FIRSTAMENDMENT TO AMENDED AND RESTATED CREDITAGREEMENT
Exhibit 4.2
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This First Amendment to Amended and Restated Credit Agreement (the “Amendment”), dated as of June 3, 2011 (the “Effective Date”), is by and among Associated Estates Realty Corporation (the “Borrower”), PNC Bank, National Association and the other banks and financial institutions whose signatures appear below (collectively, the “Lenders”) and PNC Bank, National Association, 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 Amended and Restated Credit Agreement dated as of October 18, 2010 (the “Credit Agreement”), pursuant to which such Lenders made available to Borrower an unsecured revolving credit facility with an Aggregate Commitment of $250,000,000. 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 modify certain of the 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 Borrower, the Administrative Agent and the Required Lenders have executed and delivered to the Administrative Agent a counterpart of this Amendment.
3. 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 “Capitalization Rate” is deleted in its entirety and shall
be replaced by the following:
“Capitalization Rate” means seven and one quarter percent (7.25%).
b. The definition of “Eligible Unencumbered Project” shall be amended by modifying clause (b) thereof to read: “(b) such Project is an institutional grade multifamily property as determined by the Agent in its reasonable discretion;.”
c. The definition of “Secured Indebtedness” is deleted in its entirety and
shall be replaced by the following:
“Secured Indebtedness” means any Indebtedness which is secured by a Lien on a Project or other tangible asset (which excludes, without limitation, ownership interests in any Person) which had, in the aggregate, a value in excess of the amount of such Indebtedness at the time such Indebtedness was incurred.
4. Other Changes to Credit Agreement. From and after the Effective Date, the following sections in the Credit Agreement shall be modified as follows:
a. In Section 2.21 the third sentence thereof shall be replaced by the following “Each Swing Advance shall bear interest at a variable rate for each day such Swing Advance is outstanding equal to the Base Rate Option for such day or, if so elected by the Borrower in the applicable Swing Loan Request, the Daily LIBOR Rate plus the then-current LIBOR Applicable Margin.”
b. In Section 7.1(c) the following clause shall be added to the end of such subsection:
“provided that any Compliance Certificate may address both this Agreement as well as that certain Term Loan Agreement dated as of June 3, 2011 by and among Borrower, Administrative Agent and certain other lenders;”
c. In Section 7.1(f) clause (iv) thereof shall be deleted in its entirety and replaced with the following: “(iv) any notice of default on any (x) Recourse Indebtedness that exceeds $5,000,000 individually or in the aggregate, or (y) Non-Recourse Indebtedness that exceeds $25,000,000 individually or in the aggregate.”
d. In Section 8.6 clause (A) thereof shall be deleted in its entirety and replaced with the following: “(A) any Recourse Indebtedness of the Borrower or any other member of the Consolidated Group having an outstanding principal balance in excess of $5,000,000 individually or in the aggregate.”
e. The caption (i.e. “RE:”) paragraph of the form of Compliance Certificate attached to the Credit Agreement as Exhibit B shall be deleted in its entirety and shall be replaced by the following:
| Re: | (1) Term Loan Agreement dated as of June 3, 2011 (as amended, modified, supplemented, restated, or renewed, from time to time, the “Term Agreement”) between ASSOCIATED ESTATES REALTY CORPORATION (the “Borrower”), and PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent for itself and the other lenders parties thereto from time to time (“Term Lenders”). (2) Amended and Restated Credit Agreement dated as of October 18, 2010 (as amended, modified, supplemented, restated, or renewed, from time to time, together with the Term Agreement, the “Agreement”) between ASSOCIATED ESTATES REALTY CORPORATION (the “Borrower”), and PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent for itself and the other lenders parties thereto from time to time (together with the Term Lenders, the “Lenders”).” |
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5. Representations and Warranties. Borrower hereby represents and warrants to Lenders and the Administrative Agent that as of the Effective Date:
a. no Event of Default or Potential Default exists under the Credit Agreement or the other Loan Documents or will exist after giving effect to the terms of this Amendment;
b. the representations and warranties contained in Article VI of the Credit Agreement are true and correct;
c. the Credit Agreement and the other Loan Documents are in full force and effect and it has no defenses or offsets to, or claims or counterclaims relating to, the obligations under the Credit Agreement or any of the other Loan Documents;
d. other than changes which have been previously provided to and approved by the Administrative Agent, no changes have been made to its organizational documents since the Agreement Execution Date; and
e. it has full power and authority to execute this Amendment.
