Document:

Unassociated Document

    Exhibit
10(f)

     

    CONFORMED
COPY

    

    AMENDMENT

     

    This
AMENDMENT, dated as of April 25, 2008 (this “Amendment”),
among AEP Texas Central Company, a Texas corporation (“ATCC”),
AEP Texas North Company, a Texas corporation (“ATNC”),
AMERICAN ELECTRIC POWER COMPANY, INC., a New York corporation (“AEP”),
Appalachian Power Company, a Virginia corporation (“APC”),
Columbus Southern Power Company, an Ohio corporation (“CSPC”),
Indiana Michigan Power Company, an Indiana corporation (“IMPC”),
Kentucky Power Company, a Kentucky corporation (“KPC”),
Ohio Power Company, an Ohio corporation (“OPC”),
Public Service Company of Oklahoma, an Oklahoma corporation (“PSCO”),
and Southwestern Electric Power Company, a Delaware corporation (“SEPC”)
(each a “Borrower”,
and collectively, the “Borrowers”),
the banks, financial institutions and other institutional lenders listed on the
signatures pages hereof, the Swingline Bank (as hereinafter defined), the LC
Issuing Banks (as hereinafter defined) and JPMORGAN CHASE BANK, N.A. (“JPMCB”),
as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders (as defined in the Credit Agreement referred to
below) and the LC Issuing Banks.

     

    PRELIMINARY
STATEMENT:

     

    The
Borrowers, the Administrative Agent, the Swingline Bank, the LC Issuing Banks
and certain financial institutions acting as “Lenders” thereunder have entered
into a Credit Agreement, dated as of April 4, 2008 (the “Credit
Agreement”; capitalized terms used herein, unless otherwise defined
herein, shall have the meanings assigned to them in the Credit Agreement) to
provide to the Borrowers a $350,000,000 364-day revolving credit and letter of
credit facility, with a term loan conversion option, to be used for working
capital and other general corporate purposes.  The Borrowers have
requested that the Letters of Credit be made available in the form of
irrevocable direct pay letters of credit to support obligations of the Borrowers
with respect to certain pollution control revenue bonds that may be issued from
time to time.  In order to accommodate the Borrowers’ request and to
conform certain provisions of the Credit Agreement to the documents relating to
such bonds, the Borrowers, the Administrative Agent, the LC Issuing Banks and
the Required Lenders have agreed to amend the Credit Agreement on the terms and
conditions set forth herein.

     

    NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as
follows:

     

    SECTION
1. Amendments to
Credit Agreement.  Subject to satisfaction of the conditions
precedent set forth in Section 2 below, the Credit Agreement is hereby amended
as follows:

     

    (a) The
following terms are inserted in Section 1.01 in appropriate alphabetical
order:

     

    ‘“Bond Letter of
Credit” means any Letter of Credit issued to support certain obligations
to pay the principal of, interest on and/or purchase or redemption price of
Bonds.’

     

    ‘“Bonds”
means pollution control revenue bonds (or similar obligations, however
designated) issued pursuant to an Indenture between the Trustee and the Issuer
named therein.’

     

    ‘“Custodian”
means, for any series of Bonds, any Person acting as bailee and agent for the
Administrative Agent (on behalf of the applicable LC Issuing Bank and the
Lenders) under any Pledge Agreement relating to such Bonds.’

     

    ‘“Indenture”
means, for any Series of Bonds, the indenture pursuant to which such Bonds are
issued and any supplement thereto relating to such Bonds.’

     

    ‘“Issuer”
means, for any series of Bonds, the issuer of such Bonds under the applicable
Indenture.’

     

    ‘“Issuer
Agreement”  means, for any series of Bonds, the agreement
between the applicable Issuer and the applicable Borrower pursuant to which (i)
the proceeds of such Bonds are loaned by such Issuer to the applicable Borrower,
together with any promissory note or other instrument evidencing the
Indebtedness of such Borrower under such agreement, or (ii) such Borrower agrees
to pay the purchase price of, or rent with respect to, the facilities financed
or refinanced with the proceeds of such Bonds.’

     

    ‘“Official
Statement” means, for any series of Bonds, the official statement,
reoffering circular or similar disclosure document (however designated) relating
to such Bonds and the applicable LC Issuing Bank, as amended and supplemented
from time to time, and all documents incorporated therein (or in any such
supplement or amendment) by reference.’

     

    ‘“Pledge
Agreement” means, for any series of Bonds, the pledge agreement or
custodian agreement (or similar agreement, however designated), among the
Administrative Agent, the applicable Borrower and the applicable Custodian with
respect to such Bonds, setting forth certain terms relating to the pledge and/or
ownership of any such Bonds pending the remarketing thereof pursuant to the
applicable Remarketing Agreement.’

