SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (the "Second
Amendment") is made as of August 31, 1998 by and among ASSOCIATED
ESTATES REALTY CORPORATION ("Borrower"); NATIONAL CITY BANK, as
Managing Agent (the "Managing Agent"), for itself and on behalf
of the Existing Banks (defined below); NATIONAL CITY BANK
("National City"); BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("Bank of America"); and COMMERZBANK
AKTIENGESELLSCHAFT ("Commerzbank").
RECITALS
A. Pursuant to a Credit Agreement (the "Credit
Agreement"), dated as of June 30, 1998, by and among Borrower,
the Managing Agent, Bank of America National Trust and Savings
Association as Documentation Agent and the Banks identified on
Schedule 1 thereof, such Banks agreed to provide Borrower with a
credit facility in the aggregate principal amount not to exceed
Two Hundred Million Dollars ($200,000,000).
B. Pursuant to a First Amendment to Credit Agreement,
dated as of August 7, 1998 (the "First Amendment"), the maximum
principal amount of the credit facility available pursuant to the
Credit Agreement was increased to an amount not to exceed Two
Hundred Thirty-Five Million Dollars ($235,000,000), and
FirstMerit Bank, N.A., and SouthTrust Bank, N.A. became "Banks"
for all purposes relevant to the aforementioned Credit Agreement;
such Credit Agreement, as so amended, is referred to herein as
the "Amended Credit Agreement". FirstMerit Bank, N.A.,
SouthTrust Bank, N.A. and all of the Banks identified on Schedule
1 to the Credit Agreement are sometimes referred to as the
"Existing Banks".
C. Section 2.1(c) of the Amended Credit Agreement provides
that Borrower may request that the maximum principal amount of
the credit facility provided thereby be increased to a principal
amount not to exceed Two Hundred Fifty Million Dollars
($250,000,000) on the terms and subject to the conditions set
forth therein.
D. Section 8.17(a) of the Credit Agreement provides, among
other things, that each Bank may assign all or a portion of its
interests, rights and obligations under the Credit Agreement to
any bank or other financial institution, provided that the amount
of the interests so assigned shall equal or exceed Five Million
Dollars ($5,000,000) of the assigning Bank's Credit Commitment,
and subject to the other terms and conditions set forth therein.
E. Borrower has requested an increase in the maximum
principal amount of the credit facility provided by the Amended
Credit Agreement in accordance with the applicable requirements
set forth therein, and Commerzbank has (1) agreed to become an
additional Bank under the Credit Agreement as contemplated by
Section 2.1(c) thereof; and (2) requested that each of National
City and Bank of America assign to it portions, each in the
amount of Five Million Dollars ($5,000,000), of their respective
1
Credit Commitments under this Amended Credit Agreement
concurrently with its becoming a Bank as aforesaid.
F. National City and Bank of America have agreed, with
Borrower's approval, to effect such assignments, and the parties
hereto have agreed to execute and deliver this Second Amendment
for the purposes of setting forth the terms of such assignments
and of the amendment to the Amended Credit Agreement with respect
to the inclusion of Commerzbank as a Bank and the increase in the
amount of the Maximum Commitment.
NOW, THEREFORE, for Ten Dollars ($10.00) and other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Second Amendment agree as
follows:
1. Incorporation of Recitals; Capitalized Terms. The
foregoing recitals are incorporated herein by this reference.
Capitalized terms which are used but not defined herein shall
have the respective meanings ascribed to such terms in the
Amended Credit Agreement.
2. Assignments.
(a) Effective on and as of August 31, 1998 (the "Effective
Date"), National City hereby assigns to Commerzbank a portion, in
the amount of Five Million Dollars ($5,000,000), of National
City's Credit Commitment under the Amended Credit Agreement.
(b) Effective on and as of the Effective Date, Bank of
America hereby assigns to Commerzbank a portion, in the amount of
Five Million Dollars ($5,000,000), of Bank of America's Credit
Commitment under the Amended Credit Agreement.
