SECOND AMENDMENT
THIS SECOND AMENDMENT (the "Amendment") to the Credit Agreement referred to
below is entered into as of the 7th day of June, 2002, by and among INSIGNIA
FINANCIAL GROUP, INC., a corporation organized under the laws of Delaware (the
"Borrower"), THE LENDERS SIGNATORY HERETO (collectively, the "Lenders"),
WACHOVIA BANK, NATIONAL ASSOCIATION (F/K/A FIRST UNION NATIONAL BANK), as
Administrative Agent (the "Administrative Agent"), ▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Syndication Agent (the "Syndication Agent"), and BANK OF AMERICA, N.A., as
Documentation Agent (the "Documentation Agent" and, together with the
Administrative Agent and the Syndication Agent, the "Agents").
STATEMENT OF PURPOSE
The Borrower, the Lenders and the Agents are parties to a certain Credit
Agreement dated as of May 4, 2001 (as amended by the First Amendment dated as of
November 26, 2001 and as further amended, restated, supplemented or otherwise
modified from time to time, 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. AMENDMENTS TO THE CREDIT AGREEMENT.
(a) Amendments to Existing Definitions. The definitions of the following
quoted terms which are set forth in Section 1.1 of the Credit Agreement are
hereby amended in their entirety as follows:
"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
(or an interest therein including leasehold interests), 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 (or an interest therein including
leasehold interests), and (iii) which does not engage in any real estate
development activities for its own account.
"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 obligations 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, including any asserted claim
with respect to any Indemnified Matter, (e) obligations in the form of
earn-out obligations to be paid in cash, but only 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, (f) all obligations of any
such Person under Capital Leases, (g) all obligations, contingent or
otherwise, of any such Person relative to the face amount of letters of
credit (including, without limitation, the Letters of Credit), whether or
not drawn, including, without limitation, any reimbursement obligation with
respect thereto (including, without limitation, any Reimbursement
Obligation), (h) all net obligations incurred by any such Person pursuant
to Hedging Agreements and (i) all Disqualified Stock of the Borrower and
its Restricted Subsidiaries valued at its maximum fixed repurchase price.
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) obligations incurred in connection with any
arbitrage loan facility between the Borrower and any Lender or any other
commercial bank organized under, or which has a branch or agency licensed
under, the laws of (i) the United States or any state thereof, (ii) the
United Kingdom of Great Britain and Northern Ireland or (iii) any
participating member state of the European Union (as so described in any
legislative measure of the Council of European Union) in an aggregate
amount not to exceed $50,000,000, to the extent the obligation of the
Borrower to repay advances under such loan facility is fully collateralized
at all times by cash or Cash Equivalents funded with the proceeds of such
loan facility; (c) guarantee obligations of the Borrower of up to
$10,000,000 on account of First Ohio Mortgage Corporation or any other
Unrestricted Subsidiary with respect to lines of credit, the proceeds of
which are used solely to fund mortgage loans; and (d) the obligation for
the deferred purchase price in a transaction which has been identified to
the Lenders as of the date of this Agreement to the extent that the
obligation of the Borrower or any of its Subsidiaries is to be fulfilled by
the transfer of a segregated cash account established or assumed by the
Borrower or any of its Subsidiaries for the purpose of the payment of such
deferred purchase price, in an amount not to exceed $15 million. For
purposes of this definition, the "maximum fixed repurchase price" of any
Disqualified Stock that does not have a fixed repurchase price will be
calculated in accordance with the terms of such Disqualified Stock as if
such Disqualified Stock were repurchased on any date on which Debt is
required to be determined pursuant to this Agreement, and as if such price
is based upon, or measured by, the fair market value of such Disqualified
Stock. For the purposes of this definition, "fair market value" means, with
respect to any asset or property, the price which would be negotiated in an
arm's-length free market transaction, for cash, between an informed willing
seller and an informed willing buyer neither of which is under pressure or
compulsion to sell or buy.
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"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or
other agreement or arrangement designed to protect against fluctuations in
interest rates or currency, commodity or equity values (including, without
limitation, any option with respect to any of the foregoing and any
combination of the foregoing agreements or arrangements), and any
confirmation executed in connection with any such agreement or arrangement,
all as amended or modified.
