FOURTH AMENDMENT
THIS FOURTH AMENDMENT (the "Amendment") to the Credit Agreement
referred to below is entered into as of the 15th day of March, 2001, by and
among INSIGNIA FINANCIAL GROUP, INC. (FORMERLY KNOWN AS "INSIGNIA/ESG HOLDINGS,
INC."), a corporation organized under the laws of Delaware (the "Borrower"), THE
LENDERS SIGNATORY HERETO (collectively, the "Lenders"), FIRST UNION NATIONAL
BANK, as Administrative Agent, and XXXXXX COMMERCIAL PAPER INC., as Syndication
Agent (collectively, the "Agents").
STATEMENT OF PURPOSE
The Borrower, the Lenders and the Agents are parties to a certain
Credit Agreement dated as of October 22, 1998, as heretofore amended by the
First Amendment dated March 19, 1999, by the Second Amendment dated July 21,
1999 and by the Third Amendment dated August 25, 2000 (as so amended, the
"Credit Agreement"), pursuant to which the Lenders have agreed to make, and have
made, certain Extensions of Credit to the Borrower.
The Borrower has requested the Lenders to amend the Credit Agreement in
the respects provided in this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto hereby agree as follows:
I. AMENDMENT OF CREDIT AGREEMENT.
-----------------------------
(a) Section 1.1 is hereby amended in the following
respects:
(i) By deleting the defined terms "Controlled
Co-Investment Entities" and "Uncontrolled Co-Investment
Entities."
(ii) By deleting the defined term "Co-Investment
Entity" in its entirety and inserting the following in lieu
thereof:
"Co-Investment Entity" means any
corporation, limited liability company, partnership
or other form of entity (i) in which the Borrower or
a Subsidiary of the Borrower owns an equity interest
pursuant to a joint venture or similar arrangement
with one or more Persons who own more than fifty
percent (50%) of the ownership or other equity
interests in such entity, (ii) which has as its sole
business the ownership of real property, the
rendering of services and furnishing of products
customarily provided by landlords, or the ownership
of the debt (including the securitization of such
debt) of entities which own real property, and (iii)
which does not engage in any real estate development
activities for its own account.
(b) Section 4.1(c)is hereby amended by deleting the first
paragraph of such section in its entirety and inserting the following
in lieu thereof:
(c) Applicable Margin. The Applicable Margin provided
for in Section 4.1(a) with respect to the Loans (the
"Applicable Margin") shall be determined by reference to the
Leverage Ratio in accordance with the following chart:
Applicable Margin Per Annum
Level Leverage Ratio LIBOR + Base Rate +
I Greater than 2.25 to 1.00 2.50% 1.00%
II Equal to or less than 2.25% .75%
2.25 to 1.00 but greater
than 1.50 to 1.00
III Equal to or less than 2.00% .50%
1.50 to 1.00
(c) Section 4.3(a) is hereby amended by deleting the second
paragraph thereof in its entirety and inserting the following in lieu
thereof:
The Commitment Fee Rate provided for above shall
equal the percentage set forth below corresponding to the
Level at which the Applicable Margin is determined in
accordance with Section 4.1(c). Any change in the applicable
Level at which the Applicable Margin is determined shall
result in a corresponding and simultaneous change in the
Commitment Fee Rate.
