of each such Advance and no Lender will be required to fund any
amounts which, when aggregated with such Lender's Percentage of all other
Advances then outstanding, would exceed such Lender's then-current Commitment. 
This facility ("Facility") is a revolving credit facility and, subject
to the provisions of this Agreement, Borrower may request Advances hereunder,
repay such Advances and reborrow Advances at any time prior to the Facility
Termination Date.

2.2              

Ratable Advances

.  Each Advance
hereunder shall consist of Loans made from the several Lenders ratably in
proportion to the ratio their respective Commitments bear to the Aggregate
Commitment.  The ratable Advances may be Floating Rate Advances, LIBOR Rate
Advances or a combination thereof, selected by Borrower in accordance with Sections
2.10 and 2.11.

2.3              

Final Principal Payment

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

2.4              

Commitment Fee

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

2.5              

Other 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 24, 2007
(the "Fee Letter").  

2.6              

Usury

.  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.

2.7              

Voluntary Commitment Reductions

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

2.8              

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.  Each Floating Rate Advance and each Swingline
Advance shall be in the minimum amount of $250,000; provided, however, that,
subject to Section 2.1, any Floating Rate Advance or Swingline Advance
may be in the amount of the unused Aggregate Commitment.

2.9              

Optional Prepayments

.  The Borrower may,
upon at least one (1) Business Day's notice to the Administrative Agent, in the
case of all Advances other than Swingline Advances, prepay the Advances, which
notice shall specify the date and amount of prepayment and whether the
prepayment is of LIBOR Rate Advances, Floating Rate Advances, or a combination
thereof, and if a combination thereof, the amount allocable to each; provided,
however, that (i) any partial prepayment under this Subsection shall be in an
amount not less than $1,000,000 or a whole multiple of $100,000 in excess
thereof and; (ii) any LIBOR Rate Advance prepaid on any day other than the last
day of the applicable LIBOR Interest Period must be accompanied by any amounts
payable pursuant to Section 4.4.  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, together with any amounts payable pursuant to Section
4.4.

2.10           

Method of Selecting Types and
Interest Periods for New Advances

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

(i)                 
the Borrowing Date, which shall be
a Business Day, of such Advance,

(ii)               
the aggregate amount of such
Advance,

(iii)              
the Type of Advance selected, and

(iv)             
in the case of each LIBOR Rate
Advance, the LIBOR Interest Period applicable thereto.

                                                                             19

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

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

2.11           

Conversion and Continuation of
Outstanding Advances

.  Floating Rate
Advances shall continue as Floating Rate Advances unless and until such
Floating 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 LIBOR Interest Period therefor, at which time such LIBOR Rate
Advance shall be automatically converted into a Floating Rate Advance unless
the Borrower shall have given the Administrative Agent a
Conversion/Continuation Notice requesting that, at the end of such LIBOR
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.  Subject to the terms of Section 2.8, the Borrower
may elect from time to time to convert all or any part of an Advance of any
Type into any other Type or Types of Advances; provided that any conversion of
any LIBOR Rate Advance shall be made on, and only on, the last day of the
Interest Period applicable thereto.  The Borrower shall give the Administrative
Agent irrevocable notice (a "Conversion/Continuation Notice") of each
conversion of an Advance to a LIBOR Rate Advance or continuation of a LIBOR
Rate Advance not later than 11:00 a.m. (Cleveland time), at least three
Business Days, in the case of a conversion into or continuation of a LIBOR Rate
Advance, prior to the date of the requested conversion or continuation, specifying:

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

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

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

2.12           

Changes in Interest Rate, Etc.

                                                                             20

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 Each Floating 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 Floating Rate Advance pursuant to Section 2.11
to but excluding the date it becomes due or is converted into a LIBOR Rate
Advance pursuant to Section 2.11 hereof, at a rate per annum equal to
the Floating Rate for such day.  Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate.  Each LIBOR Rate
Advance shall bear interest from and including the first day of the LIBOR
Interest Period applicable thereto to (but not including) the last day of such
LIBOR Interest Period at the interest rate determined as applicable to such
LIBOR Rate Advance.

2.13           

Rates Applicable After Default

.  During the
continuance of a Default the Administrative Agent may, at the direction of the
Required Lenders, by notice to the Borrower, declare that (i) no Advance may be
made as, converted into, or continued beyond the expiration of any then-current
Interest Period as, a Fixed 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 a Default occurs under Section
8.1, 8.2, or 8.3, unless waived by the Required Lenders.

2.14           

Method of Payment

.  All payments of the
Obligations hereunder shall be made, without setoff, deduction, or
counterclaim, in immediately available funds to the Administrative Agent at the
Administrative Agent's address specified pursuant to Article XIV,
or at any other Lending Installation of the Administrative Agent specified in
writing at least three (3) Business Days in advance by the Administrative Agent
to the Borrower, by noon (Cleveland 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
Advances and 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 (Cleveland 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 Lending Installation 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 National City Bank for each payment of
principal, interest and fees as it becomes due hereunder.

2.15           

Notes; Telephonic Notices

.  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.

                                                                            
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2.16           

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, Facility Letter of Credit Fees and
Commitment Fees shall be calculated for actual days elapsed on the basis of a
360-day year.  Interest on Floating Rate Advances and Swingline Advances shall
be calculated for actual days elapsed on the basis of a 365 (or 366, as
applicable) 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 (Cleveland time) at the place of payment.  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.

2.17           

Notification of Advances,
Interest Rates and Prepayments

.  The Administrative
Agent will notify each Lender of the contents of each Borrowing Notice,
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 Alternate Base Rate.

2.18           

Lending Installations

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

2.19           

Non-Receipt of Funds by the
Administrative Agent

                                                                             22

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14534489\V-10

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

2.20           

Replacement of Lenders under
Certain Circumstances

.  The Borrower shall
be permitted to replace any Lender which (a) is not capable of receiving
payments without any deduction or withholding of United States federal income
tax pursuant to Section 4.5, or (b) cannot maintain its LIBOR
Rate Loans at a suitable Lending Installation pursuant to Section 4.3,
with a replacement bank or other financial institution; provided that
(i) such replacement does not conflict with any applicable legal or
regulatory requirements affecting the Lenders, (ii) no Default or (after
notice thereof to the Borrower) no Unmatured Default  shall have occurred and
be continuing at the time of such replacement, (iii) the Borrower shall
repay (or the replacement bank or institution shall purchase, at par) all Loans
and other amounts owing to such replaced Lender prior to the date of
replacement, (iv) the Borrower shall be liable to such replaced Lender
under Sections 4.4 and 4.6 if any LIBOR Rate Loan owing to
such replaced Lender shall be prepaid (or purchased) other than on the last day
of the Interest Period relating thereto, (v) the replacement bank or
institution, if not already a Lender, and the terms and conditions of such
replacement, shall be reasonably satisfactory to the Administrative Agent,
(vi) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 13.3 (provided that the
Borrower shall be obligated to pay the processing fee referred to therein),
(vii) until such time as such replacement shall be consummated, the
Borrower shall pay all additional amounts (if any) required pursuant to Section 4.5
and (viii) any such replacement shall not be deemed to be a waiver of any
rights which the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.

2.21           
Swingline Advances.

                                                                             23

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 In addition to the
other options available to the Borrower hereunder, the Swingline Commitment
shall be available for Swingline Advances subject to the following terms and
conditions.  Swingline Advances shall be made available for same day borrowings
provided that notice is given in accordance with Section 2.10
hereof during the period commencing on the Agreement Effective Date and ending
on a date ten (10) days prior to the then-current Facility Termination Date. 
Each Swingline Advance shall bear interest at a variable rate for each day such
Swingline Advance is outstanding equal to the LIBOR Flex Rate for such day.  In
no event shall the Swingline Lender be required to fund a Swingline Advance if
it would increase the total aggregate outstanding Loans by Swingline Lender
hereunder plus its Percentage of Reimbursement Obligations to an amount in
excess of the Swingline Lender's Commitment.  No Swingline Advance may be made
to repay a Swingline Advance, but Borrower may repay Swingline Advances from
subsequent pro rata Advances hereunder.  On the fifteenth day and on the last
Business Day of each calendar month, if any Swingline Advances have not
previously been paid, each Lender irrevocably agrees to purchase its Percentage
of any Swingline Advance made by the Swingline Lender regardless of whether the
conditions for disbursement are satisfied at the time of such purchase,
including the existence of a Default hereunder provided that Swingline Lender
did not have actual knowledge of such Default at the time the Swingline Advance
was made and provided further that no Lender shall be required to have total
outstanding Loans plus its Percentage of Reimbursement Obligations exceed its
Commitment.  Such purchase shall take place on the date of the request by
Swingline Lender so long as such request is made by 11:00 a.m. (Cleveland
time), and otherwise on the Business Day following such request.  All requests
for purchase shall be in writing.  From and after the date it is so purchased,
each such Swingline Advance shall, to the extent purchased, (i) be treated
as a Loan made by the purchasing Lenders and not by the selling Lender for all
purposes under this Agreement and the payment of the purchase price by a Lender
shall be deemed to be the making of a Loan by such Lender and shall constitute
outstanding principal under such Lender's Note, and (ii) shall no longer
be considered a Swingline Advance except that all interest accruing on or
attributable to such Swingline Advance for the period prior to the date of such
purchase shall be paid when due by the Borrower to the Administrative Agent for
the benefit of the Swingline Lender and all such amounts accruing on or
attributable to such Loans for the period from and after the date of such
purchase shall be paid when due by the Borrower to the Administrative Agent for
the benefit of the purchasing Lenders.  If prior to purchasing its Percentage
of a Swingline Advance one of the events described in Section 8.7 shall have
occurred and such event prevents the consummation of the purchase contemplated
by preceding provisions, each Lender will purchase an undivided participating
interest in the outstanding Swingline Advance in an amount equal to its
Percentage of such Swingline Advance.  From and after the date of each Lender's
purchase of its participating interest in a Swingline Advance, if the Swingline
Lender receives any payment on account thereof, the Swingline Lender will distribute
to such Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such Lender's participating interest was outstanding and funded);
provided, however, that in the event that such payment was received by the
Swingline Lender and is required to be returned to the Borrower, each Lender
will return to the Swingline Lender any portion thereof previously distributed
by the Swingline Lender to it.  If any Lender fails to so purchase its
Percentage of any Swingline Advance, such Lender shall be deemed to be a
Defaulting Lender hereunder.

2.22           
Letter of Credit Subfacility.   

 

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

(b)              
Types and Amounts. The Issuing Bank shall not have any
obligation to:

(i)                 
issue any Facility Letter of Credit if the aggregate maximum
amount then available for drawing under Letters of Credit issued by such
Issuing Bank, after giving effect to the Facility Letter of Credit requested
hereunder, shall exceed any limit imposed by law or regulation upon such
Issuing Bank;

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

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

                                                                             24

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14534489\V-10

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

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

(ii)               
as of the date of issuance, no order, judgment or decree of any
court, arbitrator or governmental authority shall purport by its terms to
enjoin or restrain the Issuing Bank from issuing the requested Facility Letter
of Credit and no law, rule or regulation applicable to the Issuing Bank and no
request or directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Issuing Bank shall prohibit
or request that the Issuing Bank refrain from the issuance of Letters of Credit
generally or the issuance of the requested Facility Letter or Credit in
particular; and

(iii)              
there shall not exist any Default.

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

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

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

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

(iv)             
the purpose for which such Facility Letter of Credit is to be
issued;

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

(vi)             
any special language required to be included in the Facility
Letter of Credit.

                                                                             25

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14534489\V-10

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

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

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

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

(e)               
Reimbursement Obligations; Duties of Issuing Bank.

(i)                 
The Issuing Bank shall promptly notify the Borrower and the
Administrative Agent (who shall promptly notify Lenders) of any draw under a
Facility Letter of Credit.  Any such draw shall not be deemed to be a default
hereunder but shall constitute an Advance of the Facility in the amount of the
Reimbursement Obligation with respect to such Facility Letter of Credit and
shall bear interest from the date of the relevant drawing(s) under the
pertinent Facility Letter of Credit at the Floating Rate; provided that if a
Default or an Unmatured Default regarding the non-payment of any monetary
obligations to the Administrative Agent or the Lenders exists at the time of
any such drawing(s), then the Borrower shall reimburse the Issuing Bank for
drawings under a Facility Letter of Credit issued by the Issuing Bank no later
than the next succeeding Business Day after the payment by the Issuing Bank and
until repaid such Reimbursement Obligation shall bear interest at the Default
Rate.

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

(f)                
Participation.

                                                                             26

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14534489\V-10

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

(ii)               
In the event that the Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such amount to
the Issuing Bank pursuant to Section 2.22(g) hereof, the Issuing Bank
shall promptly notify the Administrative Agent, which shall promptly notify
each Lender of such failure, and each Lender shall promptly and unconditionally
pay to the Administrative Agent for the account of the Issuing Bank the amount
of such Lender's Percentage of the unreimbursed amount of such payment, and the
Administrative Agent shall promptly pay such amount to the Issuing Bank. 
Lender's payments of its Percentage of such Reimbursement Obligation as
aforesaid shall be deemed to be a Loan by such Lender and shall constitute
outstanding principal under such Lender's Note.  The failure of any Lender to
make available to the Administrative Agent for the account of the Issuing Bank
its Percentage of the unreimbursed amount of any such payment shall not relieve
any other Lender of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuing Bank its Percentage of the
unreimbursed amount of any payment on the date such payment is to be made, but
no Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent its Percentage of the unreimbursed amount
of any payment on the date such payment is to be made.  Any Lender which fails
to make any payment required pursuant to this Section 2.22(f)(ii)
shall be deemed to be a Defaulting Lender hereunder.

(iii)              
Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, the Issuing Bank
shall promptly pay to the Administrative Agent and the Administrative Agent
shall promptly pay to each Lender which has funded its participating interest
therein, in immediately available funds, an amount equal to such Lender's
Percentage thereof.

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

                                                                             27

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(v)               
The obligations of a Lender to make payments to the
Administrative Agent for the account of the Issuing Bank with respect to a
Facility Letter of Credit shall be absolute, unconditional and irrevocable, not
subject to any counterclaim, set‐off, qualification or exception whatsoever
other than a failure of any such Issuing Bank to comply with the terms of this
Agreement relating to the issuance of such Facility Letter of Credit, and such
payments shall be made in accordance with the terms and conditions of this
Agreement under all circumstances.

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

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

(ii)               
the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against a beneficiary named in a Facility
Letter of Credit or any transferee of any Facility Letter of Credit (or any
Person for whom any such transferee may be acting), the Administrative Agent,
the Issuing Bank, any Lender, or any other Person, whether in connection with
this Agreement, any Facility Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying transactions
between the Borrower and the beneficiary named in any Facility Letter of
Credit);

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

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

(v)               
the occurrence of any Default.

            In the event any payment by the Borrower
received by the Issuing Bank or the Administrative Agent with respect to a
Facility Letter of Credit and distributed by the Administrative Agent to the
Lenders on account of their participations is thereafter set aside, avoided or
recovered from the Administrative Agent or Issuing Bank in connection with any
receivership, liquidation, reorganization or bankruptcy proceeding, each Lender
which received such distribution shall, upon demand by the Administrative
Agent, contribute such Lender's Percentage of the amount set aside, avoided or
recovered together with interest at the rate required to be paid by the Issuing
Bank or the Administrative Agent upon the amount required to be repaid by the
Issuing Bank or the Administrative Agent.

(h)               
Compensation for Facility Letters of Credit.

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

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

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

ARTICLE
III 

UNENCUMBERED POOL PROPERTIES

            3.1        Eligibility of 
Projects

.