"Net Income" means, with respect to the Borrower and its Restricted
Subsidiaries for any period, the Consolidated net income (or loss) of the
Borrower and its Restricted Subsidiaries for such period determined in
accordance with GAAP; provided that for purposes of the determination of
Net Income pursuant to Section 10.7(c), (i) the effects of goodwill
impairment adjustments arising out of the initial application of FASB 142
shall be excluded (provided that the actual amount of such goodwill
impairment adjustments shall not exceed $30,000,000) and (ii) the loss
associated with the sale of Realty One, Inc. shall be excluded.
"Subordinated Debt" means the collective reference to (i) the Blackacre
Subordinated Debt and the Blackacre Subordinated Contingent Obligations,
and (ii) any other Debt (including, without limitation, any other
Contingent Obligations) of the Borrower or any Restricted Subsidiary which
(A) is subordinated in right and time of payment to the Obligations in a
manner reasonably satisfactory to the Agents and the Required Lenders and
(B) contains such other terms and conditions as are reasonably satisfactory
to the Agents and the Required Lenders.
(b) Additional Defined Terms. Section 1.1 of the Credit Agreement is
amended by the addition of the following defined terms (in alphabetical order):
"Blackacre Financing Amount" means the sum of the gross proceeds
actually paid to the Borrower pursuant to the Blackacre Subordinated Credit
Agreement and the Series B Convertible Preferred Subscription Agreement.
"Blackacre Subordinated Contingent Obligations" means the Subordinated
Debt of the Subsidiary Guarantors consisting of the Contingent Obligations
of the Subsidiary Guarantors with respect to the Blackacre Subordinated
Debt.
"Blackacre Subordinated Credit Agreement" means the $37,500,000
Subordinated Credit Agreement dated as of June 7, 2002 by and among the
Borrower, as borrower, the lenders who are or may become party thereto, as
lenders, and ▇▇▇▇▇▇▇▇▇ L.L.C., as administrative agent.
"Blackacre Subordinated Debt" means the Subordinated Debt of the
Borrower evidenced by the Blackacre Subordinated Credit Agreement.
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"Blackacre Subordinated Loan Documents" means the Blackacre
Subordinated Credit Agreement and all exhibits and schedules thereto and
each other document, instrument, certificate and agreement executed or
delivered by the Borrower or any Subsidiary thereof in connection with the
Blackacre Subordinated Credit Agreement or otherwise referred to therein or
contemplated thereby, including, without limitation, each document,
instrument, certificate and agreement with respect to the Series B
Convertible Preferred Stock and the Series C Convertible Preferred Stock
and the Trust Convertible Preferred Securities, all as amended, restated or
otherwise modified from time to time.
"Convertible Preferred Stock" means, collectively, the Series A
Convertible Preferred Stock, the Series B Convertible Preferred Stock and
the Series C Convertible Preferred Stock.
"Disqualified Stock" shall have the meaning assigned thereto in the
Blackacre Subordinated Credit Agreement.
"FASB 142" means Financial Accounting Standards Board Statement No.
142, as in effect on the Second Amendment Effective Date, specifying
applicable accounting principles with respect to goodwill adjustments.
"Qualified Equity Interest" means any Qualified Stock and all warrants,
options or other rights to acquire Qualified Stock (but excluding any debt
security that is convertible into or exchangeable for capital stock or
other equity interests). For the purposes of this definition, "Qualified
Stock" of any Person means any and all capital stock or equity interests of
such Person, other than Disqualified Stock.
"Second Amendment Effective Date" means June 7, 2002.
"Senior Debt" means, with respect to the Borrower and its Restricted
Subsidiaries on any date of determination, Total Debt of such Persons minus
Subordinated Debt of such Persons.
"Series A Certificate of Designation" means the Certificate of
Designation of the Series A Convertible Preferred Stock as in effect on the
Second Amendment Effective Date.