(c) Each of the foregoing assignments is made upon and
subject to the terms of Section 8.17(a) of the Amended Credit
Agreement. The Managing Agent and the Borrower hereby approve
the inclusion of Commerzbank as a "Bank" under the Amended Credit
Agreement. From and after the Effective Date, neither National
City nor Bank of America shall have any rights or obligations
under the Amended Credit Commitment in respect of that portion of
its respective Credit Commitment assigned to Commerzbank as
aforesaid (other than any rights relative to such assigned
interests under Section 9.5 of the Amended Credit Agreement which
are to survive such assignment pursuant to the express terms of
Section 9.5 of the Amended Credit Agreement. On the Effective
Date, National City and Bank of America shall each pay to
Commerzbank, in connection with the foregoing assignments: (i)
an apportioned share of the Closing Fee heretofore paid to it in
connection with the Amended Credit Agreement, in the amount of
Seventeen Thousand Six Hundred Seventy-Three and 63/100's Dollars
($17,673.63), and (ii) a prorated portion of the Facility Fee
previously received by it in respect of the initial year of the
credit facility contemplated by the Amended Credit Agreement, in
the amount of Six Thousand Two Hundred Eight and 23/100's Dollars
($6,208.23).
2
3. Assumption of the Assigned Interests; Inclusion of
Commerzbank as a Bank.
(a) Commerzbank warrants and represents to the Managing
Agent, for its benefit and for the benefit of each of the
Existing Banks, that (i) Commerzbank has the requisite right,
power and authority to perform all of the duties and obligations
of a Bank under the Amended Credit Agreement (including but not
limited to the obligations to make the Loans and to participate
in the issuance of the Letters of Credit to be made or issued as
contemplated thereby); (ii) Commerzbank has the right to receive
all payments to be made to it under the Amended Credit Agreement
and the other Loan Documents without deduction or withholding of
United States Federal income taxes; and (iii) Commerzbank has
received a true and complete copy of the Credit Agreement and of
the First Amendment, and has reviewed and approved the same.
(b) Effective on and as of the Effective Date, Commerzbank
shall become a Bank under the Amended Credit Agreement. Borrower
and the Managing Agent each acknowledges that it approves the
inclusion of Commerzbank as a Bank under the Amended Credit
Agreement, and further acknowledges that this Second Amendment
shall constitute an assignment and assumption agreement in
accordance with the terms of Section 8.17(a) of the Amended
Credit Agreement. Commerzbank agrees (i) to accept the
assignments described in the preceding paragraph; (ii) that
giving effect to such assignments and to the other transactions
contemplated hereby, Commerzbank's Credit Commitment shall be in
the amount of Twenty-Five Million Dollars ($25,000,000); and
(iii) that from and after the Effective Date it shall observe and
perform all of the duties and obligations of a Bank in accordance
with all of the requirements of the Amended Credit Agreement
(including but not limited to those which pertain to the
interests assigned to it as aforesaid). Without limiting the
generality of the foregoing, Commerzbank hereby appoints National
City Bank to serve as its Managing Agent under the Amended Credit
Agreement and the other Loan Documents, and to administer the
Amended Credit Agreement and the other Loan Documents as provided
therein.
(c) Commerzbank's address and facsimile number for the
delivery of notices under the Credit Agreement are as follows:
Commerzbank Aktiengesellschaft
Two World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xx. Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(d) Giving effect to the inclusion of Commerzbank as a Bank
as provided in this Second Amendment, the term "Maximum
Commitment", as used in the Amended Credit Agreement, shall from
and after the Effective Date mean the lesser of (i) Two Hundred
Fifty Million Dollars ($250,000,000), or (ii) the sum of the
Credit Commitments. From and after the Effective Date, Schedule
1 of the Amended Credit Agreement shall be deleted in its
3
entirety and shall be replaced with Schedule 1, attached to this
Second Amendment and made a part hereof by this reference.
