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FIRST AMENDMENT TO CREDIT AGREEMENT

Loan Agreement

FIRST AMENDMENT TO CREDIT AGREEMENT | Document Parties: AERC ARROWHEAD STATION, INC | AERC BAY CLUB, INC | AERC BEDFORD COMMONS, INC | AERC BENNELL, INC | AERC COUNTRY PLACE, LLC | AERC Country, Inc | AERC COURTNEY CHASE, LLC | AERC LAKE FOREST, INC | AERC Landings, Inc | AERC MORGAN PLACE, INC | AERC Shiloh Member, Inc | AERC STEEPLECHASE, LLC | AERC WESTCHESTER, INC | AERC WILLIAMSBURG, INC | AERC, INC | AERC-REMINGTON PLACE, INC | ALTA LAGO, LLC | Associated Estates Realty Corporation | BUCKHEAD AERC, LLC | HUNTINGTON NATIONAL BANK | Investment Real Estate | National City Bank | PRESERVE, LLC | RAYMOND JAMES BANK | US BANK NATIONAL ASSOCIATION | WELLS FARGO BANK, NA You are currently viewing:
This Loan Agreement involves

AERC ARROWHEAD STATION, INC | AERC BAY CLUB, INC | AERC BEDFORD COMMONS, INC | AERC BENNELL, INC | AERC COUNTRY PLACE, LLC | AERC Country, Inc | AERC COURTNEY CHASE, LLC | AERC LAKE FOREST, INC | AERC Landings, Inc | AERC MORGAN PLACE, INC | AERC Shiloh Member, Inc | AERC STEEPLECHASE, LLC | AERC WESTCHESTER, INC | AERC WILLIAMSBURG, INC | AERC, INC | AERC-REMINGTON PLACE, INC | ALTA LAGO, LLC | Associated Estates Realty Corporation | BUCKHEAD AERC, LLC | HUNTINGTON NATIONAL BANK | Investment Real Estate | National City Bank | PRESERVE, LLC | RAYMOND JAMES BANK | US BANK NATIONAL ASSOCIATION | WELLS FARGO BANK, NA

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Title: FIRST AMENDMENT TO CREDIT AGREEMENT
Date: 5/6/2008
Industry: Real Estate Operations     Law Firm: Greenberg Traurig     Sector: Services

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FIRST AMENDMENT TO

CREDIT AGREEMENT

            This First Amendment to Credit Agreement (the “ Amendment ”), dated as of March 20, 2008 (the “ Effective Date ”), is by and among Associated Estates Realty Corporation (the “ Borrower ”), National City Bank and the other banks and financial institutions whose signatures appear below (collectively, the “ Lenders ”) and National City Bank, not individually but as administrative agent for the Lenders (the “ Administrative Agent ”).

RECITALS

 A.                 Borrower, Administrative Agent, and certain of the Lenders are parties to that certain Credit Agreement dated as of April 24, 2007 (the “ Credit Agreement ”), pursuant to which such Lenders made available to Borrower an unsecured revolving credit facility with an Aggregate Commitment of $100,000,000.  All capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement.

B.                 Borrower and the Lenders wish to amend the Credit Agreement to increase the Aggregate Commitment to $150,000,000 by adding new Lenders and increasing the Commitments of certain of the existing Lenders, to extend the Facility Termination Date thereunder and to modify certain other terms, covenants, and provisions in the Credit Agreement, all as set forth herein.

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

AGREEMENTS

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

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



3.                  New and Increased Commitments . From and after the Effective Date (i) US Bank, National Association shall be considered a “Lender” under the Credit Agreement and the Loan Documents and each shall have a Commitment in the amount shown next to its signature on the signature pages of this Amendment, and (ii) National City Bank, Wells Fargo Bank, N.A., Raymond James Bank, FSB, and The Huntington National Bank shall each be deemed to have increased its Commitment to the increased amount shown next to its signature on the signature pages of this Amendment.  For purposes of Section 14.1 of the Credit Agreement (Notices), the address(es) and facsimile number(s) for each such new Lender shall be as specified below its signature on the signature pages of this Amendment. The Borrower shall, on or before the Effective Date, execute and deliver to the Administrative Agent on behalf of each such new Lender a Note to evidence the Loans to be made by such Lender.