"Series A Convertible Preferred Stock" means the Series A Convertible
Preferred Stock of the Borrower, par value $.01 per share, having a
liquidation preference of $100.00 per share and such other rights and
preferences as are set forth in the Series A Certificate of Designation
(which preferred stock was issued in exchange for the convertible preferred
stock of the Borrower, par value $.01 per share, having a liquidation
preference of $100.00 per share and such other rights and preferences as
are set forth in the Certificate of Designation filed with the Secretary of
State of the State of Delaware on February 3, 2000).
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"Series B Certificate of Designation" means the Certificate of
Designation of the Series B Convertible Preferred Stock as in effect on the
Second Amendment Effective Date.
"Series B Convertible Preferred Stock" means the Series B Convertible
Preferred Stock of the Borrower, par value $.01 per share, having a
liquidation preference of $100.00 per share and such other rights and
preferences as are set forth in the Series B Certificate of Designation.
"Series B Convertible Preferred Stock Documents" means each document,
instrument, certificate and agreement executed or delivered by the Borrower
or any Subsidiary thereof in connection with the issuance of the Series B
Convertible Preferred Stock or otherwise referred to therein or
contemplated thereby, including, without limitation, the Series B
Convertible Preferred Subscription Agreement and each document, instrument,
certificate and agreement with respect to the Series C Convertible
Preferred Stock and the Trust Convertible Preferred Securities, all as
amended, restated or otherwise modified from time to time.
"Series B Convertible Preferred Subscription Agreement" means the Stock
Subscription and Exchange Agreement, dated as of June 7, 2002, by and among
the Borrower and the purchasers specified on the signature pages thereof
with respect to the sale and purchase of the Series B Convertible Preferred
Stock.
"Series C Certificate of Designation" means the Certificate of
Designation of the Series C Convertible Preferred Stock as in effect on the
Second Amendment Effective Date.
"Series C Convertible Preferred Stock" means the Series C Convertible
Preferred Stock of the Borrower, par value $.01 per share, having a
liquidation preference of $100.00 per share and such other rights and
preferences as are set forth in the Series C Certificate of Designation,
into which (i) the Blackacre Subordinated Debt may be converted, (ii)
Series A Convertible Preferred Stock may be converted and (iii) the Series
B Convertible Preferred Stock may be converted.
"Total Leverage Ratio" means the ratio calculated pursuant to Section
9.1(a) hereof; provided that for the purposes of determining the Applicable
Margin pursuant to Section 4.1(c) and the Commitment Fee Rate pursuant to
Section 4.3(a), the Total Leverage Ratio shall equal the greater of (i) the
Total Leverage Ratio (as determined after the Second Amendment Effective
Date) and (ii) the Leverage Ratio (as determined prior to the Second
Amendment Effective Date).
"Trust" means the statutory business trust to be formed by the Borrower
in conjunction with any conversion by the Borrower of the Blackacre
Subordinated Debt, the Series A Convertible Preferred Stock or the Series B
Convertible Preferred Stock into Trust Convertible Preferred Securities.
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"Trust Convertible Preferred Securities" means the 10% Trust
Convertible Preferred Securities of the Trust into which, with the prior
written consent of the Agents and the Required Lenders, (i) the Blackacre
Subordinated Debt may be converted, (ii) the Series A Convertible Preferred
Stock may be converted and (iii) the Series B Convertible Preferred Stock
may be converted.
(c) Deletion of Defined Terms. The definition of the term "Leverage Ratio"
which is set forth in Section 1.1 of the Credit Agreement is hereby deleted in
its entirety.
(d) Amendments to Section 4.1(c).