     

    ‘“Related
Documents” means, for any series of Bonds, such Bonds and the Indenture,
the Issuer Agreement, any Remarketing Agreement and any Pledge Agreement
relating to such Bonds.’

     

    ‘“Remarketing
Agent” means, for any series of Bonds, any Person acting in the capacity
of remarketing agent for such Bonds pursuant to a Remarketing Agreement relating
to such Bonds.’

     

    ‘“Remarketing
Agreement” means, for any series of Bonds, any agreement or other
arrangement pursuant to which the applicable Remarketing Agent has agreed to act
in such capacity with respect to such Bonds tendered for purchase pursuant to
the applicable Indenture.’

     

    ‘“Trustee”
means, for any series of Bonds, the Person acting in the capacity of trustee for
the holders of such Bonds under the Indenture pursuant to which such Bonds were
issued.’.

     

    (b) The following sentence is inserted at
the end of Section 2.04(a):

     

    “Without
limiting the foregoing, any LC Issuing Bank that issues a Bond Letter of Credit
agrees that all Bonds pledged to such LC Issuing Bank pursuant to any applicable
Pledge Agreement or otherwise registered in the name of such LC Issuing Bank
pursuant to the other Related Document will be held for the benefit of such LC
Issuing Bank and the Lenders and to apply and/or remit all proceeds from the
sale or remarketing of such Bonds in accordance with Section
2.15(f).”

    

    (c) The following new subsection (f) is
inserted at the end of Section 2.15:

     

    “(f)           Notwithstanding
anything to the contrary set forth in subsection (a) above or Section 2.04(d),
each Borrower may pay, or cause to be paid pursuant to the applicable Related
Documents, reimbursement obligations with respect to any drawing under a Bond
Letter of Credit issued for the account of such Borrower directly to the LC
Issuing Bank with respect to such Bond Letter of Credit.  Upon receipt
of any such payment, such LC Issuing Bank will promptly (i) (A) apply such
payment to that portion of such reimbursement obligations participations in
which have not been purchased by the Lenders under Section 2.04(e)) and (B)
remit the balance of such payment to the Administrative Agent for further
payment to the Lenders that have purchased participations in such reimbursement
obligations pursuant to Section 2.04(e), or (ii) if such reimbursement
obligations have been financed with Borrowings, remit such payment to the
Administrative Agent, which will apply such payment to the prepayment of
Borrowings in a principal amount equal to the principal amount of such
reimbursement obligations so financed.  The Administrative Agent shall
select the Borrowings to be prepaid pursuant to clause (ii) above in a manner
that will mitigate, to the extent practical, the applicable Borrower’s
obligations under Section 8.04(c) with respect to such prepayment.”

    

    (d) The
following new Section 3.04 is inserted after Section 3.03:

     

    “SECTION 3.04.
Conditions Precedent to Issuance of Each Bond Letter of
Credit.

     

    The
obligation of each LC Issuing Bank to issue any Bond Letter of Credit in
connection with any series of Bonds shall be subject to the satisfaction of the
conditions precedent set forth in Sections 3.01, 3.02 and (if applicable) 3.03
and the further conditions precedent that:

     

    (a)           On
or prior to the date of such issuance, the Administrative Agent shall have
received the following, in form and substance reasonably satisfactory to the
Administrative Agent and the applicable LC Issuing Bank and in sufficient copies
for each Lender:

     

    (i)           Counterparts
of any Pledge Agreement relating to such Bonds, duly executed by the applicable
Borrower, the Administrative Agent and the applicable Custodian.

     

    (ii)           Certified
copies of the applicable Related Documents (which, in the case of the applicable
Bonds, may be a specimen of such Bonds).

     

    (iii)           Certified
copies of the resolutions of the board of directors of the applicable Borrower
approving the Related Documents to which such Borrower is a party in connection
with such Bond Letter of Credit, and of all documents evidencing other necessary
corporate action and Governmental Approvals, if any, with respect to such
Related Documents.

     

    (iv)           A
certificate of the Secretary or Assistant Secretary of the applicable Borrower
certifying the names and true signatures of such Borrower authorized to sign the
Related Documents to which such Borrower is a party in connection with such Bond
Letter of Credit and the other documents to be delivered by such Borrower
hereunder in connection with the issuance of such Bond Letter of
Credit.

     

    (v)           A
copy of the Official Statement relating to the Bonds to be supported by such
Bond Letter of Credit.

     

    (vi)           A
certificate of an authorized officer of the applicable Custodian certifying the
names, true signatures and incumbency of the officers of such Custodian
authorized to sign the applicable Pledge Agreement.

     

    (vii)           A
certificate of an authorized officer of the applicable Trustee certifying the
names, true signatures and incumbency of the officers of such Trustee authorized
to make drawings under such Bond Letter of Credit.

