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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 30, 1998, by
and among ASSOCIATED ESTATES REALTY CORPORATION, an Ohio
corporation (hereinafter, "Borrower"), the banks and lending
institutions set forth on Schedule 1 hereto (the "Banks"), and
NATIONAL CITY BANK, a national banking association ("NCB"), in
its capacity as agent for the Banks (in such capacity, the
"Managing Agent"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking association, in its capacity as
Documentation Agent (in such capacity, the "Documentation
Agent").
ARTICLE 1.
INTERPRETATION
Section 1.1 General. For the purposes of this
Agreement, the following general rules of interpretation shall
apply to the extent they are not clearly inconsistent with the
context or the subject matter of specific provisions hereof:
(a) The expression "this Agreement" shall mean this
Credit Agreement (including all of the Schedules and Exhibits
annexed hereto) as originally executed, or, if supplemented,
amended or restated from time to time, as so supplemented,
amended or restated;
(b) Singular nouns shall include the plural and vice
versa, and all references to dollars shall mean United States
Dollars;
(c) Accounting terms not otherwise defined herein
shall have the meanings assigned to them in accordance with
Generally Accepted Accounting Principles (as hereinafter
defined); and
(d) All Schedules and Exhibits to this instrument
shall be deemed to be incorporated herein by reference.
Section 1.2 Definitions. In addition to terms defined
elsewhere in this Agreement, the terms set forth below shall have
the following meanings for the purpose of this Agreement:
"Absolute Interest Period" means, with respect to a
Competitive Bid Loan made at an Absolute Rate, a period not more
than one hundred eighty (180) days after the Draw Date for such
Competitive Bid Loan, as requested by Borrower and offered by a
Bank, but in no event extending beyond the Termination Date. If
an Absolute Interest Period would end on a day which is not a
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Business Day, such Absolute Interest Period shall end on the next
succeeding Business Day.
"Absolute Rate" means a fixed rate of interest (rounded
to the nearest 1/100 of 1%) for an Absolute Interest Period with
respect to a Competitive Bid Loan offered by a Bank and accepted
by the Borrower at such rate.
"Absolute Rate Loan" means a Competitive Bid Loan made
at the Absolute Rate.
"Accountants" means Price, Waterhouse & Co., or such
other nationally recognized firm of certified public accountants
as may from time to time be selected by Borrower and acceptable
to the Managing Agent, with the consent of the Required Banks.
"Adjusted Prime Rate" means, at any time, the sum of
the Prime Rate plus the Prime Rate Margin in effect at such time.
"Affiliate" means, in relation to any Person (an
"Affiliated Person"), any Person (other than a Subsidiary) which
(directly or indirectly) controls or is controlled by or is under
common control with such Affiliated Person. For the purposes of
this definition, the term "control" shall mean the possession
(directly or indirectly) of the power to direct or to cause the
direction of the management or the policies of a Person, whether
through the ownership of shares of any class in the capital or
any other voting securities of such Person, by contract or
otherwise.
"Agency Fee" means an annual fee, payable to the
Managing Agent in consideration for its serving as the Managing
Agent in respect of the Loan Documents, as and when set forth in
a letter agreement between Borrower and the Managing Agent dated
of even date herewith.
"Aggregate Consolidated Indebtedness" means, at any
time, the sum of (i) the outstanding principal balance at such
time of Consolidated Indebtedness, plus (ii) the amount at such
time of the Consolidated Group Percentage Interest of all
Investment Entity Indebtedness.
"Aggregate Market Value" means, at any time, the sum of
(i) Market Value at such time, plus (ii) the amount at such time
of the Consolidated Group Percentage Interest of Investment
Entity Market Value.
"Apartment Suites" means all multi-family residential
rental units owned by Borrower, its Consolidated Subsidiaries or
any Investment Entity, without regard to whether such units are
subject to any governmental financial support, operating
assistance or regulation.
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"Applicable Margin" means, as at any date, a percentage
per annum for Prime Rate Loans and Ratable LIBOR Rate Loans,
determined by reference to Borrower's Debt Rating as set forth
below:
Debt Rating
------------ Ratable LIBOR Prime
Level S&P Xxxxx'x Rate Margin Rate Margin
(expressed in (expressed in
basis points) basis points)
----- ------- --------- ------------- -------------
1 A- to A+ A3 to A1 70 -0-
2 BBB+ Baa1 75 -0-
3 BBB Xxx0 00 -0-
0 XXX- Xxx0 100 -0-
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