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(a)               
As of the Agreement Execution
Date, the Lenders have approved for inclusion as Qualifying Unencumbered
Projects those Projects identified on Schedule 3.1, and such Projects
shall become the initial Qualifying Unencumbered Projects.  Lenders acknowledge
that two of such Projects are encumbered as of the Agreement Execution Date.
Borrower hereby agrees, and irrevocably directs the Administrative Agent, to
fund such portion of the proceeds of the initial Advance hereunder as is needed
to cause such Projects to be released from the applicable Liens to repay that
portion of the Indebtedness secured thereby required to be repaid under the
applicable "pay off" letters delivered to the Administrative Agent pursuant to Section
5.1 hereof.

(b)              
If, after the Agreement Execution
Date, Borrower desires that the Lenders include any additional Projects as
Qualifying Unencumbered Projects Borrower shall so notify the Agent in
writing.  No Property will be evaluated by the Lenders unless it is an Eligible
Unencumbered Project and unless and until the Borrower delivers to the Agent
the following, in form and substance satisfactory to the Agent:  

(i)                 
a description of such Project ,
such description to include the age, location, size and occupancy rate of 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 Agent may reasonably request in
order to evaluate such Project.

(c)               
If, after receipt and review of
the foregoing, unless Agent has reasonably determined that the additional
Project does not satisfy the requirements to be an Eligible Unencumbered
Project, the Agent will notify the Borrower and each Lender within five (5)
Business Days after receipt of all of the above items that it is prepared to
proceed with the acceptance of such Project as an Unencumbered Project.  If the
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 Requisite Lender
approval, the 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
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 Agent, then such Lender
shall be deemed to have approved of such Project.  Upon approval of such
Project by the Agent, or, if required, by Requisite 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 Agent, or, if
required, the Requisite 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 Agent the following instruments, documents and agreements
in respect of such Property, each to be in form and substance reasonably
satisfactory to the 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 Agent under Sections 5.1(b) through (f) had such
Subsidiary been a Loan Party on the Effective Date;

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(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 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 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 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

(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 repaid such Advances, if any, as may be required to reduce
the outstanding Advances to the maximum amount of Advances that can be
outstanding without creating such a breach of Section 7.20(c) or Section
7.20(d).  

            In
connection with a Release, Borrower shall deliver to the 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 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) a Default or Unmatured Default has occurred and is
then continuing.

ARTICLE
IV

CHANGE IN CIRCUMSTANCES

4.1              

Yield Protection

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

(i)                 
subjects any Lender or any
applicable Lending Installation to any Taxes, or changes the basis of taxation
of payments (other than with respect to Excluded Taxes) to any Lender in
respect of its LIBOR Rate Loans, or

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

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

and the
result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation, as the case may be, of making or maintaining
its LIBOR Rate Loans or Commitment or to reduce the return received by such
Lender or applicable Lending Installation in connection with such LIBOR Rate
Loans or Commitment, then, within 15 days of demand by such Lender, the
Borrower shall pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction in amount received.

4.2              

Changes in Capital Adequacy
Regulations

.  If a Lender in good
faith determines the amount of capital required or expected to be maintained by
such Lender, any Lending Installation of such Lender or any corporation
controlling such Lender  is increased as a result of a Change (as hereinafter
defined), then, within 15 days of demand by such Lender, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender in good faith
determines is attributable to this Agreement, its outstanding credit exposure
hereunder or its obligation to make Loans hereunder (after taking into account
such Lender's policies as to capital adequacy).  "Change" means
(i) any change after the date of this Agreement in the Risk‐Based Capital
Guidelines (as hereinafter defined) or (ii) any adoption of or change in
any other law, governmental or quasi‐governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the
force of law) after the date of this Agreement which affects the amount of
capital required or expected to be maintained by any Lender or any Lending
Installation or any corporation controlling any Lender.  "Risk‐Based
Capital Guidelines" means (i) the risk‐based capital guidelines
in effect in the United States on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing
the July 1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.

4.3              

Availability of Types of
Advances

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

4.4              
Funding Indemnification.

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

4.5              

Taxes

.

(a)               
All payments by the Borrower to or
for the account of any Lender or the Administrative Agent hereunder or under
any Note shall be made free and clear of and without deduction for any and all
Taxes.  If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender or the Administrative Agent,
(a) 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 4.5) such Lender or the Administrative Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (b) the Borrower shall make such deductions,
(c) the Borrower shall pay the full amount deducted to the relevant authority
in accordance with applicable law and (d) the Borrower shall furnish to the
Administrative Agent the original copy of a receipt evidencing payment thereof
within 30 days after such payment is made.

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

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

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(d)              
Each Lender that is not
incorporated under the laws of the United States of America or a state thereof
(each a "Non-U.S. Lender") agrees that it will, not more than ten Business Days
after the Agreement Execution Date, (i) deliver to each of the Borrower and the
Administrative Agent two duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such
Lender is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, and (ii) deliver to
each of the Borrower and the Administrative Agent a United States Internal
Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to
an exemption from United States backup withholding tax.  Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Administrative
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after
the occurrence of any event requiring a change in the most recent forms so
delivered by it, such additional forms or amendments thereto as may be
reasonably requested by the Borrower or the Administrative Agent.  All forms or
amendments described in the preceding sentence shall certify that such Lender
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.

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

(f)                
Any Lender that is entitled to an
exemption from or reduction of withholding tax with respect to payments under
this Agreement or any Note pursuant to the law of any relevant jurisdiction or
any treaty shall deliver to the Borrower (with a copy to the Administrative Agent),
at the time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate following receipt
of such documentation.

(g)               
If the U.S. Internal Revenue
Service or any other governmental authority of the United States or any other
country or any political subdivision thereof asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered or
properly completed, because such Lender failed to notify the Administrative
Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Administrative Agent fully for all amounts paid, directly or indirectly, by
the Administrative Agent as tax, withholding therefor, or otherwise, including
penalties and interest, and including taxes imposed by any jurisdiction on
amounts payable to the Administrative Agent under this subsection, together
with all costs and expenses related thereto (including attorneys fees and time
charges of attorneys for the Administrative Agent, which attorneys may be
employees of the Administrative Agent).  The obligations of the Lenders under
this Section 4.5(g) shall survive the payment of the Obligations
and termination of this Agreement and any such Lender obligated to indemnify
the Administrative Agent shall not be entitled to indemnification from the
Borrower with respect to such amounts, whether pursuant to this Article
or otherwise, except to the extent the Borrower participated in the actions
giving rise to such liability.

                                                                            
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4.6              

Lender Statements; Survival of
Indemnity

.  To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its LIBOR Rate Loans to reduce any liability of
the Borrower to such Lender under Sections 4.1, 4.2 and 4.4 or to avoid
the unavailability of LIBOR Rate Advances under Section 4.3, so long as
such designation is not, in the reasonable judgment of such Lender,
disadvantageous to such Lender.  Each Lender shall deliver a written statement
of such Lender to the Borrower (with a copy to the Administrative Agent) as to
the amount due, if any, under Sections 4.1, 4.2, or 4.4.  Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error.  Determination of
amounts payable under such Sections in connection with a LIBOR Rate Loan shall
be calculated as though each Lender funded its LIBOR Rate Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit
used as a reference in determining the LIBOR Rate applicable to such Loan,
whether in fact that is the case or not.  Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement.  The
obligations of the Borrower under Sections 4.1, 4.2, or 4.4 shall
survive payment of the Obligations and termination of this Agreement.

ARTICLE
V

CONDITIONS PRECEDENT

5.1              
Initial Advance.

 The Lenders shall
not be required to make the initial Advance hereunder unless (i) the Borrower
shall, prior to or concurrently with such initial Advance, 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 initial Borrowing
Date no Default or Unmatured 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 initial
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 Compliance Certificate in the
form of Exhibit B, utilizing the covenants established herein and
executed by the Vice President and General Counsel, the Borrower's chief
financial officer or chief executive officer;

(l)                 
"Pay off" letters from the
applicable lenders stating the amounts needed to be repaid to obtain the
release of their Liens on the two initial Qualifying Unencumbered Projects
described in Section 3.1 hereof:

(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              
Each Advance.   

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

(i)                 
There exists no Default or
Unmatured Default;

(ii)               
The representations and warranties
contained in Article VI are true and correct in all material
respects as of such Borrowing Date with respect to the Loan Parties in
existence on such 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; and

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

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

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

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.  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

. 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.   

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            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 Controlled
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 Controlled 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 a Default hereunder.

6.12           
Compliance With Laws.   

Except as set forth in
Schedule 6.6, Borrower is in compliance in all material aspects with all
applicable statutes, rules, regulations, orders and restrictions of any
domestic or 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.   

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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 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.

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

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.  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

.  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

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.           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);

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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 Default or Unmatured Default exists, or if, to such officer's
knowledge, any Default or Unmatured Default exists, stating the nature and
status thereof;

(d)              
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;

(e)               
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 Recourse Indebtedness and or on any Non-Recourse Indebtedness that
exceeds $25,000,000, (v) any notice of default on interest rate hedge
agreements, and (vi) any other default under any obligations of any Loan Party
would reasonably be expected to have a Material Adverse Effect;

(f)                
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;

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

(h)               
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

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.  The Borrower may
use the proceeds of the Advances to refinance existing Indebtedness, to provide
working capital, to support ongoing Projects, to repurchase outstanding Capital
Stock of Borrower and to acquire additional Projects.  The Borrower will not,
nor will it permit any Subsidiary to, use any of the proceeds of the Advances
(i) to purchase or carry any "margin stock" (as defined in Regulation U) 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.

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 Default or
Unmatured 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, neither the Borrower nor its
Subsidiaries may undertake any business other than the acquisition,
development, ownership, management, operation and leasing of multifamily
residential properties, and ancillary businesses specifically related to such
types of properties, including without limitation its third party management,
investment advisory, and painting businesses.

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.

                                                                            
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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.

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           

Major Transactions

.  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

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.  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

(f)                
Rate Management Transactions
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;

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(e)               
Liens on Projects to secure any
Indebtedness to the extent such Liens will not result in a 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 $60,000,000 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 $334,938,331 plus
eighty-five percent (85%) of the Net Proceeds of any Equity Issuance received
after the Agreement Execution Date.

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 0.65:1 at the
end of any fiscal quarter;

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

(c)               
The ratio of Unencumbered Real
Property Value to Consolidated Unsecured Indebtedness to be less than 2.00:1 at
any time; and  

(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 2.40:1.

7.21           

Environmental Matters

.  Borrower and its
Subsidiaries shall:

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(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.

(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.

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(d)              
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.

(e)               
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-five percent (25%) 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.  The Administrative Agent and its counsel have
determined an intercreditor agreement is not required to confirm such
subordination of Borrower's existing trust preferred Indebtedness.   

7.24           
Limits on Ownership
Encumbrances.  

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

DEFAULTS

The
occurrence of any one or more of the following events shall constitute a
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. 
 

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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 a
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, 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.  

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.

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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 "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           
 

8.13           
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 a 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 a
Default hereunder.

ARTICLE
IX

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

9.1              

Acceleration

.  If any 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 Default occurs, so long as a Default exists
Lenders shall have no obligation to make any Loans and the Required Lenders, at
any time prior to the date that such 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.

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

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 Default
(other than any 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 VIII 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
Default hereunder; provided, however, that no such supplemental agreement or
waiver shall, without the consent of all Lenders:

(a)               
Extend the Facility Termination
Date (except as provided in Section 2.22), or forgive all or any portion
of the principal amount of any Loan or accrued interest thereon or the Commitment
Fee, 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)              
Increase the Aggregate Commitment.

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

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

No
amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent.

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 Default or an acquiescence therein, and the making of a Loan
notwithstanding the existence of a 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.

                                                                            
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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

.  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.

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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 (or
the Issuing Bank) 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

.  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       

CONSENT TO JURISDICTION

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.  THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR OHIO STATE COURT SITTING IN CLEVELAND IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.  ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT
OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY
IN A COURT IN CLEVELAND, OHIO.

10.14       

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

.  National City Bank,
is hereby appointed Administrative Agent hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Administrative
Agent to act as the agent of such Lender.  The Administrative Agent agrees to
act as such upon the express conditions contained in this Article X. 
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have
any fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Administrative Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents.  In its
capacity as the Lenders' contractual representative, the Administrative Agent
(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is
a "representative" of the Lenders within the meaning of the term "secured
party" as defined in the Ohio Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents.  Each of
the Lenders hereby agrees to assert no claim against the Administrative Agent
on any agency theory or any other theory of liability for breach of fiduciary
duty, all of which claims each Lender hereby waives.

11.2           

Powers

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

                                                                            
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11.3           

General Immunity

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

11.4           
No Responsibility for Loans,
Recitals, etc.

 Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any condition
specified in Article IV, except receipt of items required to be
delivered to the Administrative Agent; (iv) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished
in connection therewith; (v) the value, sufficiency, creation, perfection, or
priority of any interest in any collateral security; or (vi) the financial
condition of the Borrower or any Subsidiary Guarantor.  Except as otherwise
specifically provided herein, the Administrative Agent shall have no duty to
disclose to the Lenders information that is not required to be furnished by the
Borrower to the Administrative Agent at such time, but is voluntarily furnished
by the Borrower to the Administrative Agent (either in its capacity as Administrative
Agent or in its individual capacity).

11.5           

Action on Instructions of
Lenders

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

11.6           

Employment of Agents and
Counsel

.  The Administrative
Agent may execute any of its duties as Administrative Agent hereunder and under
any other Loan Document by or through employees, agents, and attorneys-in-fact
and shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care.  The
Administrative Agent shall be entitled to advice of counsel concerning all
matters pertaining to the agency hereby created and its duties hereunder and
under any other Loan Document.

                                                                            
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11.7           

Reliance on Documents; Counsel

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

11.8           

Administrative Agent's
Reimbursement and Indemnification

.  The Lenders agree
to reimburse and indemnify the Administrative Agent ratably in proportion to
their respective Commitments (i) for any amounts not reimbursed by the Borrower
for which the Administrative Agent is entitled to reimbursement by the Borrower
under the Loan Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents, if not paid by Borrower and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Loan Documents or any other document delivered in
connection therewith or the transactions contemplated thereby (including
without limitation, for any such amounts incurred by or asserted against the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders), or the enforcement
of any of the terms thereof or of any such other documents, provided that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct or a breach of the Administrative
Agent's express obligations and undertakings to the Lenders.  The obligations
of the Lenders and the Administrative Agent under this Section 11.8
shall survive payment of the Obligations and termination of this Agreement.

11.9           

Rights as a Lender

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

11.10       

Lender Credit Decision

.  Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on the financial statements
prepared by the Borrower and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and the other Loan Documents.  Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative Agent
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 this Agreement and the other Loan Documents.

                                                                            
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11.11        
Successor Administrative Agent

.  Except as otherwise
provided below, National City Bank shall at all times serve as the
Administrative Agent during the term of this Facility.  The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders
and the Borrower, such resignation to be effective upon the appointment of a
successor Administrative Agent.  If the Administrative Agent has been grossly
negligent in the performance of its obligations hereunder, the Administrative
Agent may be removed at any time by written notice received by the
Administrative Agent from all other Lenders, such removal to be effective on
the date specified by the other Lenders.  Upon any such resignation or removal,
the Required Lenders, with the reasonable approval of the Borrower (as long as
no Default has occurred and is then continuing), shall appoint, on behalf of
the Borrower and the Lenders, a successor Administrative Agent.  If no
successor Administrative Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Administrative Agent's giving
notice of its intention to resign, then the resigning Administrative Agent
shall appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent.  Notwithstanding the previous sentence, the
Administrative Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor
Administrative Agent hereunder.  No successor Administrative Agent shall be
deemed to be appointed hereunder until such successor Administrative Agent has
accepted the appointment.  Any such successor Administrative Agent shall be a commercial
bank having capital and retained earnings of at least $500,000,000.  Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent.  Upon the effectiveness of
the resignation or removal of the Administrative Agent, the resigning or
removed Administrative Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents.  After the effectiveness of
the resignation or removal of an Administrative Agent, the provisions of this Article
X shall continue in effect for the benefit of such Administrative Agent in
respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents.