Level Commitment Fee Rate
I 0.500%
II 0.500%
III 0.375%
(d) Section 10.4 is hereby amended by deleting the same in its
entirety and inserting the following in lieu thereof:
SECTION 10.4 Limitations on Loans, Advances,
Investments and Acquisitions. Purchase, own, invest in or
otherwise acquire, directly or indirectly, any capital stock,
interests in any partnership or joint venture, evidence of
Debt or other obligation or security, substantially all or a
portion of the business or assets of any other Person or any
other
2
investment or interest whatsoever in any other Person, or make
or permit to exist, directly or indirectly, any loans,
advances or extensions of credit to, or any investment in cash
or by delivery of property in, any Person, or enter into,
directly or indirectly, any commitment or option in respect of
the foregoing except:
(a) investments in Unrestricted Subsidiaries
and Affiliates existing on the date of the Fourth
Amendment to this Credit Agreement and the other
existing loans, advances and investments described on
Schedule 10.4;
(b) investments in (i) marketable direct
obligations issued or unconditionally guaranteed by
the United States of America or any agency thereof
maturing within 120 days from the date of acquisition
thereof, (ii) marketable direct obligations issued by
any State of the United States or any political
subdivision of any such State or any public
instrumentality thereof maturing within 120 days from
the date of acquisition thereof and, at the time of
acquisition, having the highest or second highest
rating obtainable from S&P or Xxxxx'x; (iii)
commercial paper maturing within 120 days from the
date of the acquisition thereof, and, at the time of
acquisition, having a rating of A-1 or higher by S&P
or P-1 or higher by Xxxxx'x, (iv) certificates of
deposit maturing no more than 120 days from the date
of creation thereof issued by commercial banks
incorporated or licensed under the laws of the United
States of America, each having combined capital,
surplus and undivided profits of not less than
$500,000,000 and having a rating of A or better by a
nationally recognized rating agency; (v) time
deposits maturing no more than 30 days from the date
of creation thereof with commercial banks or savings
banks or savings and loan associations each having
membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance
thereunder; (vi) eligible bankers' acceptances,
repurchase agreements and tax-exempt municipal bonds
having a maturity of less than one year and in each
case having a rating, or being the full recourse
obligation of a Person whose senior debt rating has a
rating, of A or higher by S&P or Xxxxx'x; or (vii)
any money market fund organized under the laws of the
United States or any State thereof;
(c) investments in the form of acquisitions
of all or substantially all of the business or a line
of business (whether by the acquisition of capital
stock or other ownership interest, assets or any
combination thereof) of any other Person (or
investments, including loans and deposits, in
anticipation thereof), if (i) no
3
Default or Event of Default then exists or would be
created thereby, (ii) the Borrower has delivered to
the Agents and the Lenders a certificate of the Chief
Financial Officer or Treasurer of the Borrower (on
behalf of the Borrower) demonstrating pro forma
compliance with the covenants contained in Article IX
both before and after giving effect to such
acquisition, and (iii) any acquired Person is, in the
reasonable opinion of the Borrower, in a similar or
complementary line of business to that of the
Borrower or any of its Restricted Subsidiaries;
(d) investments in or loans to Restricted
Subsidiaries;
(e) investments in or loans to Unrestricted
Subsidiaries not engaged in real estate development
activities for their own account, provided that the
aggregate amount of such investments and loans,
together with all Contingent Obligations of the
Borrower and its Restricted Subsidiaries on account
of Debt of such Unrestricted Subsidiaries, shall at
no time exceed $10,000,000, which amount shall be in
addition to existing loans, advances and investments
described on Schedule 10.4;
(f) (i) loans to officers and directors of
the Borrower and its Restricted Subsidiaries to
finance the purchase of newly issued capital stock of
the Borrower pursuant to its executive stock purchase
program and (ii) other loans to executive officers
and directors not to exceed (in the case of this
clause (ii)) an aggregate of $5,000,000 at any time
outstanding; and
(g) investments in or loans to (i)
Co-Investment Entities and (ii) Unrestricted
Subsidiaries engaged in real estate development
activities for their own account (herein, "Real
Estate Unrestricted Subsidiaries"), provided that the
aggregate amount of such investments and loans under
this subsection (g), together with all Contingent
Obligations of the Borrower and its Restricted
Subsidiaries on account of Debt of Co-Investment
Entities and Real Estate Unrestricted Subsidiaries,
shall at no time exceed an aggregate of $100,000,000
plus gains and minus losses actually realized from
such investments and loans); and provided further
that, the aggregate of all loans to and investments
in and Contingent Obligations on account of the Debt
of Real Estate Unrestricted Subsidiaries shall at no
time exceed an aggregate of $35,000,000 (plus gains
and minus losses actually realized from such
investments and loans) plus amounts available but
unused for investments or loans under Section
10.4(e). (Amounts committed to capital calls shall
not be deemed to have been invested where the
Borrower has the sole
4
power to make the capital call and the call has not
in fact been made.)
(e) Schedule 10.4 to the Credit Agreement is deleted
in its entirety and the new Schedule 10.4 attached hereto is
inserted in lieu thereof.
II. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Agents and the Lenders that:
(a) The execution and delivery of this Amendment by the
Borrower and the Subsidiary Guarantors and the performance of the
Credit Agreement, as amended and modified by this Amendment, and the
other Loan Documents, do not and will not violate any law, rule or
regulation, or constitute a breach of the Articles of Incorporation,
Bylaws or corporate resolutions of the Borrower or any Subsidiary
Guarantor or any agreement to which the Borrower or any Subsidiary
Guarantor is a party or by which its or their assets are bound. The
Borrower and each of the Subsidiary Guarantors has the power and
authority and has taken all necessary action to authorize the
execution, delivery and performance of this Amendment. The Credit
Agreement, as amended and modified by this Amendment, and the other
Loan Documents, constitute legal, valid and binding obligations of the
Borrower and the Subsidiary Guarantors, enforceable in accordance with
their respective terms.