(i) Applicable Margin Table. The table set forth in subsection (c) of
Section 4.1 of the Credit Agreement is hereby deleted in its entirety and
the following table is substituted in lieu thereof:
Applicable Margin Per Annum
Level Total Leverage Ratio LIBOR + Base Rate +
----- -------------------- -----------------------------
I Greater than 3.00 to 1.00 2.75% 1.25%
II Equal to or less than 2.50% 1.00%
3.00 to 1.00 but greater
than 2.25 to 1.00
III Equal to or less than 2.25% 0.75%
2.25 to 1.00 but greater
than 1.50 to 1.00
IV Equal to or less than 2.00% 0.50%
1.50 to 1.00
(ii) Substitution of Total Leverage Ratio for Leverage Ratio. Each
reference to the term "Leverage Ratio" in subsection (c) of Section 4.1 of
the Credit Agreement is hereby deleted in its entirety and the term "Total
Leverage Ratio" is substituted in lieu thereof:
(e) Amendment to Section 4.3(a). The table set forth in subsection (a) of
Section 4.3 of the Credit Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:
Level Commitment Fee Rate
----- -------------------
I 0.500%
II 0.500%
III 0.500%
IV 0.375%
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(f) Amendment of Section 6.1(w) and Addition of New Section 6.1(w).
Subsection (w) of Section 6.1 of the Credit Agreement is amended to become
subsection (x) of Section 6.1 of the Credit Agreement and the following
subsection (w) of Section 6.1 of the Credit Agreement is hereby set forth as an
addition to the Credit Agreement:
(w) Additional Subordinated Debt and Equity Documents.
(i) Blackacre Subordinated Loan Documents. Each Blackacre
Subordinated Loan Document has been identified on Schedule 6.1(w), and
the Borrower has delivered to the Administrative Agent true, complete
and correct copies of the Subordinated Blackacre Loan Documents
together with all amendments and modifications thereto. The
Subordinated Blackacre Loan Documents (including the schedules and
exhibits thereto) comprise a full and complete copy of all agreements
between the parties thereto with respect to the subject matter thereof
and all transactions related thereto, and there are no agreements or
understandings, oral or written, or side agreements not contained
therein that relate to or modify the substance thereof. As of the
Second Amendment Effective Date, the representations and warranties
made by the Borrower in the Blackacre Subordinated Loan Documents are
true and correct and no default or event of default exists thereunder.
(ii) Series B Convertible Preferred Stock Documents. Each Series
B Convertible Preferred Stock Document has been identified on Schedule
6.1(w), and the Borrower has delivered to the Administrative Agent
true, complete and correct copies of the Series B Convertible Preferred
Stock Documents together with all amendments and modifications thereto.
The Series B Convertible Preferred Stock Documents (including the
schedules and exhibits thereto) comprise a full and complete copy of
all agreements between the parties thereto with respect to the subject
matter thereof and all transactions related thereto, and there are no
agreements or understandings, oral or written, or side agreements not
contained therein that relate to or modify the substance thereof. As of
the Second Amendment Effective Date, the representations and warranties
made by the Borrower in the Series B Convertible Preferred Stock
Documents are true and correct and no default or event of default
exists thereunder.
(g) Amendment to Section 9.1. Section 9.1 of the Credit Agreement is hereby
deleted in its entirety and the following is substituted in lieu thereof:
SECTION 9.1 Leverage Ratios.
(a) Total Leverage Ratio. Permit the ratio of (i) Total Debt as of the
end of any fiscal quarter to (ii) EBITDA for the period of four (4)
consecutive fiscal quarters ending on such date to be greater than the
corresponding ratio set forth below:
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Period Ratio
------ -----
March 31, 2002 through and including
March 31, 2003 3.50 to 1.00
June 30, 2003 and thereafter 3.25 to 1.00
provided that (A) for the purpose of the calculation hereof for the fiscal
quarter ending March 31, 2002, EBITDA shall equal EBITDA for the period of
two (2) consecutive fiscal quarters ending on such date times two (2); and
(B) for the purpose of the calculation hereof for the fiscal quarter ending
June 30, 2002, EBITDA shall equal EBITDA for the period of three (3)
consecutive fiscal quarters ending on such date times four-thirds (4/3).
Notwithstanding anything to the contrary contained in this Agreement, Total
Debt as of March 31, 2002 through and including September 29, 2002 shall
not exceed $195,000,000.