11.12       

Notice of Defaults

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

11.13       

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.

11.14       

Defaulting Lenders

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.  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 11.14. 
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 a 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

.  In addition to, and
without limitation of, any rights of the Lenders under applicable law, if the
Borrower becomes insolvent, or any 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
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 Default.  

12.2           

Ratable Payments

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

ARTICLE
XIII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

13.1           

Successors and Assigns

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

13.2           
Participations.

(a)               
Permitted Participants; Effect.  Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks, financial institutions, pension funds, or any other funds or entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender
under the Loan Documents.  In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.  Any Lender selling
such participation interests in the Loan to any Participant shall remain the
party entitled to enforce Borrower's obligations arising under Article 4 and
Borrower shall have no liability whatsoever to any Participants under such
Article 4.

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

(c)               
Benefit of Setoff.  The Borrower agrees that each
Participant which has previously advised the Borrower in writing of its
purchase of a participation in a Lender's interest in its Loans shall be deemed
to have the right of setoff provided in Section 12.1 in respect of
its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents.  Each Lender shall retain the right
of setoff provided in Section 12.1 with respect to the amount of
participating interests sold to each Participant, provided that such Lender and
Participant may not each setoff amounts against the same portion of the
Obligations, so as to collect the same amount from the Borrower twice.  The
Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 12.1, agrees to share
with each Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 12.2 as if
each Participant were a Lender.

13.3           
Assignments.

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

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(b)              
Effect; Effective Date.  Upon (i) delivery to the Administrative Agent and
Borrower of a notice of assignment, substantially in the form attached as
Exhibit "I" to Exhibit D hereto (a "Notice of Assignment"),
together with any consents required by Section 13.3.1, and (ii)
payment of a $3,500 fee by the assignor or assignee to the Administrative Agent
for processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment.  The Notice of
Assignment shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment and Loans
under the applicable assignment agreement are "plan assets" as defined under
ERISA and that the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA.  On and after the effective
date of such assignment, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Document executed by the Lenders and
shall have all the rights and obligations of a Lender under the Loan Documents,
to the same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Administrative Agent
shall be required to release the transferor Lender, and the transferor Lender
shall automatically be released on the effective date of such assignment, with
respect to the percentage of the Aggregate Commitment and Loans assigned to
such Purchaser.  Upon the consummation of any assignment to a Purchaser
pursuant to this Section 13.3.2, the transferor Lender, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that replacement Notes are issued to such transferor Lender and new Notes or,
as appropriate, replacement Notes, are issued to such Purchaser, in each case
in principal amounts reflecting their Commitment, as adjusted pursuant to such
assignment.

13.4           
Dissemination of Information.  

The Borrower
authorizes each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in
such Lender's possession concerning the creditworthiness of the Borrower and
its Subsidiaries, subject to Section 10.11 of this Agreement.

13.5           
Tax Treatment.   

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

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

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ARTICLE
XVI

COUNTERPARTS

This
Agreement 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 Agreement by signing any such counterpart.  This Agreement shall
be effective when it has been executed by the Borrower, the Administrative
Agent and the Lenders and each party has notified the Administrative Agent by
telex or telephone, that it has taken such action.

(Remainder of page intentionally left
blank.)

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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/ Jeffrey I. Friedman

            Name:  Jeffrey I. Friedman

            Title:     President

1 AEC Parkway

Richmond Heights,
 Ohio  44143

Attention:  Chief Financial Officer &
Legal Department

Phone:  216-261-3902

Facsimile:  216-797-8779

With a copy to:

Greenberg Traurig, LLP

  77 West Wacker Drive

  Chicago, Illinois  60601

Attention:  Michael T. Fishman

Phone:  312- 476-5075

Fax:  312-456-8435

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COMMITMENT:                                              NATIONAL
CITY BANK,  

$30,000,000                                                       Individually
and as Administrative Agent

            By:       /s/Martin D. Rodriguez

            Name:  Martin D. Rodriguez

            Title:     Vice
President

                                    National City Bank

                                    Investment Real
Estate

                                    One Chagrin
Highlands

                                    2000 Auburn Drive, Suite 400

                                    Beachwood, Ohio  44122-4327

                                    Attention:  Martin
D. Rodriguez

                                    Phone: 
216-488-9123

                                    Facsimile: 
216-488-3160

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COMMITMENT:                                              WELLS
FARGO BANK, N.A.  

$25,000,000

 

 

            By:       /s/ A. Geraldi Perry

            Name:  A. Geraldi Perry

            Title:     Assistant
Vice President

                                    200 Public Square

                                    Suite 200

                                    Cleveland, OH  44114

                                    Attention:  Toni
G. Perry

                                    Phone: 
216-344-6946

                                    Facsimile: 
216-344-6971

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COMMITMENT:                                              RAYMOND
JAMES BANK, FSB

$25,000,000

 

            By:       /s/ Thomas F. Macina   
 

            Name:  Thomas F. Macina

            Title:     Senior
Vice President

                                    710 Carillon Parkway

                                    St. Petersburg, FL  33716

                                    Attention:  James
M. Armstrong

                                    Phone: 
727-567-7919

                                    Facsimile: 
727-567-8830

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COMMITMENT:                                              THE
HUNTINGTON NATIONAL BANK

$20,000,000

 

            By:       /s/ Timothy B. Smith

            Name:  Timothy B. Smith

            Title:     Officer

                                    917 Euclid Avenue, CM17

                                    Cleveland, OH  44115

                                    Attention: 
Jennifer Hearns

                                    Phone:
216-515-6923

                                    Facsimile:
216-515-0179

with notice to:

 

917
  Euclid Avenue, CM17

                                    Cleveland, OH  44115

                                    Attention:  Timothy
Smith

                                    Phone:
216-515-0368

                                    Facsimile:
216-515-0179

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EXHIBIT A

FORM OF NOTE

____________, 2007

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 Credit Agreement (as the same may
be amended or modified, the "Agreement") hereinafter referred to, in
immediately available funds at the main office of National City Bank 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 Credit Agreement,
dated as of ____________, 2007 among the Borrower, National City Bank,
individually and as Administrative Agent, and the other Lenders named therein,
to which Agreement, as it may be amended from time to time, reference is 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 a 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-6

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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-7

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14534489\V-10

 

SCHEDULE OF LOANS AND PAYMENTS OF
PRINCIPAL

TO

NOTE OF ASSOCIATED ESTATES REALTY
CORPORATION

DATED ___________, 2007

                                                                                               Maturity

                           Principal                    Maturity                      Principal

                           Amount
of                 of Interest                   Amount                        Unpaid

Date                    Loan                          Period                         Paid                             
 Balance

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

______________________________________________________________________________
 

A-8

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14534489\V-10

EXHIBIT B

COMPLIANCE CERTIFICATE

 

National City Bank, as Administrative Agent

Investment Real Estate

One Chagin Highlands

2000 Auburn Drive

Suite 400

Cleveland, OH  44122-4327

	
  Re:

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

  

Reference is made to the Agreement.  Capitalized 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.

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.

B-1

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14534489\V-10

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 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 April, 2007.

ASSOCIATED
ESTATES REALTY CORPORATION,

an Ohio corporation

By:            
                                                                        
 

Name:       
                                                                        
 

Title:          
                                                                        
 

B-2

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14534489\V-10

SCHEDULE A

FINANCIAL DATA AND
COMPUTATIONS

B-3

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14534489\V-10

 

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
Credit Agreement identified below  (as amended, the "Credit 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 Credit 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 Credit 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 swingline 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 Credit 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 Credit Agreement

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

                                                                           C-1

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14534489\V-10

6.          Assigned Interest:        

	
  Facility Assigned[2]

  	
  Aggregate Amount of Commitment/Loans
  for all Lenders*

  	
  Amount of Commitment/Loans Assigned*

  	
  Percentage Assigned of Commitment/Loans[3]

  
	

  	
  $

  	
  $

  	
  
              %

  
	

  	
  $

  	
  $

  	
  
              %

  
	

  	
  $

  	
  $

  	
  
              %

  

[7.        Trade
Date:                  ______________][4]

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][5]
Accepted:

National City Bank,  

as Administrative Agent

By_________________________________

 Title:

[Consented to:][6] 

Associated Estates Realty
Corporation

By________________________________

                                                                                                    

 Title:                                                                                        C-2

ANNEX 1

(_________)[7]

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
Credit Agreement or any other Credit Document[8],
(ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Documents or any collateral thereunder,
(iii) the financial condition of the Borrower, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Credit 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
Credit 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 Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement), (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Credit 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 Credit 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[9],
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit 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 Credit Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Credit Documents
are required to be performed by it as a Lender.

                                                                          
C-3

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14534489\V-10

                        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.[10]

                        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

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14534489\V-10

EXHIBIT D

SUBSIDIARY
GUARANTY

This Guaranty is made as of
April __, 2007 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 National City Bank, individually
("National City") and as administrative agent ("Administrative Agent")
for itself and the lenders under the Credit 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
revolving credit facility available to Borrower in an aggregate principal
amount of $100,000,000 (the "Facility").

B.         The Lenders have
agreed to make available the Facility to Borrower pursuant to the terms and
conditions set forth in an Credit 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
"Credit Agreement").  All capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the Credit
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 Commitment and promissory notes in the
principal amount, if any, 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 Credit 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 Credit 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 Credit 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 Credit Agreement, and the
other Loan Documents;

14534489\V-10

(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
Credit 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 Credit Agreement, and the other Loan Documents.

- 6 -

14534489\V-10

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 Credit 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 Credit 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 Credit 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 Credit 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
Credit 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 Credit
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
Credit 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.

- 7 -

14534489\V-10

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 Credit 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 Credit 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 Credit 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 Credit 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 Credit 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 Credit
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.

- 8 -

14534489\V-10

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 a Default
or Unmatured Default exists under the Credit Agreement or the Loan Documents,
and any such payments to Subsidiary Guarantors made while any Default or
Unmatured Default then exists under the Credit 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:

c/o Associated Estates Realty Corporation

1 AEC Parkway

Richmond Heights,
 Ohio 44143

Attention:                                 
 

Telephone:                               
 

- 9 -

14534489\V-10

Facsimile:                                 
 

With a copy to:

Associated Estates Realty Corporation

1 AEC Parkway

Richmond Heights,
 Ohio 44143

Attention:

Telephone:

Facsimile:  216-488-3160

To National City Bank as Administrative
Agent and as a Lender:

National City Bank

Investment Real
Estate

One Chagrin
Highlands

2000 Auburn Drive, Suite
  400

Cleveland, Ohio 44122-4327

Attention:  Martin D. Rodriguez

Phone:  216-488-9123

Facsimile:  216-488-9123

                        With a copy to: 
 

National City Bank

Agent Services

629 Euclid Ave.

LOC 01-3028, 2nd Floor

Cleveland, Ohio 44114

Attention:  Scott
Lankford

Phone: 216-222-9462

Facsimile:                                 
 

With a copy to:

Sonnenschein Nath & Rosenthal LLP

7800 Sears Tower

Chicago, Illinois  60606

Attention:  Patrick G. Moran, Esq.

Telephone:  (312) 876-8132

Facsimile:  (312) 876-7934

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

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.

- 10 -

14534489\V-10

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.  - 11 -

14534489\V-10

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

AERC COUNTRY PLACE, LLC

FEIN
NO. 34-1907439

By:    AERC Country I, Inc.

         Its Managing Member

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

AERC COURTNEY CHASE, LLC

FEIN
NO. 38-3647187

By:    Associated Estates Realty
Corporation

By:                                                                  
 

Name: Martin A. Fishman,
 

Title:  Vice President
 

ELLET APARTMENTS, INC.

FEIN NO.  34-1749276

By:                                                                  
 

Name: Martin A. Fishman

Title:  Vice President

AERC FLEETWOOD, L.P.

FEIN
NO. 52-2167336

By:    AERC Fleet Corporation, Inc.

         Its General Partner

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    AERC
KTC PROPERTIES, INC.

FEIN
NO. 52-2167393

 

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

- 12 -

14534489\V-10

 

                                                                                    AERC
MORGAN PLACE, INC.

FEIN
NO. 34-1888645

By:                                                                  
 

Name: Martin A. Fishman

Title:  Vice President

AERC-WATERGATE, INC.

FEIN
NO. 01-0657229

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    AERC-REMINGTON
PLACE, INC.

FEIN
NO. 52-2167382

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

PURITAS PLACE APARTMENTS, INC.

FEIN
NO. 34-1749273

 

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    RIVERVIEW
TOWERS APARTMENTS,  

                                                                                    INC.

FEIN
NO. 34-1749278

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

14534489\V-10

 

SHAKER PARK GARDENS II, INC.

FEIN
NO. 34-1749286

 

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

                                                                                   
 

                                                                                    STATE
ROAD APARTMENTS, INC.

FEIN
NO. 34-1749274

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

STATESMAN II APARTMENTS, INC.

FEIN
NO. 34-1749263

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    SUTLIFF
APARTMENTS, INC.

FEIN
NO. 34-1749265

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

TALLMADGE ACRES APARTMENTS,

INC.

FEIN
NO. 34-1749280

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    TWINSBURG
APARTMENTS, INC.

FEIN
NO. 34-1749283

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

14534489\V-10

VILLAGE TOWER APARTMENTS, INC.

FEIN
NO. 34-1749259

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

                                                                                    SANDLER
at ALTA LAGO, L.L.C.

FEIN
NO. 01-0668680

By:  Associated Estates Realty Corporation

Its Manager

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

AERC WILLIAMSBURG, INC.

FEIN
NO. 34-1907371

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

WEST HIGH APARTMENTS, INC.

FEIN
NO. 34-1749284

By:                                                                  
 

Name:  Martin A. Fishman

Title:  Vice President

 

 

                                                                            2E-1

ncbcrex.htm

14534489\V-10

EXHIBIT A TO SUBSIDIARY GUARANTY

FORM OF JOINDER TO
GUARANTY

THIS JOINDER is executed as of
April __, 2007 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 April __, 2007
executed for the benefit of National City Bank, 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
Credit 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:        ____________________________

                                                                            2E-2

ncbcrex.htm

14534489\V-10

EXHIBIT
E

FORM OF OPINION OF BORROWER'S COUNSEL

April ___, 2007

National City Bank, as Agent  

Investment Real Estate

One Chagrin Highlands

2000 Auburn Drive, Suite 400

Cleveland, Ohio 44122-4327

Re:      
 $100,000,000
Credit Facility 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 $100,000,000 unsecured
revolving credit facility, (the "Loan"), which Loan is being made pursuant to
that certain Credit Agreement dated as of April ___, 2007 (the "Credit
Agreement") among the Borrower, National City Bank and the several lenders from
time to time parties thereto (collectively, the "Lenders"), and National City
Bank, 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 Credit Agreement;
 

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

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

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

                                                                            2E-3

ncbcrex.htm

14534489\V-10

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.   

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 Credit 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.

                                                                            2E-4

ncbcrex.htm

14534489\V-10

(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.

(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.

                                                                            2E-5

ncbcrex.htm

14534489\V-10

(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.

            (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.