     

    (viii)                      Favorable
opinions of counsel to the applicable Borrower and the applicable Issuer, in
each case, with respect to the Related Documents to which each such Person is a
party and such other matters as the Administrative Agent and the applicable LC
Issuing Bank may reasonably request.

     

    (ix)           A
reliance letter from bond counsel relating to the Bonds to be supported by such
Bond Letter of Credit permitting the Lenders to rely on the approving opinion of
bond counsel with respect to such Bonds.

     

    (x)           The
Administrative Agent and the applicable LC Issuing Bank shall have received such
other documents, certificates, opinions approvals and filings with respect to
the applicable Related Documents as the Administrative Agent or such LC Issuing
Bank may reasonably request.

     

    (b)           On
the date of such issuance, the following statements shall be true and correct,
and the Administrative Agent shall have received on or before such date for the
account of the applicable LC Issuing Bank and each Lender a certificate signed
by a duly authorized officer of the applicable Borrower, dated such date,
stating that the following representations and warranties are true and correct
in all material respects on and as of such date, as though made on and as of
such date:

     

    (i)           The
execution, delivery and performance by such Borrower of each Related Document to
which such Borrower is a party in connection with such Bond Letter of Credit,
and the consummation of the transactions contemplated thereby, are within such
Borrower’s corporate powers, have been duly authorized by all necessary action,
and do not contravene (i) such Borrower’s certificate of incorporation or
by-laws, (ii) law binding or affecting such Borrower or (iii) any
contractual restriction binding on or affecting such Borrower or any of its
properties.

     

    (ii)           Each
Related Document to which such Borrower is a party in connection with such Bond
Letter of Credit has been duly executed and delivered by such Borrower, and each
such Related Document is the legal, valid and binding obligation of such
Borrower enforceable against such Borrower in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or other similar laws affecting the enforcement of
creditors’ rights in general, and except as the availability of the remedy of
specific performance is subject to general principles of equity (regardless of
whether such remedy is sought in a proceeding in equity or at law) and subject
to requirements of reasonableness, good faith and fair
dealing.  

     

    (iii)           No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is
required for the due execution, delivery and performance by such Borrower of any
Related Document to which such Borrower is a party in connection with such Bond
Letter of Credit, except for such Governmental Approvals that will have been
obtained and will be in full force and effect on or prior to the date of
execution and delivery of such Related Documents.

     

    (iv)           The
representations and warranties of such Borrower in the Related Documents to
which such Borrower is a party in connection with such Bond Letter of Credit are
true and correct in all material respects.”.

     

    (e) The
following new subsection (j) is inserted after Section 5.01(i):

     

    “(j)           Control of
Purchased Bonds.  So long as any Bond Letter of Credit issued
for the account of such Borrower shall remain outstanding, cause each Bond
purchased with the proceeds of such Bond Letter of Credit to be subject to the
Lien of an applicable Pledge Agreement or otherwise registered in the name of
the applicable LC Issuing Bank, the Administrative Agent or any nominee of such
LC Issuing Bank or of the Administrative Agent pending the remarketing of such
Bonds pursuant to the applicable Remarketing Agreement and the other applicable
Related Documents.”

    

    (f) The
following new subsections (h) through (k) are inserted after Section
5.02(g):

     

    “(h)           Optional
Redemption of Bonds.  So long as any Bond Letter of Credit
issued for the account of such Borrower shall remain outstanding, cause or
permit delivery of a notice of an optional redemption or purchase of the
applicable Bonds or of a change in the interest modes (other than to or from a
mode in which interest is payable at a rate determined daily or weekly) on such
Bonds resulting in a mandatory redemption or purchase of such Bonds under the
applicable Indenture, unless (i) the Borrower has deposited with the
Administrative Agent, the LC Issuing Bank or the applicable Trustee an amount
equal to the principal of, premium, if any, and interest on such Bonds on the
date of such redemption or purchase, or (ii) any notice of such redemption or
purchase or change in the applicable interest mode is conditional upon receipt
by the applicable Trustee or paying agent on or prior to the date fixed for the
applicable redemption or purchase of funds (other than funds drawn under such
Bond Letter of Credit) sufficient to pay the principal of, premium, if any, and
interest on such Bonds on the date of such redemption or purchase.

     

    (i)           Amendments to
Indenture.  So long as any Bond Letter of Credit issued for the
account of such Borrower shall remain outstanding, amend, modify, terminate or
grant, or permit the amendment, modification, termination or grant of, any
waiver under (or consent to, or permit or suffer to occur any action or omission
which results in, or is equivalent to, an amendment, modification, or grant of a
waiver under) any provision of the applicable Indenture that would (i) directly
affect the rights or obligations of the applicable LC Issuing Bank under the
applicable Related Documents without the prior written consent of such LC
Issuing Bank or (ii) have an adverse effect on the rights or obligations of the
Lenders hereunder without the prior written consent of the Required
Lenders.