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

a.                   The definition of  “Aggregate Commitment” is deleted in its entirety and shall be replaced by the following:

                                               “Aggregate Commitment” means, as of any date, the aggregate of the then-current Commitments of all the Lenders, which is, as of the Effective Date of the First Amendment to this Agreement, $150,000,000.

b.                  The definition of  “Capitalization Rate” shall be amended by modifying clause (i) thereof to read “seven and one quarter percent (7.25%).”

c.                   The definition of “Facility Termination Date” is deleted in its entirety and shall be replaced by the following:

                        “Facility Termination Date” shall mean March 20, 2011, which shall be the third (3rd ) anniversary of the Effective Date of the First Amendment to this Agreement, or if such day is not a Business Day the last Business Day immediately preceding such day.

d.                    The definition of “Total Asset Value” is deleted in its entirety and shall be replaced with the following:




     “Total Asset Value” means, as of any date, (i) the Net Operating Income for the most recent four (4) consecutive fiscal quarters of the Borrower for which financial results have been reported attributable to Projects then owned or leased by Borrower or any other member of the Consolidated Group (excluding 100% of the Net Operating Income attributable to any such Projects which have not been owned or leased by any combination of Borrower, other members of the Consolidated Group or Investment Affiliates for at least eight (8) full fiscal quarters as of the end of the most recent fiscal quarter for which financial results have been reported, other than Net Operating Income from Overlimit Projects (as defined below) then owned or leased by Borrower or any other member of the Consolidated Group which Net Operating Income will be included in this clause (i)) divided by the Capitalization Rate, plus (ii) 100% of cost for any such Projects first acquired or leased during such eight (8) fiscal quarter period (including the amount of any assumed Indebtedness secured thereby) which are not Overlimit Projects, plus (iii) the Consolidated Group Pro Rata Share of Net Operating Income for the most recent four (4) consecutive fiscal quarters of the Borrower for which financial results have been reported attributable to Projects then owned or leased by an Investment Affiliate (excluding Net Operating Income attributable to any such Projects which have not been so owned or leased for eight (8) fiscal quarters as of the end of such most recent fiscal quarter for which financial results have been reported, other than Net Operating Income from Overlimit Projects (as defined below) then owned or leased by an Investment Affiliate which Net Operating Income will be included in this clause (iii)) divided by the Capitalization Rate, plus (iv) the Consolidated Group Pro Rata Share of 100% of cost for any such Projects first acquired or leased by an Investment Affiliate during such eight (8) fiscal quarter period (including the amount of any assumed Indebtedness secured thereby); plus (v) cash and Cash Equivalents owned by Borrower or any other member of the Consolidated Group as of the end of the most recent fiscal quarter for which financial results have been reported, plus (vi) the Consolidated Group Pro Rata Share of all cash and Cash Equivalents owned by Investment Affiliates as of the end of the most recent fiscal quarter financial results have been reported plus (vii) Real Property Under Development and Undeveloped Land of the Consolidated Group, valued at cost, plus (viii) the Consolidated Group Pro Rata Share of any Real Property Under Development and Undeveloped Land of Investment Affiliates, valued at cost, plus (ix) First Mortgage Receivables owned by the Consolidated Group, valued in accordance with GAAP, plus (x) the Consolidated Group Pro Rata Share of First Mortgage Receivables owned by any Investment Affiliates, valued in accordance with GAAP.  As used herein, the term “Overlimit Projects” shall mean, if at any time the aggregate amount contributed to Total Asset Value under clauses (ii) and (iv) of this definition on account of acquired Projects owned or leased for more than four (4) quarters but less than nine (9) quarters would exceed twenty percent (20%) of Total Asset Value, a sufficient number of such Project(s) which would otherwise be valued at cost under such clauses (ii) or (iv), which the Company shall designate to instead be valued in accordance with clauses (i) or (iii), so that the aggregate value of the remaining Projects owned or leased for more than four (4) quarters but less than nine (9) quarters which are included at cost under clauses (ii) and (iv) of this definition do not exceed twenty percent (20%) of Total Asset Value.



e.                   The definition of “Unencumbered Real Property Value” is deleted in its entirety and shall be replaced by the following:

                                              “ 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














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