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

                                                                            2E-6

ncbcrex.htm

14534489\V-10

Exhibit A

AERC Subsidiary
Guarantors

                                                                 State
of Incorporation

AERC Country Place, LLC.                                Delaware

AERC Fleetwood, L.P.                                       Delaware

AERC KTC Properties, Inc.                               Delaware

AERC Morgan Place, Inc.                                   Delaware

AERC Remington Place, Inc.                               Delaware

AERC-Watergate, Inc.                                        Ohio

AERC Williamsburg, Inc.                                    Delaware

Ellet Apartments, Inc.                                          Ohio

Puritas Place Apartments, Inc.                             Ohio

Riverview Towers Apartments, Inc.                     Ohio

Shaker Park Gardens II, Inc.                               Ohio

State Road Apartments, Inc.                                Ohio

Statesman II Apartments, Inc.                              Ohio

Sutliff Apartments, Inc.                                        Ohio

Tallmadge Acres Apartments, Inc.                       Ohio

Twinsburg Apartments, Inc.                                 Ohio

Village Tower Apartments, Inc.                           Ohio

Sandler at Alta Lago, L.L.C.                               Virginia

AERC-Courtney Chase, LLC                             Delaware

West High Apartments, Inc.                                 Ohio

                                                                            2E-7

ncbcrex.htm

14534489\V-10

EXHIBIT F

BORROWING
NOTICE

___________, 2007

National City Bank  

Investment Real Estate

One Chagrin Highlands

2000 Auburn Drive, Suite 400

Cleveland, Ohio 44122-4327

Borrowing Notice

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

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

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 Credit 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:        _________________________________

                                                                            G-12

ncbcrex.htm

14534489\V-10

SCHEDULE
3.1

 

INITIAL
QUALIFYING UNENCUMBERED

PROJECTS
AND SUBSIDIARY GUARANTORS

 

 

ncbcrex.htm

14534489\V-10

 

SCHEDULE 6.6

 

LITIGATION

 

(See
Section 6.6)

ncbcrex.htm

14534489\V-10

Schedule 6.7

 

SUBSIDIARIES OF BORROWER

ncbcrex.htm

14534489\V-10

SCHEDULE 6.13

 

EXCEPTIONS,
IF ANY, TO OWNERSHIP FREE OF UNPERMITTED LIENS

 

(See
Section 6.13)

None.

ncbcrex.htm

14534489\V-10

SCHEDULE 6.19

 

ENVIRONMENTAL
MATTERS

 

(See
Section 6.19)

ncbcrex.htm

14534489\V-10

SCHEDULE
6.19

 

ENVIRONMENTAL
MATTERS

 

 

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

ncbcrex.htm

14534489\V-10

  

[1] Select as applicable.

[2] Fill in the appropriate
terminology for the types of facilities under the Credit Agreement that are
being assigned under this Assignment (e.g. "Revolving Credit Commitment," "Term
Loan Commitment," etc.)

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

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

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

[5] To be added only if the
consent of the Administrative Agent is required by the terms of the Credit
Agreement.

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

[7] Describe Credit
Agreement at option of Administrative Agent.

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

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

[10] 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."deferred compensation plan

ASSOCIATED ESTATES REALTY CORPORATION

ELECTIVE DEFERRED COMPENSATION PLAN

Associated Estates Realty Corporation hereby establishes,
effective as of June 18, 2007,  the Associated Estates Realty Corporation
Elective Deferred Compensation Plan on the terms and conditions set forth
below.  The Plan is unfunded and maintained primarily for the purpose of
providing deferred compensation to a select group of management or highly
compensated employees.  The Plan provides certain eligible employees with the
opportunity to defer portions of their base salary and incentive compensation
all in accordance with the provisions of the Plan.   

ARTICLE
I

DEFINITIONS

For purposes of the Plan, the following words and phrases
shall have the meanings set forth below, unless their context clearly requires
a different meaning: 

 "Account" means the bookkeeping account
maintained by the Committee on behalf of each Participant pursuant to this
Plan.  The sum of each Participant's Sub-Accounts, in the aggregate, shall
constitute his Account.  The Account and each and every Sub-Account shall be a
bookkeeping entry only and shall be used solely as a device to measure and
determine the amounts, if any, to be paid to a Participant or his Beneficiary
under the Plan.

"Affiliated Group" means (i) the Company,
and (ii) all entities with whom the Company would be considered a single
employer under Sections 414(b) and 414(c) of the Code, provided that in
applying Section 1563(a)(1), (2), and (3) for purposes of determining a
controlled group of corporations under Section 414(b) of the Code, the language
"at least 50 percent" is used instead of "at least 80
percent" each place it appears in Section 1563(a)(1), (2), and (3), and in
applying Treasury Regulation Section 1.414(c)-2 for purposes of determining trades
or businesses (whether or not incorporated) that are under common control for
purposes of Section 414(c), "at least 50 percent" is used instead of
"at least 80 percent" each place it appears in that regulation.   
Such term shall be interpreted in a manner consistent with the definition of
"service recipient" contained in Section 409A of the Code.   

"Award" means any Incentive Compensation
which is payable in the form of restricted shares of the Company.

"Base Salary" means the annual base rate
of cash compensation payable by the Affiliated Group to a Participant during a
calendar year, excluding Incentive Compensation, bonuses, severance payments,
qualified plan contributions or benefits, expense reimbursements, fringe
benefits and all other payments, and prior to reduction for any deferrals under
this Plan or any other plan of the Affiliated Groups under Sections 125 or
401(k) of the Code.   For purposes of this Plan, Base Salary payable after the
last day of a calendar year solely for services performed during the final
payroll period described in Section 3401(b) of the Code containing December 31
of such year shall be treated as earned during the subsequent calendar year.

"Beneficiary" or "Beneficiaries"
means the person or persons, including one or more trusts, designated by a
Participant in accordance with the Plan to receive payment of the remaining
balance of the Participant's Account in the event of the death of the
Participant prior to the Participant's receipt of the entire vested amount credited
to his Account. 

"Beneficiary Designation Form" means the
form established from time to time by the Committee (in a paper or electronic
format) that a Participant completes signs and returns to the Committee to
designate one or more Beneficiaries.   

"Board" means the Board of Directors of
the Company. 

 "Change in
Control" means the occurrence of a "change in the
ownership," a "change in the effective control" or a
"change in the ownership of a substantial portion of the assets" of
the Company within the meaning of Section 409A of the Code.[1]    

"Code" means the Internal Revenue Code
of 1986, as amended.

"Commencement Date" has the meaning
given to such term in Section 2.3 hereof.   

"Committee" means the committee
appointed to administer the Plan.  Unless and until otherwise specified, the
Committee under the Plan shall be the Executive Compensation Committee, or its
designee.  

"Company" means Associated Estates
Realty Corporation and its successors, including, without limitation, the
surviving corporation resulting from any merger or consolidation of Associated
Estates Realty Corporation with any other corporation, limited liability
company, joint venture, partnership or other entity or entities. 

"Deferral Election" means the
Participant's election on a form approved by the Committee to defer a portion
of his Base Salary, Incentive Compensation or both in accordance with the
provisions of Article III.

"Disability" means the condition of
being unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, as determined by the Committee.

"Eligible Employee" has the meaning
given to such term in Section 2.1 hereof. 

"ERISA" means the Employee Retirement
Income Security Act of 1974, as amended.

"Incentive Compensation" means cash
compensation or restricted share awards provided as an annual bonus or pursuant
to an incentive compensation or retention plan, including but not limited to an
annual or long-term incentive compensation plan, whether such plan is now in
effect or hereafter established by the Company or Affiliated Group, which the
Committee may designate from time to time. 

                                                                       2

"In-Service Sub-Account" means each
bookkeeping In-Service Sub-Account maintained by the Committee on behalf of
each Participant pursuant to Article IV hereof.  

"Participant" means any Eligible
Employee who (i) at any time elected to defer the receipt of Base Salary and/or
Incentive Compensation in accordance with the Plan, and (ii) in conjunction
with his Beneficiary, has not received a complete payment of the vested amount
credited to his Account.

"Payment Election" means the
Participant's election on a form approved by the Committee that is filed along
with a Deferral Election and that sets forth the time and form of payment of
such deferrals as provided in Article IV.

"Performance-Based Compensation" means
Incentive Compensation that is based on services performed over a period of at
least twelve (12) months and that constitutes "performance-based
compensation" within the meaning of Section 409A of the Code.  Where a
portion of an amount of Incentive Compensation would qualify as Performance-Based
Compensation if the portion were the sole amount available under a designated
incentive plan, that portion of the award will not fail to qualify as
Performance-Based Compensation if that portion is designated separately by the
Committee on the Deferral Election or is otherwise separately identifiable
under the terms of the designated incentive plan, and the amount of each
portion is determined independently of the other.

"Performance Period" means, with respect
to any Incentive Compensation, the period of time during which such Incentive
Compensation is earned.     

"Plan" means this deferred compensation
plan, which shall be known as the Associated Estates Realty Corporation
Deferred Elective Compensation Plan.

"Retirement Sub-Account" means the
bookkeeping Retirement Sub-Account maintained by the Committee on behalf of
each Participant pursuant to Article IV hereof.

                                                                       3

"Separation from Service" means a
termination of employment with the Affiliated Group in such a manner as to
constitute a "separation from service" as defined under Section 409A
of the Code.  For this purpose, the employment relationship is treated as
continuing intact while a Participant is on military leave, sick leave, or
other bona fide leave of absence if the period of such leave does not exceed six
(6) months, or if longer, so long as the individual retains a right to
reemployment with the Affiliated Group under an applicable statute or by
contract.  For purposes of this definition, a leave of absence constitutes a
bona fide leave of absence only if there is a reasonable expectation that the
Participant will return to perform services for the Affiliated Group.  If the
period of leave exceeds six (6) months and the Participant does not retain a
right to reemployment under an applicable statute or by contract, the
employment relationship is deemed to terminate on the first date immediately
following such six-month period.  Notwithstanding the foregoing, where a leave
of absence is due to any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than six (6) months, where such impairment causes
the Participant to be unable to perform the duties of his or her position of
employment or any substantially similar position of employment, a 29-month
period of absence may be substituted for such six-month period.[2]

"Specified Employee" means a key
employee (as defined in Section 416(i) of the Code without regard to Section
416(i)(5) of the Code) of the Company (or any entity which would be considered
to be a single employer with the Company under Section 414(b) or Section 414(c)
of the Code) at any time during the twelve (12) month period ending on December
31.  Notwithstanding the foregoing, a Participant who is a key employee
determined under the preceding sentence will be deemed a Specified Employee
solely for the period of April 1 through March 31 following such December 31.
Such term shall be interpreted in a manner consistent with Section 409A of the
Code.[3]

"Stock Deferral Sub-Account" means each
bookkeeping Stock Deferral Sub-Account maintained by the Committee on behalf of
each Participant pursuant to Article IV hereof.

"Stock Deferral Unit" means a unit of a
phantom investment that mirrors the performance of Company common stock.

"Sub-Account" means each bookkeeping
Retirement Sub-Account and In-Service Sub-Account maintained by the Committee
on behalf of each Participant pursuant to the Plan.

"Subsequent Payment Election" has the
meaning given to such term in Section 7.1(c) hereof.  

"Unforeseeable Emergency" means a severe
financial hardship to a Participant resulting from (i) an illness or accident
of the Participant or Beneficiary or his spouse or dependent (as defined in
Section 152(a) of the Code without regard to Sections 152(b)(1), (b)(2), and
(d)(1)(B)), (ii) loss of the Participant's property due to casualty (including
the need to rebuild a home following damage to a home not otherwise covered by
insurance, for example, not as a result of a natural disaster), or (iii) other
similar extraordinary and unforeseeable circumstance arising as a result of
events beyond the control of the Participant.  For example, the imminent
foreclosure of or eviction from the Participant's primary residence may
constitute an unforeseeable emergency.  In addition, the need to pay for
medical expenses, including nonrefundable deductibles, as well as for the costs
of prescription drug medication, may constitute an unforeseeable emergency. 
Finally, the need to pay for the funeral expenses of a spouse, a Beneficiary,
or a dependent (as defined above) may also constitute an Unforeseeable
Emergency.  Except as otherwise provided above, the purchase of a home and the
payment of college tuition are not unforeseeable emergencies.  Such term shall
be interpreted in a manner consistent with the definition of
"unforeseeable emergency" contained in Section 409A of the Code.

                                                                       4

ARTICLE
II

ELIGIBILITY

2.1.           
Selection by Committee.  Participation in the Plan is
limited to those employees of the Affiliated Group who are (i) expressly
selected by the Committee, in its sole discretion, to participate in the Plan,
and (ii) a member of a "select group of management or highly compensated
employees," within the meaning of Sections 201, 301 and 401 of ERISA (the
"Eligible Employees"); provided that on the date the Plan becomes
effective the Eligible Employees shall be each appointed or elected officer of
the Company.  In lieu of expressly selecting Eligible Employees for Plan
participation, the Committee may establish eligibility criteria (consistent
with the requirements of paragraph (ii) of this Section) providing for
participation of all Eligible Employees who satisfy such criteria.  The
Committee may at any time, in its sole discretion, change the eligibility criteria
for Eligible Employees, or determine that one or more Participants will cease
to be an Eligible Employee.    

2.2.           
Enrollment Requirements.  As a condition to
participation, each selected Eligible Employee shall complete, execute and
return to the Committee a Deferral Election, Payment Election and Beneficiary
Designation Form no later than the date or dates specified by the Committee. 
In addition, the Committee may establish from time to time such other
enrollment requirements as it determines in its sole discretion are necessary. 

2.3.           
Commencement Date.  Each Eligible Employee shall
commence participation on the date designated by the Committee (the
"Commencement Date"), provided that the Commencement Date for persons
who are Eligible Employees on the date the Plan becomes effective, shall be
June 18, 2007; and provided, further, that if an Eligible Employee has not
satisfied the applicable enrollment requirements of Section 2.2 within thirty
(30) days of his Commencement Date (or such earlier date as specified by the
Committee), such Eligible Employee's Commencement Date shall be the first day
of the calendar year next following the date the Eligible Employee satisfies
such enrollment requirements.   

2.4.           
Termination.  An Eligible Employee's entitlement to
defer Base Salary and Incentive Compensation shall cease with respect to the
calendar year (or the Performance Period, as the case may be) following the
calendar year (or the Performance Period, as the case may be) in which he
ceases to be an Eligible Employee, although such individual shall continue to
be subject to all of the terms and conditions of the Plan for as long as he
remains a Participant.

ARTICLE
III

DEFERRAL ELECTIONS

3.1.           
New Participants.  

                                                                       5

(a)               
Qualification as a New Participant.  This Section 3.1
applies to each Eligible Employee (i) whose Commencement Date occurs after the
first day of a calendar year but prior to October 1 of such calendar year (or
such earlier or later date as specified by the Committee from time to time),
and (ii) who was not previously eligible to participate in the Plan or another
plan that is required to be aggregated with the Plan under Section 409A of the
Code.  For this purpose, where an Eligible Employee has ceased being eligible
to participate in a Plan (other than the accrual of earnings), regardless of
whether his entire Account balance has been paid, and subsequently becomes an
Eligible Employee again, the individual may be treated as being initially
eligible to participate in the Plan if the individual had not been an Eligible
Employee at any time during the 24-month period ending on the date the
individual again becomes and Eligible Employee.  

(b)              
Deferral Election.  An Eligible Employee described in
Section 3.1(a) may elect to defer his Base Salary earned during such calendar
year or his Incentive Compensation earned during a Performance Period that
commences in such calendar year by filing a Deferral Election with the
Committee in accordance with the following rules:

(i)                 
Timing; Irrevocability.  The Deferral Election must be
filed with the Committee by, and shall become irrevocable as of, the thirtieth
(30th) day following the Participant's Commencement Date (or such earlier date
as specified by the Committee on the Deferral Election).   

(ii)               
Base Salary.  The Deferral Election shall only apply to
Base Salary earned during such calendar year beginning with the first payroll
period that begins immediately after the date that the Deferral Election
becomes irrevocable in accordance with Section 3.1(b)(i) hereof.  