     

    (j)           Official
Statement.  So long as any Bond Letter of Credit issued for the
account of such Borrower shall remain outstanding, refer to the applicable LC
Issuing Bank in the Official Statement with respect to the applicable Bonds or
make any changes in reference to such LC Issuing Bank in any revision, amendment
or supplement without the prior consent of such LC Issuing Bank, or revise,
amend or supplement such Official Statement without providing a copy of such
revision, amendment or supplement, as the case may be, to such LC Issuing
Bank.  

     

    (k)           Use of Proceeds
of Bond Letter of Credit.  So long as any Bond Letter of Credit
issued for the account of such Borrower shall remain outstanding, permit any
proceeds of such Bond Letter of Credit to be used for any purpose other than the
payment of the principal of, interest on, redemption price of and purchase price
of the applicable Bonds.”.

     

    (g) Clause (i) of Section 6.01(c) is
amended and restated in its entirety to read as follows:

     

    “(i) Such Borrower shall fail to
perform or observe any term, covenant or agreement contained in Section 5.01(a),
5.01(i)(iii), 5.01(j) or 5.02 (other than 5.02(f)), or”.

    

    (h) The word
“or” is inserted at the end of Section 6.01(h), and the following new
subsections (i) through (k) are inserted following Section 6.01(h):

     

    “(i)           Any
representation or warranty made by such Borrower herein or by such Borrower (or
any of its officers) in connection with this Agreement or any such Related
Document shall prove to have been incorrect in any material respect when made;
or

     

    (j)           An
“Event of Default” under and as defined in any Indenture executed and delivered
in connection with any Bond Letter of Credit issued for the account of such
Borrower shall have occurred and be continuing;”.

     

    (i) The last
paragraph of Section 6.01 is amended and restated in its entirety to read as
follows:

     

    “then,
and in any such event, the Administrative Agent (i) shall at the request, or may
with the consent, of the Required Lenders, by notice to such Borrower, declare
the obligation of each Lender to make Extensions of Credit to such Borrower to
be terminated, whereupon the same shall forthwith terminate; (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to such
Borrower, declare the outstanding Borrowings of such Borrower, all interest
thereon and all other amounts payable under this Agreement by such Borrower to
be forthwith due and payable, whereupon the outstanding Borrowings of such
Borrower, all such interest and all such amounts shall become and be forthwith
due and payable by such Borrower, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by such
Borrower; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to any Borrower under the Federal Bankruptcy
Code, (A) the obligation of each Lender to make Extensions of Credit to such
Borrower shall automatically be terminated and (B) the outstanding Borrowings to
such Borrower, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by such Borrower; (iii) shall
at the request, or may with the consent, of the Required Lenders by notice to
the such Borrower, give notice of the occurrence of an Event of Default to the
Trustee for each series of Bonds supported by a Bond Letter of Credit issued for
the account of such Borrower and instruct such Trustee either to accelerate such
Bonds, thereby causing such Bond Letter of Credit to expire thereafter, per the
terms of such Bond Letter of Credit, or to effect a mandatory tender of such
Bonds; or (iv) pursue any rights and remedies on behalf of the Lenders and the
applicable LC Issuing Bank that the Administrative Agent may have under the
Related Documents executed and delivered in connection with any Bond Letter of
Credit issued for the account of such Borrower.”.

     

    (j) Each
reference in Sections 7.01 through 7.03 and 7.05 to “this Agreement”, “hereof”
and words of like import referring to the Credit Agreement shall be and include
a reference to “the Related Documents”.

     

    (k) Clause
(i) of Section 8.01 is amended and restated in its entirety to read as
follows:

     

    “(i)
amend Section 3.01, 3.02, 3.03 or 3.04 or waive any of the conditions specified
therein,”.

     

    SECTION
2. Conditions
Precedent.  Section 1 of this Amendment shall not become
effective until the date (the “Effective
Date”) on which the following conditions have been
satisfied:

     

    (a) The
Administrative Agent shall have received counterparts of this Amendment, duly
executed by each Borrower, each LC Issuing Bank and the Required
Lenders.

     

    (b) the
Administrative Agent shall have received on or before the Effective Date the
following, each dated such day, in form and substance reasonably satisfactory to
the Administrative Agent in sufficient copies for each Lender:

     

    (i) Certified
copies of the resolutions of the board of directors of each Borrower authorizing
this Amendment, and of all documents evidencing other necessary corporate action
and Governmental Approvals, if any, with respect to this Amendment.

     

    (ii) A
certificate of the Secretary or Assistant Secretary of each Borrower certifying
the names and true signatures of the officers of such Borrower authorized to
sign this Amendment, and the other documents to be delivered by such Borrower
hereunder.

