SECOND AMENDMENT
THIS SECOND AMENDMENT (the "Amendment"), to the Credit Agreement
referred to below is entered into as of the 21st day of July, 1999, 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 amended by the First Amendment
dated March 19, 1999 and as further amended, restated, supplemented or otherwise
modified 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 of the Credit Agreement is hereby amended by
deleting the definitions of "Alternative Currency" and "Alternative
Currency Commitment" in their entirety and by substituting therefor the
following:
"Alternative Currency" means Pounds Sterling, the
euro or Canadian Dollars, and, with the prior written consent
of the Administrative Agent and each of the Lenders, any other
lawful currency (other than Dollars) which is freely
transferable and convertible into Dollars in the United States
currency market and freely available to all of the Lenders in
the London interbank deposit market.
"Alternative Currency Commitment" means Fifty Million
Dollars ($50,000,000), as such amount may be reduced or
modified at any time or from time to time pursuant to the
terms hereof, provided that only up to Twenty Million Dollars
($20,000,000) of the Alternative Currency Loans made under the
Alternative Currency Commitment may at any time be denominated
in Canadian Dollars.
(b) Section 1.1 of the Credit Agreement is hereby amended by
deleting the definition of "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, and the ownership
of the debt of entities which own real property, and (iii)
which does not engage in any real estate development
activities for its own account.
(c) Section 1.1 of the Credit Agreement is hereby amended by
deleting the definition of "Debt" in its entirety and inserting the
following in lieu thereof:
"Debt" means, with respect to the Borrower and its
Subsidiaries at any date and without duplication, the sum of
the following calculated in accordance with GAAP: (a) all Debt
for Money Borrowed, (b) all obligations to pay the deferred
purchase price of property or services of any such Person,
except trade payables arising in the ordinary course of
business not more than ninety (90) days past due, (c) all Debt
of any Person secured by a Lien on any asset of the Borrower
and its Restricted Subsidiaries, (d) all Contingent
Obligations of any such Person with respect to Debt, (e) Debt
in the form of earn-out obligations to be paid in cash to the
extent such earn-out obligations have been incurred and are
required to be included on a Consolidated balance sheet of the
Borrower and its Restricted Subsidiaries prepared in
accordance with GAAP and (f) all net obligations incurred by
any such Person pursuant to Hedging Agreements.
Notwithstanding the foregoing, there shall be excluded from
the definition of Debt: (a) all obligations for the deferred
purchase price of property to the extent the obligation of the
Borrower or any of its Subsidiaries is secured by cash
deposits access to which is restricted to the seller of such
property, or any third party guarantor, or any of their
respective successors and assigns; (b) Debt incurred in
connection with an arbitrage loan facility between the
Borrower and Xxxxx Fargo Bank in an amount not to exceed
$20,000,000, to the extent the obligation of the Borrower to
repay advances under such loan facility is collateralized at
all times by cash or Cash Equivalents; and (c) guarantee
obligations of the Borrower of up to $10,000,000 on account of
Debt of First Ohio Mortgage Corporation, Inc or any other
Unrestricted Subsidiary with respect to lines of credit, the
proceeds of which are used solely to fund mortgage loans.
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(d) Section 1.1 of the Credit Agreement is hereby amended by
deleting the definition of "L/C Commitment" in its entirety and by
substituting the following in lieu thereof:
""L/C Commitment" means the lesser of (a) Twenty
Million Dollars ($20,000,000) or (b) the Aggregate
Commitment."
(e) Section 1.1 of the Credit Agreement is hereby amended by
adding the following definition of "Cash Equivalents": in alphabetical
order:
"Cash Equivalents" means investments of the type
permitted pursuant to Section 10.4(b).
(f) Section 9.3 of the Credit Agreement is hereby amended by
deleting such section in its entirety and by substituting the following
in lieu thereof:
"SECTION 9.3 Maximum Leverage. Permit, as of any
fiscal quarter end, the ratio of (a) Total Debt as of such
fiscal quarter end to (b) Total Capitalization as of such
fiscal quarter end to exceed .4 to 1.00."
(g) Section 10.4(e) of the Credit Agreement is hereby amended
by deleting such section in its entirety and inserting the following in
lieu thereof:
(e) investments in or loans to Unrestricted
Subsidiaries, provided that the aggregate amount of such loans
and investments, together with all Contingent Obligations of
the Borrower and its Restricted Subsidiaries on account of
Debt of Unrestricted Subsidiaries shall at no time exceed an
amount equal to twenty percent (20%) of the Consolidated Net
Worth of the Borrower and its Subsidiaries;
(h) Section 10.7(d) of the Credit Agreement is hereby amended
by deleting such section in its entirety and inserting the following in
lieu thereof:
(d) during such time as no Default or Event of
Default shall have occurred and be continuing or would result
therefrom, the Borrower may purchase, redeem or otherwise
acquire (by way of open market purchases, tender offers and/or
put agreements) shares of the capital stock of the Borrower;
provided, that the aggregate amount spent by the Borrower on
account of such purchases, redemptions and other acquisitions
shall not exceed an amount equal to the sum of (i) $17,500,000
plus (ii) twenty-five percent (25%) of the Net Cash Proceeds
of any equity issuance by the Borrower subsequent to the
Closing Date (other than the issuance of capital stock
pursuant to the Borrower's executive stock purchase program)
plus (iii) fifty percent (50%) of the amount realized by the
Borrower from the
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exercise subsequent to the Closing Date by third Persons of stock options
granted by the Borrower.
II. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Agents and Lenders that:
(a) The execution and delivery of this Amendment by the
Borrower 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 agreement to which the Borrower is a party or by which
its assets are bound. The Credit Agreement, as amended and modified by
this Amendment, and the other Loan Documents, constitute legal, valid
and binding obligations of the Borrower, 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.
(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.
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(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.
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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.
INSIGNIA FINANCIAL GROUP, INC.
(formerly known as Insignia/ESG Holdings, Inc.)
By: /s/Xxxxx X. Aston
-------------------------------------------
Name: Xxxxx X. Aston
Title: Chief Financial Officer
FIRST UNION NATIONAL BANK, as
Administrative Agent and Lender
By: /s/Xxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior XX
XXXXXX COMMERCIAL PAPER INC., as
Syndication Agent and Lender
By: /s/Xxxxxxx Xxxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Exec. VP
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XXX XXXX XX XXX XXXX
By: /s/Xxxxxxx Xxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
BARCLAYS BANK PLC
By: /s/Xxxxxxx Xxxx
-------------------------------------------
Name: Xxxxxxx Xxxx
Title: Associate Director
LASALLE NATIONAL BANK
By: /s/Xxxxx Xxxx Xxx
-------------------------------------------
Name: Xxxxx Xxxx Xxx
Title: Commercial Banking Officer
NATIONAL CITY BANK
By: /s/Xxxxxx X. Wacshaw
-------------------------------------------
Name: Xxxxxx X. Wacshaw
Title: Vice President
NATIONSBANK, N.A.
By: /s/Xxx X. Xxxxxxxx
-------------------------------------------
Name: Xxx X. Xxxxxxxx
Title: Vice President
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