(iii)              
Incentive Compensation.  Where a Deferral Election is made
in the first year of eligibility but after the commencement of a Performance
Period, then, except as otherwise provided in Section 3.2 below, the Deferral
Election shall only apply to that portion of Incentive Compensation earned for such
Performance Period equal to the total amount of the Incentive Compensation
earned during such Performance Period multiplied by a fraction, the numerator
of which is the number of days beginning on the day immediately after the date
that the Deferral Election becomes irrevocable in accordance with Section
3.1(b)(i) hereof and ending on the last day of the Performance Period, and the
denominator of which is the total number of days in the Performance
Period.      

3.2.           
Annual Deferral Elections.  Unless Section 3.1
applies, each Eligible Employee may elect to defer Base Salary for a calendar
year or his Incentive Compensation for a Performance Period, as the case may
be, by filing a Deferral Election with the Committee in accordance with the
following rules: 

(a)               
Base Salary. The Deferral Election with respect to Base
Salary must be filed with the Committee by, and shall become irrevocable as of,
December 31 (or such earlier date as specified by the Committee on the Deferral
Election) of the calendar year next preceding the calendar year for which such
Base Salary would otherwise be earned.      

                                                                       6

(b)              
Incentive Compensation.  The Deferral Election with
respect to Incentive Compensation must be filed with the Committee by, and
shall become irrevocable as of, December 31 (or such earlier date as specified
by the Committee on the Deferral Election) of the calendar year next preceding
the first day of the Performance Period for which such Incentive Compensation
would otherwise be earned.  

(c)               
Performance-Based Compensation.  

(i)                 
Notwithstanding anything contained in this 3.2 to the contrary,
and only to the extent permitted by the Committee, the Deferral Election with
respect to Incentive Compensation that constitutes Performance-Based
Compensation must be filed with the Committee by, and shall become irrevocable
as of, the date that is 6 months before the end of the applicable Performance
Period (or such earlier date as specified by the Committee on the Deferral
Election), provided that in no event may such Deferral Election be made after
such Incentive Compensation has become "readily ascertainable" within
the meaning of Section 409A of the Code. 

(ii)               
In order to make a Deferral Election under this Section 3.2(c),
the Participant must perform services continuously from the later of the beginning
of the Performance Period or the date the performance criteria are established
through the date a Deferral Election becomes irrevocable under this Section
3.2(c).  

(iii)              
A Deferral Election made under this Section 3.2(c) shall not
apply to any portion of the Performance-Based Compensation that is actually
earned by a Participant regardless of satisfaction of the performance criteria.

(iv)             
To the extent permitted by the Committee, an Eligible Employee
described in Section 3.1(a) hereof shall be permitted to make a Deferral
Election with respect to Performance-Based Compensation in accordance with this
Section 3.2(c) provided that the Eligible Employee satisfies all of the other
requirements of this Section.    

(d)              
Deferral of Awards.  In the event that any Incentive
Compensation is provided as an Award, a Participant may elect to have all or
part of the Award cancelled and converted into an equal number of Stock
Deferral Units under the Plan and to have such Stock Deferral Units credited to
a Stock Deferral Sub-Account pursuant to Article IV.  The provisions of this
Article III shall apply to such elections, in addition to the following:

(i)                 
Each Stock Deferral Sub-Account shall be either a Stock Deferral
Retirement Sub-Account or a Stock Deferral In-Service Sub-Account, as elected
by the Participant, to be maintained and distributed in accordance with the
provisions of the Plan governing Retirement Sub-Accounts and In-Service
Sub-Accounts, respectively, except as otherwise provided herein (including
Section 4.2(c)(iv)).

(ii)               
The amount of dividends of other distributions to shareholders
that a Participant would have received had the Participant's Stock Deferral
Units been actual shares of common stock of the Company as of the date of the
dividend or other payment shall be credited to the Participant's Stock Deferral
Sub-Account with reference to which determined and immediately converted into
the appropriate number of Stock Deferral Units based upon the fair market value
of shares of common stock of the Company on such date.

                                                                       7

(e)               
Compensation Subject to Vesting.   With respect to
Incentive Compensation that is subject to a forfeiture condition requiring the
Participant's continued services for a period of at least twelve (12) months
from the date that the Participant obtains a "legally binding right"
to such compensation (within the meaning of Section 409A of the Code), the
Deferral Election must be filed with the Committee by, and shall become
irrevocable as of, the thirtieth (30th) day following the date that the
Participant obtains the legally binding right to such compensation, provided
that the election is made at least twelve (12) months in advance of the
earliest date at which the forfeiture condition could lapse.   For this
purpose, a condition will not be treated as failing to require the Participant
to continue to provide services for a period of at least 12 months merely
because the condition immediately lapses upon the death or disability (as
defined in Section 409A) of the Participant, or upon a Change in Control, provided
that if death, disability, or Change in Control occurs and the condition lapses
before the end of such 12-month period, the Deferral Election made under this
Section 3.2(e) shall not apply to such compensation.  To the extent permitted
by the Committee, an Eligible Employee described in Section 3.1(a) hereof shall
be permitted to make a Deferral Election in accordance with this Section
3.2(e).

3.3.           
Amount Deferred.  A Participant shall designate on the
Deferral Election the portion of his Base Salary, Incentive Compensation or
both that is to be deferred in accordance with this Article III.  Unless
otherwise determined by the Committee, a Participant may defer (in 1%
increments) up to 90% of his Base Salary and up to 100% of his Incentive
Compensation for any Plan Year; provided, however, that the Participant shall
not be permitted to defer less than 1% of his Base Salary or his Incentive
Compensation during any one calendar year or Performance Period, as the case
may be, and any attempted deferral of a lesser amount shall not be
effective.    

3.4.           
Duration and Cancellation of Deferral Elections.  

(a)               
Duration.  Once irrevocable, a Deferral Election shall
only be effective for the calendar year or Performance Period with respect to
which such election was timely filed with the Committee.  Notwithstanding the
preceding sentence, the Committee may provide, in its sole discretion, that any
Deferral Elections shall apply from calendar year to calendar year, or
Performance Period to Performance Period, until terminated or modified by a
Participant in accordance with the terms of Sections 3.2.  Except as provided
in Section 3.4(b) hereof, a Deferral Election, once irrevocable, cannot be
cancelled during a calendar year or Performance Period.

(b)              
Cancellation.  

(i)                 
The Committee may, in its sole discretion, cancel a Participant's
Deferral Election where such cancellation occurs by the later of the end of the
Participant's taxable year or the 15th day of the third month following the
date the Participant incurs a "disability."  For purposes of this
Section 3.4(b)(i), a disability refers to any medically determinable physical
or mental impairment resulting in the Participant's inability to perform the
duties of his or her position or any substantially similar position, where such
impairment can be expected to result in death or can be expected to last for a
continuous period of not less than six months. 

                                                                       8

(ii)               
The Committee may, in its sole discretion, cancel a Participant's
Deferral Election due to an Unforeseeable Emergency or a hardship distribution
pursuant to Treasury Regulation Section 1.401(k)-1(d)(3).

(iii)              
If a Participant's Deferral Election is cancelled with respect to
a particular calendar year or Performance Period in accordance with this
Section 3.4(b), he may make a new Deferral Election for a subsequent calendar
year or Performance Period, as the case may be, only in accordance with Section
3.2 hereof.   

ARTICLE
IV

SUB-ACCOUNTS; PAYMENT ELECTIONS

4.1.           
Sub-Accounts.  The Committee shall establish and
maintain separate Retirement Sub-Accounts (including a Stock Deferral
Retirement Sub-Account), and one or more In-Service Sub-Accounts (including
Stock Deferral In-Service Sub-Accounts) for each Participant.  The Committee,
in its sole discretion, shall specify the maximum number (including zero) of
permitted In-Service Sub-Accounts for each Participant.  Amounts credited to a
Retirement Sub-Account shall commence to be paid following the Participant's
Separation from Service as provided in Article VII.  Amounts credited to an
In-Service Sub-Account shall commence to be paid in a year specified by the
Participant as provided in Section 4.2 and Article VII below.  

4.2.           
Payment Elections.  A Participant shall file a Payment
Election in accordance with the following rules:

(a)               
Timing; Irrevocability.  

(i)                 
Payment Elections with respect to a deferral of Base Salary or
Incentive Compensation shall be filed with the Committee by, and shall become
irrevocable as of, the applicable election filing deadline of the related
Deferral Election as specified in Article III.  

(ii)               
Once irrevocable, a Payment Election may only be changed in
accordance with Section 7.1(c) hereof.  

(b)              
Allocation of Deferrals Among Sub-Accounts.  

(i)                 
The Payment Election with respect to a deferral of Base Salary or
Incentive Compensation shall contain the Participant's allocation of deferrals
of Base Salary and Incentive Compensation among a Retirement Sub-Account and,
to the extent permitted by the Committee from time to time, one or more
In-Service Sub-Accounts.  In the event that a Participant allocates deferrals of
Base Salary or Incentive Compensation to an In-Service Sub-Account, the
Participant must designate the year in which payments will  commence to be
paid, which year may not be earlier than two years after the date on which such
Payment Election becomes irrevocable.  Base Salary or Incentive Compensation
that a Participant elects to defer shall be treated as if it were set aside in
one or more Sub-Accounts on the date the Base Salary or Incentive Compensation
would otherwise have been paid to the Participant.  

                                                                       9

(ii)               
To the extent that a Participant does not designate the
Sub-Account to which deferrals of Base Salary or Incentive Compensation shall
be credited on a Payment Election as provided in this Section 4.2(b) (or such
designation does not comply with the terms of the Plan), such deferrals shall
be credited to the Participant's Retirement Sub-Account.

(c)               
Form of Payment for Sub-Accounts.  

(i)                 
A Participant may elect, on the first Payment Election that he
delivers to the Committee, to receive his Retirement Sub-Account in cash in a
single lump sum or in a number of approximately equal annual installments over
a specified period not exceeding four years.  The form of payment designated on
that first Payment Election will apply to all amounts credited to the Retirement
Sub-Account under the Plan (whether attributable to deferrals of Base Salary or
Incentive Compensation, or earnings on such amounts) unless changed in
accordance with the rules of Section 7.1(c).

(ii)               
A Participant may elect, on the first Payment Election that he
delivers to the Committee pursuant to which deferrals of Base Salary or
Incentive Compensation are credited to an In-Service Sub-Account, to receive
the In-Service Sub-Account in cash in a single lump sum or in a number of
approximately equal annual installments over a specified period not exceeding
four years.  The form of payment designated on that first Payment Election will
apply to all amounts credited to that In-Service Sub-Account under the Plan
(whether attributable to deferrals of Base Salary or Incentive Compensation, or
earnings on such amounts) unless changed in accordance with the rules of
Section 7.1(c).  A Participant may choose different forms of payment for each
separate In-Service Sub-Account in accordance with this Section 4.2(c).  

(iii)              
To the extent that a Participant does not designate the form of
payment of a Sub-Account on a Payment Election as provided in this Section
4.2(c) (or such designation does not comply with the terms of the Plan), such
Sub-Account shall be paid in cash in a single lump sum.   

(iv)             
Notwithstanding anything contained in the Plan to the contrary,
for purposes of distribution the Stock Deferral Units held in a Stock Deferral
Sub-Account shall be converted to whole shares of Company common stock and cash
for any fractional shares.  To the extent that delivery of any shares of
Company common stock to a Participant under this Plan otherwise would cause all
or any portion of the Plan to be considered an "equity compensation
plan" as such term is defined in Section 303A(8) of the New York Stock
Exchange Listed Company Manual or any successor rule ("Listed Company
Manual"), then such shares shall be paid from, and shall count against the
reserve of, a Company - sponsored "equity compensation plan" designated
by the Committee that complies with the shareholder approval requirements
contained in the Listed Company Manual. 

                                                                      10

ARTICLE
V

VESTING 

5.1.           
General.  Each Participant shall at all times have a
fully vested and nonforfeitable interest in the portion of his Account
attributable to voluntary deferrals of Base Salary and Incentive Compensation.

5.2.           
Awards.  Notwithstanding the provisions of Section
5.1, the portion of each Participant's Account, if any, attributable to
deferral of an Award shall be subject to such vesting schedule as was applicable
to the restricted shares for which Stock Deferral Units were credited as a
result of an election under the Plan.

ARTICLE
VI

CREDITING OF GAINS, LOSSES AND EARNINGS TO ACCOUNTS

6.1.           
General.

To the extent provided by the Committee in its sole
discretion, each Participant's Account will be credited with gains, losses and
earnings based on investment directions made by the Participant in accordance
with investment deferral crediting options and procedures established from time
to time by the Committee.  The Committee specifically retains the right in its
sole discretion to change the investment deferral crediting options and
procedures from time to time.  

By electing to defer any amount under the Plan (or by
receiving or accepting any benefit under the Plan), each Participant
acknowledges and agrees that the Affiliated Group is not and shall not be
required to make any investment in connection with the Plan, nor is it required
to follow the Participant's investment directions in any actual investment it
may make or acquire in connection with the Plan or in determining the amount of
any actual or contingent liability or obligation of the Company or any other
member of the Affiliated Group thereunder or relating thereto.  Any amounts
credited to a Participant's Account with respect to which a Participant does
not provide investment direction shall be credited with gains, losses and
earnings as if such amounts were invested in an investment option to be
selected by the Committee in its sole discretion.  

6.2.           
Stock Deferral Sub-Accounts.

Notwithstanding the provisions of Section 6.1, Share
Deferral Sub-Accounts shall be accounted for in the form of Stock Deferral
Units and Participants shall not provide investment directions with respect to
them.

                                                                      11

If there shall occur any merger, consolidation,
liquidation, issuance of rights or warrants to purchase securities,
recapitalization, reclassification, stock dividend, spin-off, split-off, stock
split, reverse stock split, or other distribution with respect to shares of the
Company, or any similar corporate transaction or event in respect to such
shares, then the Committee shall, in the manner and to the extent that it deems
appropriate and equitable to the Participant and consistent with the terms of
the Plan, cause a proportionate adjustment to be made in the number and kind of
shares deemed held under the Plan.  Moreover, in the event of any such
transaction or event, the Committee, in its discretion, may provide in
substitution for any or all outstanding shares under the Plan such alternative
compensation as it, in good faith, may determine to be equitable under the
circumstances. 

ARTICLE
VII

PAYMENTS

7.1.           
Date of Payment of Sub-Accounts.  Except as otherwise
provided in this Article VII, a Participant's Sub-Accounts shall commence to be
paid as follows:

(a)               
Retirement Sub-Account.  The
vested amounts credited to a Participant's Retirement Sub-Account shall
commence to be paid in the calendar year following the calendar year of the
Participant's Separation from Service, but in no event before the first business
day of the seventh month following the Participant's Separation from Service
(or if earlier, upon the Participant's death).  Such amounts shall be
paid in the form of payment selected by the Participant in accordance with
Section 4.2(c).  Subject to Section 7.2 hereof, the Committee has the
discretion to establish administrative procedures for designating the date
within the applicable calendar year upon which payments shall commence.  

(b)              
In-Service Sub-Account. 

(i)                 
In general, the vested amounts credited to a Participant's
In-Service Sub-Account shall commence to be paid in January of the year
specified by the Participant for such Sub-Account in accordance with Section
4.2(b) hereof.  Each In-Service Sub-Account shall be paid in the form of
payment selected by the Participant with respect to that In-Service Sub-Account
in accordance with Section 4.2(c).  