6. Reimbursement to Administrative Agent. The Borrower agrees to reimburse the Administrative Agent for all reasonable out-of-pocket expenses (including, but not limited to fees relating to legal, consulting, or auditing expenses) incurred in connection with the preparation, negotiation, and consummation of this Amendment.
7. References to Credit Agreement; Inconsistency. All references in the Loan Documents to the Credit Agreement henceforth shall be deemed to refer to the Credit Agreement as amended by this Amendment. In the event of a conflict or inconsistency between the provisions of the Loan Documents and the provisions of this Amendment, the provisions of this Amendment shall govern.
8. Continuing Force and Effect of Credit Agreement and Loan Documents. The provisions of the Credit Agreement and other Loan Documents are in full force and effect, except as amended herein, and the Loan Documents as so amended are hereby ratified and reaffirmed by Borrower. Nothing contained in this Amendment shall be construed to disturb, discharge, cancel, impair or extinguish the indebtedness evidenced by the existing Notes and the other Loan Documents.
9. Counterparts. This 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. This Amendment 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.
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IN WITNESS WHEREOF, Borrower, the Required 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/ Bradley Van Auken
Name: Bradley A. Van Auken
Title: Vice President
1 AEC Parkway
Richmond Heights, Ohio 44143
Attention: Vice President and General Counsel
Telephone: (216) 797-8785
Facsimile: (216) 797-8719
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The undersigned, being all of the Subsidiary Guarantors under the Credit Agreement, hereby consent to and approve of the foregoing Amendment and agree that their obligations under the Subsidiary Guaranty shall continue in full force and effect with respect to the Loan, as increased and modified by the foregoing Amendment:
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| SANDLER AT ALTA LAGO, LLC, By: Associated Estates Realty Corporation, By: /s/Bradley A. Van Auken Title: Vice President |
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| BUCKHEAD AERC, LLC, By: Associated Estates Realty Corporation, By: /s/Bradley A. Van Auken Title: Vice President |
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| AERC WESTWIND, LLC, By: Associated Estates Realty Corporation, By: /s/Bradley A. Van Auken Title: Vice President |
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| AERC SAN RAPHAEL, LLC, By: Associated Estates Realty Corporation, By: /s/Bradley A. Van Auken Title: Vice President |
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| ASPEN LAKES - AERC, INC., By: /s/Bradley A. Van Auken
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| AERC BEDFORD COMMONS, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken |
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| AERC LAKE FOREST, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken |
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| AERC MORGAN PLACE, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken |
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| AERC ARROWHEAD STATION, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken |
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| AERC BENNELL, INC., By: /s/Bradley A. Van Auken |
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| AERC REMINGTON PLACE, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken
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| AERC WILLIAMSBURG, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken
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| AERC WESTCHESTER, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken |
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| AERC STERLING PARK, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken |
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| AERC KENSINGTON GROVE, INC., By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken |
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| AERC WESTERN RESERVE, INC., By: /s/Bradley A. Van Auken |
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| AERC SPRING BROOK, LLC, a Delaware limited liability company By: AERC Brook, Inc., its Manager By: /s/Bradley A. Van Auken Title: Vice President
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| AERC LANDINGS AT PRESERVE, LLC, a Delaware limited liability company By: AERC Landings, Inc., Manager By: /s/Bradley A. Van Auken Title: Vice President |
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a Delaware limited liability company By: AERC Country I, Inc., its Manager By: /s/Bradley A. Van Auken Title: Vice President |
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| AERC GEORGETOWN PARK, LLC, a Delaware limited liability company By: AERC Georgetown, Inc., its Manager By: /s/Bradley A. Van Auken Title: Vice President |