4. Certain Documents to be Executed by Borrower. Borrower
shall, not later than the Effective Date, execute and deliver (a)
to Commerzbank, a Ratable Promissory Note in the form attached
hereto as Exhibit A and made a part hereof by this reference and
a Competitive Bid Note in the form attached hereto as Exhibit B
and made a part hereof by this reference; (b) to National City
Bank, a Substitute Ratable Note in the form attached hereto as
Exhibit C and made a part hereof by this reference; (c) to Bank
of America National Trust and Savings Association, a Substitute
Ratable Note in the form attached hereto as Exhibit D and made a
part hereof by this reference; and (d) to each Existing Bank, a
Substitute Competitive Bid Note in the respective forms attached
hereto as Exhibits E-1 through E-9. Promptly after its receipt
of such Substitute Competitive Bid Note, each Existing Bank shall
legend the Competitive Bid Note presently held by it to reflect
the replacement thereof by the Substitute Competitive Bid Note
delivered to it as provided by this Second Amendment.
Additionally, each of National City and Bank of America shall,
promptly after its receipt of the Substitute Ratable Note
provided to it hereunder, legend the Ratable Note presently held
by it to reflect the replacement of such Ratable Note with the
respective Substitute Ratable Note.
5. Ratification of the Amended Credit Agreement. (a)
Borrower warrants and represents to the Commerzbank, the Managing
Agent and each Existing Bank that as of the Effective Date: (i)
the Amended Credit Agreement and each Loan Document is in full
force and effect, and no such instrument has been modified or
amended except as contemplated hereby or by the First Amendment;
(ii) there is no Default or Event of Default under the Credit
Agreement; (iii) all of Borrower's representations and warranties
under the Credit Agreement are true and correct; and (iv)
Borrower has no offsets or claims against the Managing Agent or
any Existing Bank under, in respect of, or in any way related to
the Credit Agreement or any Loan Document.
(b) Borrower hereby ratifies and affirms the Amended Credit
Agreement, as further amended hereby, and agrees that as so
amended the Amended Credit Agreement shall continue in full force
and effect.
6. Execution by the Managing Agent. The Managing Agent
has executed this Second Amendment in its capacity as Managing
Agent and for and on behalf each of the Existing Banks in
accordance with the authority granted to it for such purpose
under Section 2.1(c) of the Credit Agreement.
7. Payment of Certain Costs and Fees. Borrower shall, on
the Effective Date, pay to the Managing Agent for the benefit of
Commerzbank (a) a Closing Fee in an amount equal to Fifty-Six
Thousand Two Hundred Fifty Dollars ($56,250), and (b) a Facility
Fee in respect of the initial year of the term of the Amended
Credit Agreement in the amount of Twenty-Two Thousand Five
Hundred Dollars ($22,500). Borrower shall, in addition, pay the
costs and fees reasonably incurred by the Managing Agent in
4
connection with this Second Amendment, including but not limited
to reasonable attorneys' fees.
8. Counterparts. This Second Amendment may be executed in
any number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may
execute this Second Amendment by signing any such counterpart.
IN WITNESS WHEREOF, the parties have executed and delivered
this Amendment as of the date first written above.
ASSOCIATED ESTATES REALTY NATIONAL CITY BANK,
CORPORATION Managing Agent
By:/s/ Xxxxxxx X. Xxxxxxxx By:/s/ Xxxx X. Xxxxx
Print Name:Xxxxxxx X. Xxxxxxxx Print Name: Xxxx X. Xxxxx
Title: President Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/ X.X. Xxxxx
Print Name: X.X. Xxxxx
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT
By:/s/ Xxxxxxx X. Xxxxxxx
Print Name: Xxxxxxx X. Xxxxxxx
Title:Vice President
By:/s/ Xxxxxxxxx Xxxxx
Print Name: Xxxxxxxxx Xxxxx
Title: Assistant Treasurer
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xx. Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AERC.4\2ND-AMEN.AGR
5