(ii)               
If a Participant's Separation from Service occurs after payment
of his In-Service Sub-Account has commenced, the remaining balance of such
In-Service Sub-Account will continue to be paid to him in accordance with the
payment schedule that has already commenced.  If, however, a Participant's
Separation from Service occurs prior to the commencement of one or more
In-Service Sub-Accounts, then amounts credited to such In-Service Sub-Accounts
shall immediately be transferred to the Participant's Retirement Sub-Account
and payment of the transferred amounts shall thereafter be governed by the
terms and conditions applicable to the Retirement Sub-Account, including, without
limitation, Section 7.2 hereof.   

(c)               
Subsequent Payment Elections.  A Participant may elect on
a form provided by the Committee to change the Payment Election with respect to
one or more of his Sub-Accounts (a "Subsequent Payment Election"). 
The Subsequent Payment Election shall become irrevocable upon receipt by the
Committee and shall be made in accordance with the following rules:  

                                                                      12

(i)                 
In General.  The Subsequent Payment Election may not take
effect until at least twelve (12) months after the date on which it is accepted
by the Committee. The Subsequent Payment Election most recently accepted by the
Committee and that satisfies the requirements of this Section 7.1(c) shall
govern the payout of the Sub-Accounts notwithstanding anything contained in Section
7.1(a) or (b) hereof to the contrary.

(ii)               
Retirement Sub-Account.  A Participant may make a one-time
election to change the form of payment of his Retirement Sub-Account to a form
otherwise permitted under the Plan.   Except in the event of the death or Unforeseeable
Emergency of the Participant, the payment of such Sub-Account will be delayed
until the fifth (5th) anniversary of the first day of the calendar year that
the Sub-Account would otherwise have been paid under the Plan if such
Subsequent Payment Election had not been made (or, in the case of installment
payments, which are treated as a single payment for purposes of this Section,
on the fifth (5th) anniversary of the first day of the calendar year that the
first installment payment was scheduled to be made).

(iii)              
In-Service Sub-Account.  A Participant may make one or
more elections to delay the payment date or change the form of payment of one
or more In-Service Sub-Account(s) to a time or form permitted under the Plan. 
Such Subsequent Payment Election must be filed with the Committee at least
twelve (12) months prior to the first day of the calendar year that the
Sub-Account would otherwise have been paid under the Plan (or, in the case of
installment payments, at least twelve (12) months from the first day of the
calendar year that the first installment payment was scheduled to be made).  On
such Subsequent Payment Election, the Participant must delay the payment date
for a period of at least five (5) years after the first day of the calendar
year that the Sub-Account would otherwise have been paid under the Plan (or, in
the case of installment payments, at least five (5) years from the first day of
the calendar year that the first installment payment was scheduled to be
made).  

(iv)             
Acceleration Prohibited.  The Committee shall disregard
any Subsequent Payment Election by a Participant to the extent such election
would result in an acceleration of the time or schedule of any payment or
amount scheduled to be paid under the Plan within the meaning of Section 409A
of the Code.

(d)              
Small Payments.  In the event that a Sub-Account is paid
in installments and the balance of the remaining amounts to be paid in
installments falls below $25,000 (either as of the date that the installments
payments commence to be paid or at the time any subsequent installment is to be
paid thereafter), then the remaining installments shall be paid to the
Participant in a single lump sum within 30 days.    

7.2.           
Mandatory Six-Month Delay.  Except as otherwise
provided in Sections 7.7(a), 7.7(b) and 7.7(c), in no event may payments from a
Retirement Sub-Account commence prior to the first business day of the seventh
month following the Participant's Separation from Service (or if earlier, upon
the Participant's death).

7.3.           
Death of Participant.  

                                                                      13

(a)               
Each Participant shall file a Beneficiary Designation Form with
the Committee at the time the Participant files an initial Deferral Election. 
A Participant's Beneficiary Designation Form may be changed at any time prior
to his death by the execution and delivery of a new Beneficiary Designation
Form. The Beneficiary Designation Form on file with the Committee that bears
the latest date at the time of the Participant's death shall govern.  If a
Participant fails to properly designate a Beneficiary in accordance with this
Section 7.3(a), then his Beneficiary shall be his estate.  

(b)              
In the event of the Participant's death, the remaining amount of
the Participant's vested Sub-Accounts shall be paid to the Beneficiary or
Beneficiaries designated on a Beneficiary Designation Form, in accordance with
the following rules: (i) if a Participant dies after payment of a Sub-Account
has commenced, the remaining balance of such Sub-Account will continue to be
paid to his Beneficiary or Beneficiaries in accordance with the payment
schedule that has already commenced; and (ii) if a Participant dies before
payments from a Sub-Account have commenced, such Sub-Account will be paid to
his Beneficiary or Beneficiaries in a single lump sum in the calendar year
following the calendar year of the Participant's death.  The Committee has the
discretion to establish administrative procedures for designating the date
within the applicable calendar year upon which the payment shall be made.

7.4.           
Disability of Participant.  In the event of the Participant's
Disability, the Participant's vested Sub-Accounts shall be paid to the
Participant, in accordance with the following rules:  (i) if the Participant
incurs a Disability after payment of a Sub-Account has commenced, the remaining
balance of such Sub-Account will continue to be paid to the Participant in
accordance with the payment schedule that has already commenced; and (ii) if a
Participant incurs a Disability before payments from a Sub-Account have
commended, such Sub-Account will be paid to the Participant in a single sum
within thirty (30) days following the determination by the Committee that the
Participant has incurred a Disability, or such later date as may be required
under Section 7.2 hereof.

7.5.           
Change in Control.  Notwithstanding any provision of
the Plan to the contrary, upon the occurrence of  a Change in Control, the
remaining amount of the Participant's vested Account shall be paid to the
Participant or his Beneficiary within thirty (30) days following the Change in
Control, or such later date as required by Section 7.2 hereof.  

7.6.           
Withdrawal Due to Unforeseeable Emergency.  A
Participant shall have the right to request, on a form provided by the
Committee, an accelerated payment of all or a portion of his Account in a lump
sum if he experiences an Unforeseeable Emergency.  The Committee shall have the
sole discretion to determine whether to grant such a request and the amount to
be paid pursuant to such request.  

                                                                      14

(a)               
Determination of Unforeseeable Emergency.  Whether a
Participant is faced with an unforeseeable emergency permitting a payment under
this Section 7.6 is to be determined based on the relevant facts and
circumstances of each case, but, in any case, a payment on account of an
Unforeseeable Emergency may not be made to the extent that such emergency is or
may be relieved through reimbursement or compensation from insurance or
otherwise, by liquidation of the Participant's assets, to the extent the
liquidation of such assets would not cause severe financial hardship, or by
cessation of deferrals under the Plan.  Payments because of an Unforeseeable
Emergency must be limited to the amount reasonably necessary to satisfy the
emergency need (which may include amounts necessary to pay any Federal, state,
local, or foreign income taxes or penalties reasonably anticipated to result
from the payment). Determinations of amounts reasonably necessary to satisfy
the emergency need must take into account any additional compensation that is
available if the Plan provides for cancellation of a Deferral Election upon a
payment due to an Unforeseeable Emergency.  However, the determination of
amounts reasonably necessary to satisfy the emergency need is not required to
take into account any additional compensation that due to the Unforeseeable
Emergency is available under another nonqualified deferred compensation plan
but has not actually been paid, or that is available due to the Unforeseeable
Emergency under another plan that would provide for deferred compensation
except due to the application of the effective date provisions of Section 409A
of the Code.  

(b)              
Payment of Account.  Payment shall be made within thirty
(30) days following the determination by the Committee that a withdrawal will
be permitted under this Section 7.6, or such later date as may be required
under Section 7.2 hereof.

7.7.           
Discretionary Acceleration of Payments.  To the extent permitted by Section 409A of the Code, the
Committee may, in its sole discretion, accelerate the time or schedule of a
payment under the Plan as provided in this Section.  The provisions of this
Section are intended to comply with the exception to accelerated payments under
Treasury Regulation Section 1.409A-3(j) and shall be interpreted and
administered accordingly.    

(a)               
Domestic Relations Orders.  The Committee may, in its sole
discretion, accelerate the time or schedule of a payment under the Plan to an
individual other than the Participant as may be necessary to fulfill a domestic
relations order (as defined in Section 414(p)(1)(B) of the Code).  

(b)              
Conflicts of Interest.  The Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan to the extent necessary for any Federal officer or employee in
the executive branch to comply with an ethics agreement with the Federal
government.  Additionally, the Committee may, in its sole discretion, provide
for the acceleration of the time or schedule of a payment under the Plan the to
the extent reasonably necessary to avoid the violation of an applicable
Federal, state, local, or foreign ethics law or conflicts of interest law
(including where such payment is reasonably necessary to permit the Participant
to participate in activities in the normal course of his or her position in
which the Participant would otherwise not be able to participate under an
applicable rule). 

(c)               
Employment Taxes.  The Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment
under the Plan to pay the Federal Insurance Contributions Act (FICA) tax imposed
under Sections 3101, 3121(a), and 3121(v)(2) of the Code, or the Railroad
Retirement Act (RRTA) tax imposed under Sections 3201, 3211, 3231(e)(1), and
3231(e)(8) of the Code, where applicable, on compensation deferred under the
Plan (the FICA or RRTA amount). Additionally, the Committee may, in its sole
discretion, provide for the acceleration of the time or schedule of a payment,
to pay the income tax at source on wages imposed under Section 3401 of the Code
or the corresponding withholding provisions of applicable state, local, or
foreign tax laws as a result of the payment of the FICA or RRTA amount, and to
pay the additional income tax at source on wages attributable to the pyramiding
Section 3401 of the Code wages and taxes. However, the total payment under this
acceleration provision must not exceed the aggregate of the FICA or RRTA
amount, and the income tax withholding related to such FICA or RRTA amount. 

                                                                      15

(d)              
Limited Cash-Outs.  Subject to Section 7.2 hereof, the
Committee may, in its sole discretion, require a mandatory lump sum payment of
amounts deferred under the Plan that do not exceed the applicable dollar amount
under Section 402(g)(1)(B) of the Code, provided that the payment results in
the termination and liquidation of the entirety of the Participant's interest
under the Plan, including all agreements, methods, programs, or other
arrangements with respect to which deferrals of compensation are treated as
having been deferred under a single nonqualified deferred compensation plan
under Section 409A of the Code.  

(e)               
Payment Upon Income Inclusion Under Section 409A.  Subject
to Section 7.2 hereof, the Committee may, in its sole discretion, provide for
the acceleration of the time or schedule of a payment under the Plan at any
time the Plan fails to meet the requirements of Section 409A of the Code. The
payment may not exceed the amount required to be included in income as a result
of the failure to comply with the requirements of Section 409A of the Code.

(f)                
Payment of state, local, or foreign taxes. Subject to
Section 7.2 hereof, the Committee may, in its sole discretion, provide for the
acceleration of the time or schedule of a payment under the Plan to reflect
payment of state, local, or foreign tax obligations arising from participation
in the Plan that apply to an amount deferred under the Plan before the amount
is paid or made available to the participant (the state, local, or foreign tax
amount). Such payment may not exceed the amount of such taxes due as a result
of participation in the Plan.  The payment may be made in the form of
withholding pursuant to provisions of applicable state, local, or foreign law
or by payment directly to the participant.  Additionally, the Committee may, in
its sole discretion, provide for the acceleration of the time or schedule of a
payment under the Plan to pay the income tax at source on wages imposed under
Section 3401 of the Code as a result of such payment and to pay the additional
income tax at source on wages imposed under Section 3401 of the Code
attributable to such additional wages and taxes. However, the total payment
under this acceleration provision must not exceed the aggregate of the state,
local, and foreign tax amount, and the income tax withholding related to such
state, local, and foreign tax amount.

(g)               
Certain Offsets.  Subject to Section 7.2 hereof, the
Committee may, in its sole discretion, provide for the acceleration of the time
or schedule of a payment under the Plan as satisfaction of a debt of the
Participant to the Company (or any entity which would be considered to be a
single employer with the Company under Section 414(b) or Section 414(c) of the
Code), where such debt is incurred in the ordinary course of the service
relationship between the Company (or any entity which would be considered to be
a single employer with the Company under Section 414(b) or Section 414(c) of
the Code) and the Participant, the entire amount of reduction in any of the
taxable years of the Company (or any entity which would be considered to be a
single employer with the Company under Section 414(b) or Section 414(c) of the
Code) does not exceed $5,000, and the reduction is made at the same time and in
the same amount as the debt otherwise would have been due and collected from
the Participant.  

                                                                      16

(h)               
Bona fide disputes as to a right to a payment.  Subject to
Section 7.2 hereof, the Committee may, in its sole discretion, provide for the
acceleration of the time or schedule of a payment under the Plan where such
payments occur as part of a settlement between the Participant and the Company
(or any entity which would be considered to be a single employer with the
Company under Section 414(b) or Section 414(c) of the Code) of an arm's length,
bona fide dispute as to the Participant's right to the deferred amount.

(i)                 
Plan Terminations and Liquidations.  Subject to Section
7.2 hereof, the Committee may, in its sole discretion, provide for the
acceleration of the time or schedule of a payment under the Plan as provided in
Section 9.2 hereof.

Except as otherwise specifically provided in this
Plan, including but not limited to Section 3.4(b), this Section 7.7 and Section
9.2 hereof, the Committee may not accelerate the time or schedule of any
payment or amount scheduled to be paid under the Plan within the meaning of
Section 409A of the Code.

7.8.           
Delay of Payments.  To the extent permitted
under Section 409A of the Code, the Committee may, in its sole discretion,
delay payment under any of the following circumstances, provided that the
Committee treats all payments to similarly situated Participants on a
reasonably consistent basis:  

(a)               
Payments subject to Section 162(m).  A payment may be
delayed to the extent that the Committee reasonably anticipates that if the
payment were made as scheduled, the Company's deduction with respect to such
payment would not be permitted due to the application of Section 162(m) of the
Code.  If a payment is delayed pursuant to this Section 7.8(a), then the
payment must be made either (i) during the Company's first taxable year in
which the Committee reasonably anticipates, or should reasonably anticipate,
that if the payment is made during such year, the deduction of such payment
will not be barred by application of Section 162(m) of the Code, or (ii) during
the period beginning with the first business day of the seventh month following
the Participant's Separation from Service (the "six month
anniversary") and ending on the later of (x) the last day of the taxable
year of the Company in which the six month anniversary occurs or (y) the 15th
day of the third month following the six month anniversary.  Where any
scheduled payment to a specific Participant in a Company's taxable year is
delayed in accordance with this paragraph, all scheduled payments to that
Participant that could be delayed in accordance with this paragraph must also
be delayed.  The Committee may not provide the Participant an election with
respect to the timing of the payment under this Section 7.8(a).  For purposes
of this Section 7.8(a), the term Company includes any entity which would be
considered to be a single employer with the Company under Section 414(b) or
Section 414(c) of the Code.

(b)              
Federal Securities Laws or Other Applicable Law.  A
Payment may be delayed where the Committee reasonably anticipates that the
making of the payment will violate federal securities laws or other applicable
law; provided that the delayed payment is made at the earliest date at which
the Committee reasonably anticipates that the making of the payment will not
cause such violation.  For purposes of the preceding sentence, the making of a
payment that would cause inclusion in gross income or the application of any
penalty provision or other provision of the Code is not treated as a violation
of applicable law.

(c)               
Other Events and Conditions.  A payment may be delayed
upon such other events and conditions as the Internal Revenue Service may
prescribe in generally applicable guidance published in the Internal Revenue
Bulletin.  