     

    (iii) A
favorable opinion of counsel for the Borrowers (which may be an attorney of
American Electric Power Service Corporation), substantially in the form of
Exhibit A hereto and as to such other matters as any Lender through the
Administrative Agent may reasonably request.

     

    (c) On such
date, the following statements shall be true and the Administrative Agent shall
have received for the account of each Lender a certificate signed by a duly
authorized officer of each Borrower, dated such date, stating that:

     

    (i) The
representations and warranties of all Borrowers contained in Section 3 hereof
are true and correct in all material respects on and as of such date, as though
made on and as of such date.

     

    (ii) No Event
of Default has occurred and is continuing or would result from the execution and
delivery by each Borrower of this Amendment.

     

    SECTION
3. Representations
and Warranties.  Each Borrower hereby represents and warrants
that the representations and warranties made by it in Sections 4.01(a) through
(d) (with each reference therein to “this Agreement”, “hereunder” and words of
like import referring to the Credit Agreement being deemed to be a reference to
this Amendment and the Credit Agreement, as amended hereby) are true and connect
on and as of the date hereof as though made on and as of such date.

     

    SECTION
4.  Effect on
the Credit Agreement.  The execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of any LC Issuing Bank, any Lender or the Administrative Agent
under the Credit Agreement, nor constitute a waiver of any provision of any of
the Credit Agreement.  Except as expressly amended above, the Credit
Agreement is and shall continue to be in full force and effect and is hereby in
all respects ratified and confirmed.  This Amendment shall be binding
on the parties hereto and their respective successors and permitted assigns
under the Credit Agreement, as amended hereby.

     

    SECTION
5. Costs, Expenses
and Taxes.  AEP agrees to pay promptly upon demand all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Amendment and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent with respect thereto and with
respect to advising the Administrative Agent as to its rights and
responsibilities under this Amendment.  AEP further agrees to pay
promptly upon demand all costs and expenses of the Administrative Agent and the
Lenders, if any (including, without limitation, counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Amendment and the other documents to be delivered
hereunder, including, without limitation, reasonable fees and expenses of
counsel for the Administrative Agent and the Lenders in connection with the
enforcement of rights under this Section 5.

     

    SECTION
6. Counterparts.  This
Amendment may be executed in any number of counterparts and by any combination
of the parties hereto in separate counterparts, each of which counterparts shall
constitute an original, and all of which taken together shall constitute one and
the same instrument.

     

    SECTION
7. Governing
Law.  This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

    

    AEP TEXAS
CENTRAL COMPANY

    AEP TEXAS
NORTH COMPANY

    AMERICAN
ELECTRIC POWER COMPANY, INC.

    APPALACHIAN
POWER COMPANY

    COLUMBUS
SOUTHERN POWER COMPANY

    INDIANA
MICHIGAN POWER COMPANY

    KENTUCKY
POWER COMPANY

    OHIO
POWER COMPANY

    PUBLIC
SERVICE COMPANY OF OKLAHOMA

    SOUTHWESTERN
ELECTRIC POWER

           COMPANY

    

    

    By 
 /s/  Renee
V.
Hawkins                             
                                                                           

    Name:  Renee
V. Hawkins

    Title:    Assistant
Treasurer

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    BARCLAYS
BANK PLC

    

    

    By  /s/  Gary
B.
Wenslow              
                                                                    

     Name:  Gary
B. Wenslow

     Title:    Associate
Director

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Name of
Lender:  BNP PARIBAS

    

    

    By  /s/  Denis
O’Meara                    
                                                                    

     Name:  Denis
O’Meara

     Title:    Managing
Director

    

    

    By  /s/  Ravina
Advani                       
                                                                    

     Name:  Ravina
Advani

     Title:    Vice
President

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              Name
      of Lender:  CALYON NEW YORK
BRANCH

            

    

    

    

    
      	
               

            	
              By  /s/  Darrell
      Stanley                          
      

            

    

    
      	
               
      

            	
              Name:  Darrell
      Stanley

            

    

    
      	
               
      

            	
              Title:    Managing
      Director

            

    

    

    

    
      	
               

            	By /s/ Sharada
      Manne                 
      

    

    
      	
               
      

            	
              Name:  Sharada
      Manne

            

    

    
      	
               
      

            	
              Title:    Director

            

    

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              Name
      of Lender:  CITIBANK,
N.A.

            

    

    

    

    
      	
               
      

            	
               

            	By /s/ Todd
      Davis                            
      

    

    
      	
               
      

            	
              Name:  Todd
      Davis

            

    

    
      	
               
      

            	
              Title:    Vice
      President

            

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              CREDIT
      SUISSE, CAYMAN ISLANDS BRANCH

            

    

    

    

    
      	
               

            	By /s/ Brian
      Caldwell                   
      

    

    
      	
               
      

            	
              Name:  Brian
      Caldwell

            

    

    
      	
               
      

            	
              Title:    Director

            

    

    

    

    
      	
               
      

            	
               

            	By /s/ Nupur
      Kumar                  
      

    

    
      	
               
      

            	
              Name:  Nupur
      Kumar

            

    

    
      	
               
      

            	
              Title:    Associate

            

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
                                          Name of
      Lender:  JPMORGAN CHASE BANK, N.A.

