FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (the "First
Amendment") is made as of August ___, 1998 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); and FIRSTMERIT BANK, N.A.
("FirstMerit") and SOUTHTRUST BANK, N.A. ("SouthTrust";
FirstMerit and SouthTrust are sometimes collectively referred to
as the "New Banks").
RECITALS
A. Pursuant to a Credit Agreement (the "Credit
Agreement"), dated as of June 30, 1998, by and among Borrower,
the Managing Agent, the Documentation Agent and the Banks
identified on Schedule 1 thereof (the "Existing Banks"), the
Existing 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. Section 2.1(c) of the Credit Agreement provides that
Borrower may request that the maximum principal amount of the
credit facility provided by the Credit Agreement 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.
C. Borrower has requested an increase in the maximum
principal amount of the credit facility provided by the Credit
Agreement in accordance with the applicable requirements of the
Credit Agreement, and FirstMerit and SouthTrust have agreed to
become additional Banks under the Credit Agreement as
contemplated by Section 2.1(c).
NOW, THEREFORE, for Ten Dollars ($10.00) and other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this First Amendment agree as
follows:
1. Incorporation of Recitals; Capitalized Terms. The
foregoing recitals to this First Amendment 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 Credit Agreement.
2. Inclusion of FirstMerit as a Bank; Credit Commitment
and the Maximum Commitment. (a) From and after August __, 1998
(the "Effective Date"), each of the New Banks shall be a Bank
under the Credit Agreement; FirstMerit's Credit Commitment shall
be in the amount of Ten Million Dollars ($10,000,000), and
SouthTrust's Credit Commitment shall be in the amount of Twenty-
Five Million Dollars ($25,000,000). Each of the New Banks
acknowledges its receipt and approval of the Credit Agreement,
and agrees that from and after the Effective Date it shall
observe and perform all of the duties and obligations of a Bank
in accordance with the requirements of the Credit Agreement.
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Without limiting the generality of the foregoing, each New Bank
hereby appoints National City Bank to serve as its Managing Agent
under the Credit Agreement and the other Loan Documents, and to
administer the Credit Agreement and the other Loan Documents as
provided in the Credit Agreement.
(b) FirstMerit's address and facsimile number for the
delivery of notices under the Credit Agreement are as follows:
FirstMerit Bank, N.A.
123 West Prospect Avenue
Cleveland, Ohio 44115-1070
Facsimile No.: (216) 621-3201
Attn: Peter D. Collins, Vice-President
(c) SouthTrust's address and facsimile number for the
delivery of notices under the Credit Agreement are as follows:
SouthTrust Bank, National Association
Sam Boroughs
Attn: Corporate Banking - 11th Floor Tower
420 North 20th Street
Birmingham, Alabama 35203
Facsimile No.: (205) 254-8270
(d) Giving effect to the inclusion of the New Banks as
Banks as provided in this First Amendment, the term "Maximum
Commitment", as used in the Credit Agreement, shall from and
after the Effective Date mean the lesser of (i) Two Hundred
Thirty-Five Million Dollars ($235,000,000), or (ii) the sum of
the Credit Commitments, subject to increase in accordance with
Section 2.1(c) of the Credit Agreement to an amount not to exceed
Two Hundred Fifty Million Dollars ($250,000,000). From and after
the Effective Date, Schedule 1 of the Credit Agreement shall be
deleted in its entirety and shall be replaced with Schedule 1,
attached to this First Amendment and made a part hereof by this
reference.
3. Certain Documents to be Executed by Borrower. Borrower
shall, not later than the Effective Date, execute and deliver (a)
to FirstMerit, 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 SouthTrust, a
Ratable Note in the form attached hereto as Exhibit C and made a
part hereof by this reference and a Competitive Bid Note in the
form attached hereto as Exhibit D and made a part hereof by this
reference; and (c) to each Existing Bank, a Substitute
Competitive Bid Note in the respective forms attached hereto as
Exhibits E-1 through E-7. 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 First Amendment.