                                                                      17

7.9.           
Calculation of Installment Payments.  In the event
that a Sub-Account is paid in installments (i) the amount of each installment
shall equal the quotient obtained by dividing the Participant's vested
Sub-Account balance as of the end of the month immediately preceding the month
of such installment payment by the number of installment payments remaining to
be paid at the time of the calculation, and (ii) the amount of such Sub-Account
remaining unpaid shall continue to be credited with gains, losses and earnings
as provided in Article VI hereof.  By way of example, if the Participant elects
to receive payments of a Sub-Account in equal annual installments over a period
of four (4) years, the first payment shall equal 1/4 of the vested Sub-Account
balance, calculated as described in this Section 7.9.  The following year, the
payment shall be 1/3 of the vested Sub-Account balance, calculated as described
in this Section 7.9.

7.10.       
Actual Date of Payment.  To the extent
permitted by Section 409A of the Code, the Committee may delay payment in the
event that it is not administratively possible to make payment on the date (or
within the periods) specified in this Article VII, or the making of the payment
would jeopardize the ability of the Company (or any entity which would be
considered to be a single employer with the Company under Section 414(b) or
Section 414(c) of the Code) to continue as a going concern.  Notwithstanding
the foregoing, payment must be made no later than the latest possible date
permitted under Section 409A of the Code.  

7.11.       
Discharge of Obligations.  The payment to a
Participant or his Beneficiary of a his Sub-Account in a single lump sum or the
number of installments elected by the Participant pursuant to this Article VII
shall discharge all obligations of the Affiliated Group to such Participant or
Beneficiary under the Plan with respect to that Sub-Account.  

ARTICLE
VIII

ADMINISTRATION

8.1.           
General.  The Company, through the Committee, shall be
responsible for the general administration of the Plan and for carrying out the
provisions hereof.  The Committee shall have the full power, discretion and
authority to carry out the provisions of the Plan, including the authority to
(a) resolve all questions relating to eligibility for participation in the Plan
and the amount in the Account of any Participant and all questions pertaining
to claims for benefits and procedures for claim review, (b) resolve all other
questions arising under the Plan, including any factual questions and questions
of construction, and (c) take such further action as the Company shall deem
advisable in the administration of the Plan.  The actions taken and the
decisions made by the Committee hereunder shall be final, conclusive, and
binding on all persons, including the Company, its shareholders, the other
members of the Affiliated Group, employees, Participants, and their estates and
Beneficiaries. In accordance with the provisions of Section 503 of ERISA, the
Committee shall provide a procedure for handling claims of Participants or
their Beneficiaries under the Plan.  Such procedure shall be in accordance with
regulations issued by the Secretary of Labor and shall provide adequate written
notice within a reasonable period of time with respect to the denial of any
such claim as well as a reasonable opportunity for a full and fair review by
the Committee of any such denial.  

8.2.           
Compliance with Section 409A of the Code.  

                                                                      18

(a)               
It is intended that the Plan comply with the provisions of
Section 409A of the Code, so as to prevent the inclusion in gross income of any
amounts deferred hereunder in a taxable year that is prior to the taxable year
or years in which such amounts would otherwise actually be paid or made
available to Participants or Beneficiaries. This Plan shall be construed,
administered, and governed in a manner that effects such intent, and the
Committee shall not take any action that would be inconsistent with such
intent.

(b)              
Although the Committee shall use its best efforts to avoid the
imposition of taxation, interest and penalties under Section 409A of the Code,
the tax treatment of deferrals under this Plan is not warranted or guaranteed. 
Neither the Company, the other members of the Affiliated Group, the Board, nor
the Committee (nor its designee) shall be held liable for any taxes, interest,
penalties or other monetary amounts owed by any Participant, Beneficiary or
other taxpayer as a result of the Plan.  

(c)               
Any reference in this Plan to Section 409A of the Code will also
include any proposed, temporary or final regulations, or any other guidance,
promulgated with respect to such Section 409A by the U.S. Department of
Treasury or the Internal Revenue Service.  For purposes of the Plan, the phrase
"permitted by Section 409A of the Code," or words or phrases of
similar import, shall mean that the event or circumstance shall only be
permitted to the extent it would not cause an amount deferred or payable under
the Plan to be includible in the gross income of a Participant or Beneficiary
under Section 409A(a)(1) of the Code.

ARTICLE
IX

AMENDMENT AND TERMINATION

9.1.           
Amendment.  The Company reserves the right to amend,
terminate or freeze the Plan, in whole or in part, at any time by action of the
Board.  Moreover, the Committee may amend the Plan at any time in its sole
discretion to ensure that the Plan complies with the requirements of Section
409A of the Code or other applicable law; provided, however, that
such amendments, in the aggregate, may not materially increase the benefit
costs of the Plan to the Company.  In no event shall any such action by the
Board or Committee adversely affect any Participant or Beneficiary who has an
Account, or result in any change in the timing or manner of payment of the
amount of any Account (except as otherwise permitted under the Plan), without
the consent of the Participant or Beneficiary, unless the Board or the
Committee, as the case may be, determines in good faith that such action is
necessary to ensure compliance with Section 409A of the Code.  To the extent
permitted by Section 409A of the Code, the Committee may, in its sole
discretion, modify the rules applicable to Deferral Elections, Payment
Elections and Subsequent Payment Elections to the extent necessary to satisfy
the requirements of the Uniformed Service Employment and Reemployment Rights
Act of 1994, as amended, 38 U.S.C. 4301-4334.

9.2.           
Payments Upon Termination of Plan.  In the event that
the Plan is terminated, the amounts allocated to a Participant's Sub-Accounts
shall be paid to the Participant or his Beneficiary on the dates on which the
Participant or his Beneficiary would otherwise receive payments hereunder
without regard to the termination of the Plan.  Notwithstanding the preceding
sentence, and subject to Section 7.2 hereof:

                                                                      19

(a)               
Liquidation; Bankruptcy.  The Board shall have the
authority, in its sole discretion, to terminate the Plan and pay each
Participant's entire Account to the Participant or, if applicable, his
Beneficiary within twelve (12) months of a corporate dissolution taxed under
Section 331 of the Code or with the approval of a bankruptcy court pursuant to
11 U.S.C. 503(b)(1)(a), provided that the amounts are included in the
Participant's gross income in the latest of the following years (or, if
earlier, the taxable year in which the amount is actually or constructively
received):  (i) the calendar year in which the Plan termination and liquidation
occurs; (ii) the first calendar year in which the amount is no longer subject
to a substantial risk of forfeiture as defined under Section 409A of the Code;
or (iii) the first calendar year in which the payment is administratively
practicable.  

(b)              
Discretionary Terminations.  The Board shall have the
authority, in its sole discretion, to terminate the Plan and pay each
Participant's entire Account to the Participant or, if applicable, his
Beneficiary, provided that: (i) the termination and liquidation does not occur
proximate to a downturn in the financial health of the Company (or any entity
which would be considered to be a single employer with the Company under
Section 414(b) or Section 414(c) of the Code); (ii) The Company (or any entity
which would be considered to be a single employer with the Company under Section
414(b) or Section 414(c) of the Code) terminates and liquidates all agreements,
methods, programs, and other arrangements sponsored by the Company (or any
entity which would be considered to be a single employer with the Company under
Section 414(b) or Section 414(c) of the Code) that would be aggregated with any
terminated and liquidated agreements, methods, programs, and other arrangements
under Section 409A of the Code if the same Participant had deferrals of
compensation under all of the agreements, methods, programs, and other
arrangements that are terminated and liquidated; (iii) no payments in
liquidation of the Plan are made within 12 months of the date the Board takes
all necessary action to irrevocably terminate and liquidate the Plan other than
payments that would be payable under the terms of the Plan if the action to
terminate and liquidate the Plan had not occurred; (iv) all payments are made
within 24 months of the date the Board takes all necessary action to
irrevocably terminate and liquidate the Plan; and (v) the Company (or any
entity which would be considered to be a single employer with the Company under
Section 414(b) or Section 414(c) of the Code) does not adopt a new plan that
would be aggregated with any terminated and liquidated plan under Section 409A
of the Code if the same Participant participated in both plans, at any time
within three years following the date the Board takes all necessary action to
irrevocably terminate and liquidate the Plan. 

(c)               
Other Events.  The Board shall have the authority, in its
sole discretion, to terminate the Plan and pay each Participant's entire
Account to the Participant or, if applicable, his Beneficiary upon such other
events and conditions as the Internal Revenue Service may prescribe in generally
applicable guidance published in the Internal Revenue Bulletin.

ARTICLE
X

MISCELLANEOUS

                                                                      20

10.1.       
Nonalienation of Deferred Compensation.  Except as
permitted by the Plan, no right or interest under the Plan of any Participant
or Beneficiary shall, without the written consent of the Company, be (i)
assignable or transferable in any manner, (ii) subject to alienation,
anticipation, sale, pledge, encumbrance, attachment, garnishment or other legal
process or (iii) in any manner liable for or subject to the debts or liabilities
of the Participant or Beneficiary.  Notwithstanding the foregoing, to the
extent permitted by Section 409A of the Code and subject to Section 7.7(a)
hereof, the Committee shall honor a judgment, order or decree from a state
domestic relations court which requires the payment of part or all of a
Participant's or Beneficiary's interest under this Plan to an "alternate
payee" as defined in Section 414(p) of the Code. 

10.2.       
Participation by Employees of Affiliates.  Any member
of the Affiliated Group may, by action of its board of directors or equivalent
governing body and with the consent of the Company's Board of Directors, adopt
the Plan; provided that the Company's Board of Directors may waive the
requirement that such board of directors or equivalent governing body effect
such adoption.  By its adoption of or participation in the Plan, the adopting
member of the Affiliated Group shall be deemed to appoint the Company its
exclusive agent to exercise on its behalf all of the power and authority
conferred by the Plan upon the Company and accept the delegation to the
Committee of all the power and authority conferred upon it by the Plan. The
authority of the Company to act as such agent shall continue until the Plan is
terminated as to the participating affiliate.  An Eligible Employee who is
employed by a member of the Affiliated Group and who elects to participate in
the Plan shall participate on the same basis as an Eligible Employee of the
Company.  The Account of a Participant employed by a participating member of
the Affiliated Group shall be paid in accordance with the Plan solely by such
member to the extent attributable to Base Salary or Incentive Compensation that
would have been paid by such participating member in the absence of deferral
pursuant to the Plan, unless the Board otherwise determines that the Company
shall be the obligor.

10.3.       
Interest of Participant.

(a)               
The obligation of the Company and any other participating member
of the Affiliated Group under the Plan to make payment of amounts reflected in
an Account merely constitutes the unsecured promise of the Company (or, if
applicable, the participating members of the Affiliated Group) to make payments
from their general assets and no Participant or Beneficiary shall have any
interest in, or a lien or prior claim upon, any property of the Affiliated
Group.  Nothing in the Plan shall be construed as guaranteeing future
employment to Eligible Employees.  It is the intention of the Affiliated Group
that the Plan be unfunded for tax purposes and for purposes of Title I of
ERISA.  The Company may create a trust to hold funds to be used in payment of
its and the Affiliated Group's obligations under the Plan, and may fund such
trust; provided, however, that any funds contained therein shall remain liable
for the claims of the general creditors of the Company and the other
participating members of the Affiliated Group. 

                                                                      21

(b)              
In the event that, in the sole discretion of the Committee, the
Company and/or the other members of the Affiliated Group purchases an insurance
policy or policies insuring the life of any Participant (or any other property)
to allow the Company and/or the other members of the Affiliated Group to
recover the cost of providing the benefits, in whole or in part, hereunder,
neither the Participants nor their Beneficiaries or other distributees shall
have nor acquire any rights whatsoever therein or in the proceeds therefrom. 
The Company and/or the other members of the Affiliated Group shall be the sole
owner and beneficiary of any such policy or policies and, as such, shall
possess and may exercise all incidents of ownership therein.  A Participant's
participation in the underwriting or other steps necessary to acquire such
policy or policies may be required by the Company and, if required, shall not
be a suggestion of any beneficial interest in such policy or policies to such
Participant or any other person. 

10.4.       
Claims of Other Persons.  The provisions of the Plan
shall in no event be construed as giving any other person, firm or corporation
any legal or equitable right as against the Affiliated Group or the officers,
employees or directors of the Affiliated Group, except any such rights as are
specifically provided for in the Plan or are hereafter created in accordance
with the terms and provisions of the Plan. 

10.5.       
Severability.  The invalidity and unenforceability of
any particular provision of the Plan shall not affect any other provision
hereof, and the Plan shall be construed in all respects as if such invalid or
unenforceable provision were omitted.   

10.6.       
Governing Law.  Except to the extent preempted by
federal law, the provisions of the Plan shall be governed and construed in
accordance with the laws of the State of Delaware.

10.7.       
Relationship to Other Plans.  The Plan is intended to
serve the purposes of and to be consistent with any incentive compensation plan
approved by the Committee for purposes of the Plan. 

10.8.       
Successors.  The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business and/or assets of the
Company expressly to assume this Plan.  This Plan shall be binding upon and
inure to the benefit of the Company and any successor of or to the Company,
including without limitation any persons acquiring directly or indirectly all
or substantially all of the business and/or assets of the Company whether by
sale, merger, consolidation, reorganization or otherwise (and such successor
shall thereafter be deemed the "Company" for the purposes of this Plan),
and the heirs, beneficiaries, executors and administrators of each
Participant.  

10.9.       
Withholding of Taxes.  Subject to Section 7.7 hereof,
to the extent required by the law in effect at the time payments are made, the
Affiliated Group may withhold or cause to be withheld from any amounts deferred
or payable under the Plan all federal, state, local and other taxes as shall be
legally required.  The Affiliated Group shall have the right in its sole
discretion to (i) require a Participant to pay or provide for payment of the
amount of any taxes that the Affiliated Group may be required to withhold with
respect to amounts that the Company credits to a Participant's Account or (ii)
deduct from any amount of salary, bonus, incentive compensation or other payment
otherwise payable in cash to the Participant the amount of any taxes that the
Company may be required to withhold with respect to amounts that the Company
credits to a Participant's Account.

10.10.    Electronic
or Other Media.  Notwithstanding any other provision of the Plan to the
contrary, including any provision that requires the use of a written
instrument, the Committee may establish procedures for the use of electronic or
other media in communications and transactions between the Plan or the
Committee and Participants and Beneficiaries.  Electronic or other media may
include, but are not limited to, e-mail, the Internet, intranet systems and
automated telephonic response systems.   

                                                                      22

10.11.    Headings;
Interpretation.  Headings in this Plan are inserted for convenience of
reference only and are not to be considered in the construction of the
provisions hereof.  Unless the context clearly requires otherwise, the
masculine pronoun wherever used herein shall be construed to include the
feminine pronoun.  

10.12.    Participants
Deemed to Accept Plan.  By accepting any benefit under the Plan, each
Participant and each person claiming under or through any such Participant
shall be conclusively deemed to have indicated his acceptance and ratification
of, and consent to, all of the terms and conditions of the Plan and any action
taken under the Plan by the Board, the Committee or the Company or the other
members of the Affiliated Group, in any case in accordance with the terms and
conditions of the Plan.

*       *        *

                        EXECUTED this               day of
June, 2007.

                                                            ASSOCIATED
ESTATES REALTY CORPORATION

                                                            By:        
/s/Kara Florack

                                                            Title:     
Vice President of Human Resources

                                                                      23

SECTION 409A DEFINITION 

OF A CHANGE IN CONTROL EVENT

A deferred compensation
plan subject to Section 409A may permit a payment of benefits upon a
"Change in Control Event."  There are generally three types of events
that may constitute a Change in Control Event for purposes of the Section 409A
rules: (i) a change in the ownership of a corporation; (ii) a change in the
effective control of a corporation; and (iii) a change in the ownership of a
substantial portion of the assets of a corporation.

The definition of a
Change in Control Event will apply to the payment of amounts deferred (and
related earnings) on or after January 1, 2005.  Amounts deferred prior to
January 1, 2005 (and related earnings) will continue to be subject to the
existing change in control definition (unless the plan is materially
modified).  The existing change in control definition can also continue to
apply to determine vesting (as opposed to distributions) and to trigger the
funding of a rabbi trust.   