               

                                          By  /s/  Michael J.
      DeForge               
      

                                            
      Name:  Michael J. DeForge

                                            
      Title:    Executive
Director

            

    

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              Name
      of Lender:  Key Bank National
  Association

            

    

    

    

    
      	
               

            	By /s/ Sherrie I.
      Manson                     
      

    

    
      	
               
      

            	
              Name:  Sherrie
      I. Manson

            

    

    
      	
               
      

            	
              Title:    Senior
      Vice President

            

    

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              Name
      of Lender:  LEHMAN BROTHERS BANK,
FSB

            

    

    

    

    
      	
               

            	By /s/ Janice M.
      Shugan                    
      

    

    
      	
               
      

            	
              Name:  Janice
      M. Shugan

            

    

    
      	
               
      

            	
              Title:    Authorized
      Signatory

            

    

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              Name
      of Lender:  MERRILL LYNCH BANK
USA

            

    

    

    

    
      	
               

            	By  /s/ Louis
      Alder                             
      

    

    
      	
               
      

            	
               Name:  Louis
      Alder

            

    

    
      	
               
      

            	
               Title:    First
      Vice President

            

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              SUNTRUST
      BANK

            

    

    

    

    
      	
               
      

            	
               

            	By /s/ Yann
      Pirio                              
      

    

    
      	
               
      

            	
              Name:  Yann
      Pirio

            

    

    
      	
               
      

            	
              Title:     Director

            

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Name of
Lender:

    
      	
               
      

            	
              THE
      BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
  BRANCH

            

    

    

    

    
      	
               

            	By /s/ Chi-Cheng
      Chen                           
      

    

    
      	
               
      

            	
              Name:  Chi-Cheng
      Chen

            

    

                                
Title:    Authorized Signatory

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               
      

            	
              THE
      NORTHERN TRUST COMPANY

            

    

    

     

    
      	
               

            	By /s/ Jeffrey P.
      Sullivan                           
      

    

    
      	
               
      

            	
              Name:  Jeffrey
      P. Sullivan

            

    

    
      	
               
      

            	
              Title:    Vice
      President

            

    

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
                                          THE
      ROYAL BANK OF SCOTLAND PLC

               

               

                                          By  /s/  Emily
      Freedman                        
                                                                                 

                                          Name:  Emily
      Freedman

                                          Title:    Vice
      President

            

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      	
                                          UBS
      LOAN FINANCE LLC

               

               

                                          By  /s/  Mary E.
      Evans                        
      

                                            
      Name:  Mary E. Evans

                                            
      Title:    Associate Director

               

               

                                          By  /s/  Irja R.
      Otsa                           
      

                                            Name:  Irja R.
      Otsa

                                              
      Title:    Associate Director

               

            

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
               
      

            	
              U.S.
      BANK, N.A.

            

    

    

    

    
      	
               
      

            	
               

            	By /s/ Eric J.
      Cosgrove                          
      

    

    
      	
               
      

            	
              Name:  Eric
      J. Cosgrove

            

    

     Title:    Vice
President

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Name of
Lender:  WACHOVIA BANK, N.A.

    

    

     By  /s/  Henry
R.
Biedrzycki                       
                                                                           

    Name:  Henry
R. Biedrzycki

    Title:    Director

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
                                          Name of
      Lender:  WILLIAM STREET LLC

               

               

                                          By  /s/  Mark
      Walton                                
                                                                                 

                                          Name:  Mark
      Walton

                                          Title:    Authorized
      SignatorySecond Amendment

EXHIBIT 10.1

SECOND AMENDMENT TO

CREDIT AGREEMENT

				
	
             THIS
SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of
the 28th day of October, 2008, between ATLANTIC AMERICAN CORPORATION, a Georgia
corporation (the “Borrower”) and WACHOVIA BANK, NATIONAL ASSOCIATION
(the “Bank”). 

Recitals:

				
	
             The
Borrower and the Bank have entered into that certain Credit Agreement dated as
of December 22, 2006 as amended by that certain First Amendment to Credit
Agreement and Pledge Agreement dated March 28, 2008 (as so amended the
“Credit Agreement”). The Borrower and the Bank desire (a) to
provide for an acknowledgement and consent to a certain redemption of
Borrower’s Series B Preferred Stock and the payment of a dividend in
connection therewith, and (b) to amend the Credit Agreement in respect
thereof, as hereinafter provided. 
	