(b) The representations and warranties of the Borrower and its
Subsidiaries contained in Article VI of the Credit Agreement and in the
other Loan Documents are true and correct in all material respects on
and as of the date of this Amendment with the same effect as if made on
and as of such date, except to the extent that such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties were true and correct in all material
respects on and as of such earlier date).
(c) No Default or Event of Default exists.
III. GENERAL PROVISIONS.
(a) Limited Amendment. Except as otherwise provided herein, the Credit
Agreement and each other Loan Document shall continue to be, and shall remain,
in full force and effect. This Amendment shall not be deemed (i) to be a waiver
of, or consent to, or a modification or amendment of, any other term or
condition of the Credit Agreement or of any other term or condition of the other
Loan Documents or (ii) to prejudice any other right or rights which the Agents
or any Lender may now have or may have in the future under or in connection with
the Credit Agreement or the other Loan Documents or any of the instruments or
agreements referred to therein, as the same may be amended or modified from time
to time.
(b) Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
5
(c) Definitions. All capitalized terms used and not defined herein
shall have the meanings given thereto in the Credit Agreement.
(d) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(e) Expenses. All expenses incurred in connection with the preparation
and negotiation of this Amendment and with the fulfillment of the requirements
hereunder shall be borne by the Borrower. If any documentary or recording tax
should be assessed or the affixing of any stamps be required by local, state or
federal governments, the Borrower shall pay the tax and cost of such stamps.
(f) Conflicting Terms. In the event of any conflict or inconsistency
between the terms of this Amendment and the Credit Agreement and the other Loan
Documents, this Amendment shall control.
(g) Cross-References. All references in the Credit Agreement, or in any
other Loan Document, to the terms "Credit Agreement" or "Agreement" or other
similar reference shall be deemed to refer to the Credit Agreement as amended or
modified by this Amendment. In addition, all notices, requests, certificates and
other instruments executed and delivered after the execution and delivery of
this Amendment may refer to the Credit Agreement without making specific
reference to this Amendment, but nevertheless all such references shall include
this amendment of the Credit Agreement unless the context otherwise requires.
(h) Successors and Assigns. Whenever in this Amendment any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party and all covenants, provisions and
agreements by or on behalf of the Borrower which are contained in this Amendment
shall inure to the benefit of the successors and assigns of the Agents and
Lenders.
IV. JOINDER OF THE GUARANTORS. The Subsidiary Guarantors join in the
execution and delivery of this Amendment solely for the purpose of evidencing
their consent thereto, and to acknowledge that the Guaranty Agreement remains in
full force and effect with respect to the Credit Agreement as amended hereby.
[Signature Pages to Follow]
6
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
BORROWER:
INSIGNIA FINANCIAL GROUP, INC.
(formerly known as Insignia/ESG Holdings, Inc.)
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
LENDERS:
FIRST UNION NATIONAL BANK, as
Administrative Agent and Lender
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
XXXXXX COMMERCIAL PAPER INC., as Syndication
Agent and Lender
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
XXXXXX BROTHERS BANKHAUS AG,
LONDON BRANCH
By: /s/ Anil Lonawi
---------------------------------------
Name: Anil Lonawi
Title: Loans Administration
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
BARCLAYS BANK PLC
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxx Xxxx
Title: Associate Director and VP
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NATIONAL CITY BANK
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA, N.A.
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Vice President
GUARANTORS:
XXXXXX XXXXXX XXXXXX & XXXXXX
MANAGEMENT SERVICES, L.L.C.
By: Insignia/ESG, Inc., its manager
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
XXXXXXX XXXXXXX, LLC
By: Insignia Residential Group, Inc.,
Its Managing Member
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
E.S.G. OPERATING CO., INC.
FC&S MANAGEMENT COMPANY
XXXXXX X. XXXXX & COMPANY
IPCG, INC.
INSIGNIA E C CORPORATION
INSIGNIA/ESG CAPITAL CORPORATION
INSIGNIA/ESG, INC.
INSIGNIA/ESG OF COLORADO, INC.
INSIGNIA COMMERCIAL INVESTMENTS GROUP, INC.
INSIGNIA COMMERCIAL MANAGEMENT, INC.
INSIGNIA RO, INC.
INSIGNIA RESIDENTIAL GROUP, INC.
REALTY ONE, INC.
S.I.A., INC.
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
SCHEDULE 10.4
Existing Loans, Advances and Investments
[GRAPHIC OMITTED]