	
   TYPE OF EVENT

   	
   DEFINITION

   	
   COMMENT

   
	
  A change in the
  ownership of a corporation

  	
  A person (or group)
  acquires stock that, together with stock already owned by such person or
  group, constitutes more than 50 percent of the total fair market
  value or total voting power of the stock of the
  corporation.  

  	
  If a person (or group)
  already owns more than 50 percent of the stock, the acquisition of additional
  stock will not trigger a Change in Control Event.  

  A Change in Ownership
  Event occurs only if there is a transfer or issuance of stock and the stock
  remains outstanding after the transaction.  

  
	
  A change in effective
  control of a corporation 

  	
  •  
  A person (or group) acquires,
  during a 12-month period, stock possessing 30 percent or more of the
  total voting power; or 

  •  
  A majority of the members
  of the board of directors is replaced during any 12-month period by directors
  whose appointment or election is not endorsed by a majority of the
  corporation's board of directors prior to the date of the appointment or
  election.  

  

  

  	
  If a person (or group)
  already owns at least 30 percent of the voting power, the acquisition of
  additional voting power does not trigger a Change in Control Event
  (but the acquisition of additional value might trigger the 50 percent
  prong above).  

  The change in board
  membership prong triggers only with respect to a corporation for which no
  other corporation is a majority shareholder (i.e., the parent
  corporation).

  
	
  A change in the
  ownership of a substantial portion of the assets of a corporation

  	
  A person (or group)
  acquires, during a 12-month period, assets that have a total gross fair
  market value (i.e., without regard to liabilities) of 40 percent
  or more of the total gross fair market value of all of the assets of
  the corporation immediately prior to such acquisition. 

  	
  An exception applies
  if the transfer is to an entity that is controlled by the shareholders of the
  transferring corporation, such as:   

  •     
  a shareholder of the
  transferring corporation (immediately before the transfer) in exchange for or
  with respect to the receiving corporation's stock;

  •     
  an entity in which the
  transferring corporation owns 50 percent or more of the total value or
  voting power;

  •     
  a person (or group) that owns
  directly or indirectly 50 percent or more of the total value OR voting power
  of all of the outstanding stock of the transferring corporation; or 

  •     
  an entity in which at least 50
  percent of the total value or  voting power is owned
  directly or indirectly by a person that owns directly or indirectly 50
  percent or more of the total value or voting power of
  all of the outstanding stock of the transferring corporation. 

  
	
  Miscellaneous

  	
  The occurrence of the
  event must be objectively determinable and any requirement that any other
  person or group, such as a plan administrator or compensation committee,
  certify the occurrence of a change in control event must be strictly 
  ministerial and not involve any discretionary authority.

  Certain attribution
  rules apply for purposes of determining stock ownership.   

  	

  

                                                                      25

WHEN DOES A
SEPARATION FROM SERVICE

 OCCUR UNDER SECTION 409A?

Payments may commence upon a termination of employment
under arrangements affected by Section 409A of the tax code only if the
termination constitutes a "separation from service."   This
memorandum provides a summary of the definition of "separation from
service" and identifies design decisions that the company must make in
2007 concerning the application of the definition.   

General definition of "separation from
service"

A separation from service occurs when the employee
dies, retires, or otherwise has a termination of employment.  The employee must
terminate employment with the employer and all members of the employer's
"controlled group" (generally based on a 50% ownership level), which
includes foreign and noncorporate entities.     

 Issues with reduced
schedules or consulting arrangements 

In some cases it is not clear whether a separation from
service has occurred.  For example, what if an employee is permitted to remain
on the payroll for a period of time to "bridge the gap" to
retirement, but no further meaningful services are required?  Or what if an
employee purportedly terminates employment but continues to provide significant
services as a consultant?  

In these cases, a separation from service will occur
only if the parties "reasonably anticipate" that the level of
services will permanently decrease to 20% or less of the average level of
services during the previous 36 months (or if shorter, the actual period of
service).  In this regard, there are a few presumptions that apply:

.     
A separation from service is presumed if the level of services
falls to 20% or less

.     
A separation from service is presumed not to have occurred
if the level of services continues at a level of 50% or more  

.     
These presumptions can be rebutted based on the facts and
circumstances  

The final regulations confirm that a separation from
service cannot be defined by reference to when an employee leaves the payroll. 

Bona fide leave of
absence  

The employment relationship is deemed to continue while
the employee is on military leave, sick leave, or other bona fide leave of
absence (provided there is a reasonable expectation that the employee will
return) if: 

.     
The leave does not exceed six months

.     
The leave extends beyond six months, but the employee retains a
right to reemployment under an applicable statute (e.g., Family Medical
Leave Act; USERRA) or by contract.  

.     
The leave does not extend beyond 29 months in the case of a
certain disabilities

The final regulations confirm that "terminal
leave" programs will not delay a separation from service.   

Re-Employment

If an employee
terminates employment but is later re-employed by the same controlled group,
then the parties will need to carefully review the facts and circumstances to
determine whether a true separation from service has occurred.  The
presumptions outlined above will apply to this situation.

If the facts and circumstances indicate that, at the
time of termination, the parties reasonably anticipated that no future services
would be provided, then it is likely that the original separation from service
will be respected.  On the other hand, if the facts and circumstances indicate
that the parties anticipated that the individual would be re-employed after a
short period of time, then the separation from service might not be respected. 

If the original termination of employment is respected,
any payments of deferred compensation that commenced upon the original
separation from service cannot be suspended upon the subsequent re-employment. 

Employee-Directors

Special rules apply when an individual serves as both
an employee and as a member of the board of directors.  Where an individual
terminates employment but continues as a director, the termination will
constitute a separation from service only under the employee deferral plans,
but not any separate director plans (and vice versa).

Asset Sales

Under a modified "same desk" rule, the
parties to an asset purchase agreement may specify in writing, prior to
closing, whether the employees of the selling company who continue with the
purchaser have experienced a separation from service under the various deferred
compensation plans of the seller.  The parties must treat all affected
employees consistently (i.e., they cannot pick and choose).  

The benefits under the seller's deferred compensation plans
generally will be payable when the employees separate from service with the
buyer.  Therefore, the parties should establish a procedure for notifying the
seller if and when the transferred employees later separate from service.  A
similar rule applies in the context of spin-off transactions.        27

A GUIDE TO
TRACKING 

SPECIFIED EMPLOYEES UNDER SECTION 409A

Section 409A of the tax code imposes a mandatory
6-month delay on payments of deferred compensation to "specified
employees" of a public company following separation from service. 
Therefore, as part of its Section 409A Compliance Program, the company will
need to establish a method to identify and track its specified employees.  This
memorandum provides a general overview of the design decisions related to
establishing this tracking system.  

GENERAL OVERVIEW

A "specified employee" of a public company
generally means an individual who is either:

.     
Top Officer:  An "officer" having annual
"compensation" greater than a specified amount ($145,000 in 2007),
not to exceed the top 50 paid officers (or, if fewer, the greater of 3 or 10%
of the employees).

.     
5-Percent Owner:  A 5-percent owner of the public company.

.    
1-Percent Owner:  A 1-percent owner of the public company
having annual "compensation" of more than $150,000. 

REGULATORY
METHOD

OR ALTERNATIVE METHOD

The company may identify its specified employees using
the approach outlined in the regulations (i.e., the "regulatory
method") or by reference to a customized "alternative method."  

 [x]        Default - Regulatory Method. 
Follow the approach outlined in the regulations. 

.     
Pros.  The approach is specifically sanctioned by the
final regulations and results in the minimum number of employees being subject
to the 6-month delay.

.     
Cons.  The approach does not leave room for error.  For
example, an error in calculating compensation could result in an
under-inclusive list.      

□          Alternative
Method.  In lieu of following the regulatory method for identifying
specified employees, the Company could create an "alternative
method," for example based on payroll code or salary grade.  The
alternative method must be an objectively determinable standard that is
designed to include all specified employees (determined based on all of the
"default" rules set forth below).  The alternative method must result
in either all service providers or no more than 200 service providers being
identified in the class as of any date.  If this box is checked, please
describe the method:  _______________________________________.

.     
Pros.  The approach is flexible and could reduce the
administrative burden of tracking specified employees. 

.     
Cons.  The approach generally will result in an
over-inclusive list of individuals subject to the 6-month delay.  Moreover, it
might be difficult to establish a method that will always include: (i)
no more than 200 employees and directors; (ii) the top 50 officers; and
(iii) the 5-percent and 1-percent owners.     

REGULATORY
METHOD FOR 

IDENTIFYING SPECIFIED EMPLOYEES

If the company decides to use the regulatory method to
identify specified employees, then it will need to take the following steps to
establish its tracking system.

Step One:  Identify the pool of "officers"

No more than 50 employees (or, if fewer, the greater of
3 or 10% of the employees) will be treated as "officers."  

.     
For this purpose, all members of the affiliated group are treated
as one employer (using the 80% ownership test under Section 414(b) and 414(c)
of the tax code).  Therefore, an affiliated group with 500 or more employees
will have a maximum of 50 officers.  

.     
If more employees qualify as officers than permitted under these
limits, then those qualifying individuals receiving the highest one-year
compensation while officers are considered the company's officers.  

.     
An employee who is an officer must be counted as an officer for
this purpose even if he or she also is a specified employee under the 5-percent
owner or 1-percent owner tests.    

.     
A non-employee director will not be considered an officer
for this purpose.

Unfortunately, the final regulations under Section 409A
do not provide guidance on how to identify the "officers" of a
company.   Instead, the determination is based on guidance under Section 416 of
the tax code.  

.     
Whether an individual is an "officer" is determined
based of all the facts, including, for example, the source of his authority,
the term for which elected or appointed, and the nature and extent of his
duties. 

.     
An employee who merely has the title of an officer but not the
authority of an officer is not considered an officer for purposes of this
test.  Similarly, an employee who does not have the title of an officer but has
the authority of an officer is an officer for purposes of this test.  

.     
An individual may be considered an "officer" under
Section 409A even though he is not a board-appointed officer.  For example, in
some cases non-board-appointed officers have certain authority to bind the
company (e.g., authority over budgets, etc.).  Depending on the
specific  facts and circumstances, there is a risk that these employees could
be considered "officers" for purposes of Section 409A.  

                                                                      29

.     
Based on the above, a conservative approach is to include all
board-appointed officers, plus the most highly compensated other employees, up
to a total of 50 individuals.  

Conclusion: 
Method to identify "officers." preceding method

Step Two:  Identify
the 5-percent and 1-percent owners

An individual is a
5-percent owner if he owns more than 5 percent of (i) the outstanding
stock or (ii) the total voting power of all stock.   An individual is a
1-percent owner if he owns more than 1 percent of (i) the outstanding
stock or (ii) the total voting power of all stock, and his annual
compensation exceeds $150,000.  

.     
Unlike the "top officer prong", these two prongs can
apply to non-employee directors and consultants.  

.     
For purposes of applying this test, the general stock attribution
rules of Section 318 of the tax code apply, with certain modifications.

Conclusion:  

Step Three:  Select the appropriate definition of
compensation

The application of each of the "top officer"
prong and the "1-percent owner" prong of the specified employee
definition depends on the individual's "compensation."   For example:

.     
For purposes of the "top officer" prong, the officer's
"compensation" must exceed $145,000 for 2007; if there are more than
50 officers, then those individuals receiving the highest one-year
"compensation" while officers are included on this list.  

.     
 An individual who owns more than 1 percent of the vote or value
of outstanding stock only if his or her annual "compensation" exceeds
$150,000.    

For these purposes, the company may use any available
definition of "compensation" under Section 415 of the tax code,
including any available safe harbor, timing or other special rules.  The
definition must be used consistently and cannot be changed retroactively. 
Although the definition is not required to match the one used in the company's
qualified plans, it might make sense from an administrative standpoint to have
consistent definitions.  The company, however, may have business reasons to
deviate from the definition of compensation included in its qualified plan.  

□          Same
as Qualified Plan.  The ____________________ plan.

[x]         Customize the Definition.

            Definition
of Compensation

                                                                      30

[x]         Default Definition. 
Generally includes all compensation paid for personal services that is included
in gross income, including salary, commissions, bonuses and fringe benefits,
plus elective deferrals to a 401(k) plan and elective benefits under a
cafeteria plan or qualified transportation fringe benefit plan.  The definition
also includes certain "special items", such as amounts resulting from
a Section 83(b) election, amounts that are includible under the rules of
section 409A, and certain taxable reimbursements.  The definition does not
include elective deferrals under a nonqualified deferred compensation plan,
distributions from a qualified or nonqualified plan (unless otherwise provided
by the employee), amounts realized from the exercise of a non-statutory option
or the vesting of restricted shares, amounts realized from the sale of shares
acquired under an incentive stock option, or other similar items. 

□          Simplified
compensation. Same as above, but does not include the "special
items", such as income attributable to a Section 83(b) election, Section
409A or taxable reimbursements.

□          Section
3401(a) wages.   Includes amounts in Box 1 on the Form W-2, plus elective
deferrals to a 401(k) plan and elective benefits under a cafeteria plan or
qualified transportation fringe benefit plan.  Unlike the default or simplified
definitions, this definition does include income recognized upon
exercise of stock options or the vesting of restricted shares.  The definition
also does not add back elective deferrals under a nonqualified deferred
compensation plan.  

Other Special Rules

□          Nonresident
Aliens.  Include compensation paid to nonresident aliens even if the amount
is excluded from gross income.

□          Use
of Special Timing Rules.  Describe _____________________________.  

Step Four:  Select the specified employee
identification date

An employee is a specified employee if he satisfies the
definition at any time during the 12-month period ending on the
specified employee "identification date".  The company has
flexibility in selecting the "identification date" (although any
subsequent change will not be effective for at least 12 months):  

[x]         Default Date.  Unless
another date is designated, the specified employee identification date is
December 31.  In other words, if the individual is a specified employee at
any time during the period commencing January 1 and ending December 31 of a
calendar year, then he or she is a specified employee on the identification
date. 

                                                                      31

□          Other
Date.  The company may designate any other date as the specified employee
identification date, provided that it uses the same identification date with
respect to all nonqualified deferred compensation plans. If this box is
checked, please insert the date ______________.

Step Five:  Select the specified employee effective
date

If an individual is a specified employee as of an
"identification date", then he or she is treated as a specified employee
for the entire 12-month period beginning on the specified employee
"effective date."  The company has flexibility in selecting the
"effective date" (although any subsequent change will not be
effective for at least 12 months): 

[x]         Default Date.  Unless
another date is designated, the specified employee effective date is the first
day of the fourth month following the specified employee identification date (e.g.,
April 1 for a December 31 identification date).     

□          Other
Date.  The company may designate any earlier date as the specified employee
effective date.   If this box is checked, please insert the date ______________
(not later than the first day of the fourth month following the specified
employee identification date). 

TIMING RULES

The elections described above (including the election
to use the alternative method) are subject to the following rules:

.     
The elections must be effective for all nonqualified deferred
compensation plans and must apply consistently to all employees.  

.     
The elections must be in place no later than December 31, 2007.  

.     
The elections are effective when the company has taken all
necessary corporate action to make the elections binding for purposes of all
nonqualified deferred compensation plans.

As a practical matter, the company might want to retain the
discretion in the deferred compensation plans to make the elections (rather
than stating the elections in the plan document).  The company could then
establish or change the elections in a resolution that applies to all
nonqualified deferred compensation arrangements.                    32

[1] Please refer to the
attached change in control memorandum for a summary of these terms. 

[2] 
Please refer to the attached memorandum for a summary of the separation from
service definition.    

[3]
Please refer to the attached memorandum regarding specified employees for more
information.

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