             NOW,
THEREFORE, in consideration of the Recitals and the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Bank,
intending to be legally bound hereby, agree as follows: 
	

             SECTION 1.    
Recitals.  The Recitals  are  incorporated  herein by reference  and shall be deemed to be a part
of this Amendment.
	
             SECTION 2.    
Definitions.  Capitalized  terms used herein which are not  otherwise  defined  herein shall have
the respective meanings assigned to them in the Credit Agreement.
	
             SECTION 3.    
Acknowledgement and Consent.
	 	
                  (a)       The Borrower has requested  that the Bank consent to, and subject to the  conditions  stated  herein,  the
         Bank does hereby consent to, the  Borrower's  intention to (a) redeem all shares of its Series B Preferred
         Stock (the  "Planned  Redemption")  at par value for an amount  not to exceed  $13,400,000  (the  "Planned
         Redemption  Limit") and pay a dividend in connection  therewith (the "Planned  Dividend") in an amount not
         to exceed  $1,675,000  (the "Planned  Dividend  Limit").  Pursuant to Section 5.12 of the  Agreement,  the
         Borrower is  currently  prohibited  from  making a  redemption  of the nature of the  Planned  Redemption.
         Pursuant to 5.06 of the Agreement,  the Borrower is currently  prohibited from making a Restricted Payment
         of the nature of the Planned Dividend.

	 	
                  (b)       The Bank  expressly  reserves all of its rights and remedies with respect to any present or future Default
         arising under the Credit Agreement.

	

             SECTION 4.    
Amendments to Credit Agreement.  The Credit Agreement is amended as set forth in this
Section 4. 

				
	 	
                  (a)        New Definitions.   Article  I of the  Credit  Agreement  is  hereby  amended  to  add  the  following  new
definitions in alpha order:

	 	
             Planned
Dividend” has the meaning ascribed to such term in the second Amendment to
Credit Agreement between the Borrower and the Bank dated as of October 28, 2008
(the “Second Amendment”). 
	 	
             
"Planned Dividend Limit" has the meaning ascribed to such term in the Second Amendment.
	 	
             
"Planned Redemption" has the meaning ascribed to such term in the Second Amendment.
	 	
             
"Planned Redemption Limit” has the meaning ascribed to such term in the Second
Amendment. 
	 	
                  (b)       Amendment to Section  5.06.   Section 5.06 of the Credit  Agreement is hereby  amended and restated in its
entirety to read as follows:

	 	
                              Section
5.06 Restricted Payments    The Borrower will not declare or make any
Restricted Payment during any Fiscal Year; provided that: (1) the Borrower may
redeem shares of the Borrower’s capital stock for the purpose of satisfying
the Borrower’s obligations under its 401K plan and stock options provided
by the Borrower to its executive officers, in the ordinary course of business
and consistent with practices existing on the Closing Date; (2) the total
number of shares of the Borrower’s capital stock redeemed pursuant to the
preceding subsection (1) shall not exceed five hundred thousand in the aggregate
in any Fiscal Year; and (3) the aggregate amount expended by the Borrower in
connection with the redemptions made pursuant to the preceding subsection (1)
shall not exceed $2,000,000 in the aggregate in any Fiscal Year; and provided
further that the Borrower may make Restricted Payments on or in connection with
the Series D Preferred Stock, so long as, (a) the dividend rate payable on such
Series D Preferred Stock shall not exceed seven and one quarter of one percent
(7.25%) per annum, (b) the redemption value of the Series D Preferred Stock
shall not be greater than $1,000,000 per Fiscal Year, and (c) no Event of
Default shall be in existence or shall result from the making of such Restricted
Payment; provided that the making of the Planned Dividend in an amount
not to exceed the Planned Dividend Limit shall not be prohibited by this
Section. 

	 	
                  (c)       Amendment to Section  5.12.   Section  5.12 of the Credit  Agreement  hereby  amended and  restated in its
entirety to read as follows:

-2-

				
	 	
                              Section
5.12 Dissolution.    Neither the Borrower nor any of its Subsidiaries shall
suffer or permit dissolution or liquidation either in whole or in part or redeem
or retire any shares of its own stock or that of any Subsidiary, except through
corporate reorganization to the extent permitted by Section 5.13 or as
permitted in Section 5.11; provided that the making of the Planned
Redemption in an amount not to exceed the Planned Redemption Limit shall not be
prohibited by this Section.