4. Ratification of the Credit Agreement. (a) Borrower
warrants and represents to the New Banks, the Managing Agent and
each Existing Bank that as of the Effective Date (i) the Credit
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Agreement and each Loan Document is in full force and effect;
(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 Credit
Agreement, as amended hereby, and agrees that as so amended the
Credit Agreement shall continue in full force and effect.
5. Execution by the Managing Agent. The Managing Agent
has executed this First 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.
6. Payment of Certain Costs and Fees. Borrower shall, on
the Effective Date, pay to the Managing Agent (a) for the benefit
of FirstMerit (i) a Closing Fee in an amount equal to
Thirty-Seven Thousand Five Hundred Dollars ($37,500,000), and
(ii) a Facility Fee in respect of the initial year of the term of
the Credit Agreement in the amount of Fifteen Thousand Dollars
($15,000); and (b) for the benefit of SouthTrust (i) a Closing
Fee in the amount of Ninety-Three Thousand Seven Hundred Fifty
Dollars ($93,750), and (ii) a Facility Fee in respect of the
initial year of the term of the Credit Agreement in the amount of
Thirty-Seven Thousand Five Hundred Dollars ($37,500). Borrower
shall, in addition, pay the costs and fees reasonably incurred by
the Managing Agent in connection with this First Amendment,
including but not limited to reasonable attorneys' fees.
7. Counterparts. This First Amendment may be
executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties
hereto may execute this Amendment by signing any such
counterpart.
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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/ Martin A. Fishman By:/s/ Gary L. Wimer
Print Name:Martin A. Fishman Print Name: Gary L. Wimer
Title:Vice President Title: Vice President
FIRSTMERIT BANK, N.A.
By:/s/ Peter D. Collins
Print Name: Peter D. Collins
Title: Vice President
123 West Prospect Avenue
Cleveland, Ohio 44115-1070
(216) 621-3201
SOUTHTRUST BANK, N.A.
By:/s/ Samuel L. Boroughs
Print Name: Samuel L. Boroughs
Title: Commercial Loan Officer
420 North 20th Street
Birmingham, Alabama 35203
(205) 254-5039
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ASSOCIATED ESTATES REALTY CORPORATION
5025 Swetland Court
Cleveland, Ohio 44143-1467
Phone (216-261-5000) - Fax (216-473-8105)
September 6, 1998
Commerzbank AG, Chicago Branch
Two World Trade Center
New York, NY 10281-1050
Attn: Mr. Douglas Traynor
Re: Credit Agreement originally dated as of June 30, 1998, among
Associated Estates Realty Corporation, National City Bank,
as Managing Agent, Bank of America National Trust and
Savings Association as Documentation Agent, and the Banks
Identified Therein.
Gentlemen:
Reference is made to the captioned credit agreement, as
amended by Amendment No. 1 to Credit Agreement, dated as of
August 6, 1998 (as so amended, the "Credit Agreement").
Capitalized terms which are used but not defined herein shall
have meanings set forth in the Credit Agreement.
We understand that Commerzbank AG, Chicago Branch
("Commerzbank"), intends to become a Bank under the Credit
Agreement pursuant to Section 2.1 (d) thereof, with a Credit
Commitment in the amount of $25,000,000, and that in connection
with such inclusion Commerzbank has requested clarification with
respect to certain provisions of Section 2.10 of the Credit
Agreement. This letter will confirm that notwithstanding those
provisions of Section 2.10(a) and 2.10(c) of the Credit
Agreement, which extend the increased-cost protections set forth
therein to "nationally chartered banking associations in the
United States of America," Commerzbank (which you have advised us
is a German banking corporation licensed to do business in the
State of New York) will, from and after becoming a "Bank" under
the Credit Agreement, be entitled to the benefits of the
increased-cost protections afforded thereby to the same extent
and upon the same terms and procedures as would apply if
Commerzbank were a "nationally chartered banking association in
the United States of America."
Please feel free to contact the undersigned with any
questions or comments. Please note that effective March 14, my
telephone number changed to 216/797-8780; my fax number changed
to 216/797-8719.
Sincerely,
ASSOCIATED ESTATES REALTY CORPORATION
By:/s/ Martin A. Fishman
Martin A. Fishman, Vice President
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