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| AERC OAKS HAMPTON, LLC, a Delaware limited liability company By: AERC Oaks, Inc., its Manager By: /s/Bradley A. Van Auken Title: Vice President |
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| AERC DPF PHASE I, LLC,
By: AERC DPF Georgia Ventures, LLC,
By: AERC of Georgia, Inc.,
By: /s/Bradley A. Van Auken Title: Vice President
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| AERC TURNBERRY, INC. A Delaware Corporation
By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken Title: Vice President |
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| AERC CENTRAL PARK PLACE, LLC A Delaware limited liability company By: AERC Central Park, Inc. its Manager By: /s/Bradley A. Van Auken Title: Vice President |
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A Delaware limited liability company
By: AERC Clinton, Inc., its Manager
By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken Title: Vice President
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| AERC SUMMER RIDGE, LLC A Delaware limited liability company
By: AERC Summer, Inc., its Manager
By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken Title: Vice President
AERC DPF PHASE II, LLC, a Delaware limited liability company
By: AERC DPF Georgia Ventures, LLC
By: AERC of Georgia, Inc., its Sole Member
By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken Title: Vice President
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| AERC CHRISTOPHER WREN, INC., a Delaware corporation
By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken Title: Vice President
AERC HEATHERMOOR, INC. a Delaware corporation
By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken Title: Vice President
AERC PERIMETER LAKES, INC., a Delaware corporation
By: /s/Bradley A. Van Auken Name: Bradley A. Van Auken Title: Vice President |
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COMMITMENT: PNC BANK, NATIONAL ASSOCIATION,
$50,000,000 Individually and as Administrative Agent
By: /s/ John E. Wilgus, II
Name: John E. Wilgus
Title: Senior Vice President
PNC Real Estate
1900 East Ninth Street - 22nd Floor
Mail Stop: B7-YB13-22-1
Cleveland, OH 44114
Phone: 216 ###-###-####
Facsimile: 216 ###-###-####
Attention: John E. Wilgus, II
Senior Vice President
Real Estate Banking
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COMMITMENT: WELLS FARGO BANK, N.A., individually and as
$50,000,000 Syndication Agent
By: /s/ Antoinette G. Perry
Name: Antoinette G. Perry
Title: Vice President
200 Public Square
Suite 3200
Cleveland, OH 44114
Attention: Toni G. Perry
Phone: 216 ###-###-####
Facsimile: 216 ###-###-####
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COMMITMENT: U.S. BANK NATIONAL ASSOCIATION,
$30,000,000 individually and as Documentation Agent
By: /s/ Curt M. Steiner
Name: Curt M. Steiner
Title: Senior Vice President
U.S. Bank National Association
209 South LaSalle Street, Suite 210
Chicago, IL 60604
Attention: Curt M. Steiner
Senior Vice President
Phone: (312 ###-###-####
Facsimile: (312 ###-###-####
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COMMITMENT: RAYMOND JAMES BANK, FSB
$25,000,000
By: /s/ James Armstrong
Name: James Armstrong
Title: Vice President
710 Carillon Parkway
St. Petersburg, FL 33716
Attention: James Armstrong
Phone: 727 ###-###-####
Facsimile: 866 ###-###-####
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COMMITMENT: THE HUNTINGTON NATIONAL BANK
$25,000,000
By: /s/ Michael S. Kauffman
Name: Michael S. Kauffman
Title: SVP
917 Euclid Avenue, CM17
Cleveland, OH 44115
Attention: Jennifer Hearns
Phone: 216 ###-###-####
Facsimile: 216 ###-###-####
with notice to:
917 Euclid Avenue, CM17
Cleveland, OH 44115
Attention: Timothy Smith
Phone: 216 ###-###-####
Facsimile: 216 ###-###-####
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COMMITMENT: CITIBANK, N.A.
$25,000,000
By: /s/ John C. Rowland
Name: John C. Rowland
Title: Vice President
Citibank, N.A.
388 Greenwich Street, 23rd Floor
New York, NY 10013
Attention: Rita C. Lai
Phone: 212 ###-###-####
Facsimile: 212 ###-###-####
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COMMITMENT: COMPASS BANK, an Alabama banking
$25,000,000 corporation
By: /s/ S. Kent Gorman
Name: S. Kent Gorman
Title: Senior Vice President
BBVA Compass
15 South 20th Street, Suite 1504
Birmingham, AL 35233
Attention: S. Kent Gorman
Phone: 205 ###-###-####
Facsimile: 205 ###-###-####
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COMMITMENT: RBS CITIZENS BANK N.A. d/b/a CHARTER
$20,000,000 ONE
By: /s/ Erin L. Mahon
Name: Erin L. Mahon
Title: Vice President
RBS Citizens Bank N.A. d/b/a Charter One
1215 Superior Avenue, OH S675
Cleveland, OH 44114
Attention: Samuel A. Bluso
Phone: 216 ###-###-####
Facsimile: 216 ###-###-####
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