	

             SECTION 5.    
No Other Amendment.   Except for the amendments set forth above, the text of the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment is
not intended to effect, nor shall it be construed as, a novation. The Credit
Agreement and this Amendment shall be construed together as a single instrument
and any reference to the “Agreement” or any other defined term for the
Credit Agreement in the Credit Agreement, the Loan Documents or any certificate,
instrument or other document delivered pursuant thereto shall mean the Credit
Agreement as amended hereby and as it may be amended, supplemented or otherwise
modified hereafter. Nothing herein contained shall waive, annul, vary or affect
any provision, condition, covenant or agreement contained in the Credit
Agreement, except as herein amended, or any of the other Loan Documents nor
affect nor impair any rights, powers or remedies under the Credit Agreement, as
hereby amended or any of the other Loan Documents. The Bank does hereby reserve
all of its rights and remedies against all parties who may be or may hereafter
become secondarily liable for the repayment of the Obligations. The Borrower
promises and agrees to perform all of the requirements, conditions, agreements
and obligations under the terms of the Credit Agreement, as hereby amended, and
the other Loan Documents. The Credit Agreement, as amended, and the other Loan
Documents are hereby ratified and affirmed. The Borrower hereby expressly agrees
that the Credit Agreement, as amended, and the other Loan Documents are in full
force and effect. 
	

             SECTION 6.    
Representations and Warranties.  The Borrower hereby represents and
warrants in favor of the Bank as follows: 
	 	
                  (a)      The  representations  and warranties of the Borrower  contained in Article IV of the Credit  Agreement are
         true  in all  material  respects  on and as of the  date  hereof  (except  to the  extent  they  are  made
         specifically  with  reference to some other date, in which case they are true and correct as of such other
         date);

	 	
                  (b)      After giving  effect to this  Amendment,  no Default or Event of Default under the Credit  Agreement,  the
         Pledge Agreement or any other Loan Document has occurred and is continuing on the date hereof;

	 	
                  (c)      The Borrower has the  corporate  power and  authority to enter into this  Amendment and to do all acts and
         things as are required or contemplated hereunder to be done, observed and performed by it;

	 	
                  (d)      This  Amendment  has been duly  authorized,  validly  executed  and  delivered  by one or more  authorized
         officers of the  Borrower,  and this  Amendment,  the Credit  Agreement and Pledge  Agreement,  as amended
         hereby,  constitute the legal,  valid and binding  obligations of the Borrower  enforceable  against it in
         accordance with their terms; and

-3-

				
	 	
                  (e)      Neither the execution and delivery of this Amendment,  the Borrower's  performance hereunder and under the
         Credit Agreement,  as amended hereby,  the making of the Planned  Dividend,  nor the making of the Planned
         Redemption  require the consent or approval of any  regulatory  authority  or  governmental  authority  or
         agency having  jurisdiction  over the Borrower other than those which have already been obtained or given,
         nor will the aforesaid  actions be in  contravention  of or in conflict with the Articles of Incorporation
         or Bylaws  of the  Borrower,  or the  provision  of any  statute,  or any  judgment,  order or  indenture,
         instrument,  agreement  or  undertaking,  to which  the  Borrower  is a party or by which  its  assets  or
         properties are or may become bound.

	

             SECTION 7.    
Conditions to Effectiveness.  The effectiveness of this Amendment and the obligations of
the Bank hereunder are subject to the following conditions, unless the Bank
waives such conditions: 
	 	
                  (a)      receipt by the Bank from the Borrower of a duly executed counterpart of this Amendment; and

	 	
                  (b)      the fact  that  the  representations  and  warranties  of the  Borrower  contained  in  Section  7 of this
         Amendment shall be true on and as of the date hereof.

	

             SECTION 8.    
Counterparts.  This Amendment may be executed in multiple counterparts,
each of which shall be deemed to be an original and all of which, taken
together, shall constitute one and the same agreement.
	

             SECTION 9.    
Governing Law.  This Amendment shall be construed in accordance with and governed by
the laws of the State of Georgia.
	

             SECTION 10.    
Attorney's Fees and Expenses.  The Borrower hereby agrees that all
attorney’s fees and expenses incurred by the Bank in connection with the
preparation, negotiation and execution of this Amendment shall be payable by the
Borrower. 

 [Remainder of page intentionally left blank]

-4-

             IN
WITNESS WHEREOF, the parties hereto have executed and delivered, or have caused
their respective duly authorized officers or representatives to execute and
deliver, this Amendment as of the day and year first above written.

	ATTEST:	ATLANTIC AMERICAN CORPORATION
	 
	                        
/s/  John G. Sample, Jr.
  
                           	By:          
         /s/  John G. Sample, Jr.     
                   (SEAL)
	          
                    
John G. Sample, Jr.                       
        , Acting Secretary	       Name:          
          John G. Sample, Jr.             
           
	          
     
        [CORPORATE SEAL]	
       Title:  Senior Vice President and Chief Financial Officer

	 
	 	WACHOVIA BANK, NATIONAL
ASSOCIATION
	 
	 	By:
                     /s/  
Ron Edwards            (SEAL)
	 	     
Name:                      
Ron Edwards               
                

	 	     
Title:          
SVP/Commerical Risk Management         

	 

 Signature Page to

Second Amendment to Credit Agreement

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