(b) Senior Leverage Ratio. Permit the ratio of (i) Senior Debt as of
the end of any fiscal quarter to (ii) EBITDA for the period of four (4)
consecutive fiscal quarters ending on such date to be greater than 3.00 to
1.00; provided that (A) for the purpose of the calculation hereof for the
fiscal quarter ending March 31, 2002, EBITDA shall equal EBITDA for the
period of two (2) consecutive fiscal quarters ending on such date times two
(2); and (B) for the purpose of the calculation hereof for the fiscal
quarter ending June 30, 2002, EBITDA shall equal EBITDA for the period of
three (3) consecutive fiscal quarters ending on such date times four-thirds
(4/3). Notwithstanding anything to the contrary contained in this
Agreement, Senior Debt as of March 31, 2002 through and including September
29, 2002 shall not exceed $180,000,000.
(h) Amendment to Section 9.2. Section 9.2 of the Credit Agreement is hereby
deleted in its entirety and the following is substituted in lieu thereof:
SECTION 9.2 Minimum Net Worth. Permit, as of any fiscal quarter end,
Consolidated Net Worth to be less than the sum of (a) $347,135,000 plus (b)
fifty percent (50%) of cumulative Net Income for each quarter for which Net
Income is greater than zero during the period commencing on the Second
Amendment Effective Date and ending on such fiscal quarter end (excluding
the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the
Borrower) plus (c) seventy-five percent (75%) of the Net Cash Proceeds of
any equity issuance by the Borrower or any of its Restricted Subsidiaries
subsequent to the Second Amendment Effective Date less (d) the actual
amount of impairment adjustments arising out of the initial application of
FASB 142 (as reflected in the financial statements of the Borrower to be
filed with its Report on Form 10-Q for the fiscal quarter ending June 30,
2002); provided that the actual amount of such impairment adjustments
pursuant to clause (d) above shall not exceed $30,000,000.
(i) Amendment to Section 9.3. Section 9.3 of the Credit Agreement is hereby
deleted in its entirety and the following is substituted in lieu thereof:
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SECTION 9.3 Debt to Capitalization Ratios.
(a) Total Debt to Total Capitalization Ratio. Permit, as of any fiscal
quarter end, the ratio of (i) Total Debt as of such fiscal quarter end to
(ii) Total Capitalization as of such fiscal quarter end to exceed 0.45 to
1.00.
(b) Senior Debt to Total Capitalization Ratio. Permit, as of any fiscal
quarter end, the ratio of (i) Senior Debt as of such fiscal quarter end to
(ii) Total Capitalization as of such fiscal quarter end to exceed 0.40 to
1.00.
(j) Amendment to Section 10.1(c). Subsection (c) of Section 10.1 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
(c) Subordinated Debt in an aggregate amount not to exceed
$100,000,000 on any date of determination; provided that such
Subordinated Debt may include Blackacre Subordinated Debt and Blackacre
Subordinated Contingent Obligations in an aggregate principal amount
not to exceed $37,500,000 (plus interest, fees and expenses) on any
date of determination.
(k) Amendments to Section 10.4(g).
(i) The reference to "$100,000,000 (plus gains and minus losses
actually realized from such investments and loans after December 31, 2000)" in
subsection (g) of Section 10.4 of the Credit Agreement is hereby deleted in its
entirety and "$100,000,000 (plus gains and minus losses actually realized from
such investments and loans after December 31, 2000 and plus any portion of the
Blackacre Financing Amount which is not used to finance the investments
permitted pursuant to subsections (i) and (j) of this Section 10.4)" is inserted
in lieu thereof.
(ii) Subsection (g) of Section 10.4 of the Credit Agreement is hereby
further amended by deleting the "and" at the end of such subsection.
(l) Amendment to Section 10.4(h) and Addition of New Sections 10.4(i) and
(j). Subsection (h) of Section 10.4 of the Credit Agreement is hereby amended by
deleting the "." at the end of such subsection and inserting ";" in lieu
thereof; and the following subsections (i) and (j) are hereby set forth as an
addition to Section 10.4 of the Credit Agreement:
(i) the investment by the Borrower in HQ Global as more particularly
described on Schedule 10.4(i) attached hereto; provided that the aggregate
amount of such investment, together with the investment described in
subsection (j) of this Section 10.4, shall not exceed the Blackacre
Financing Amount; and
(j) the investment by the Borrower in a partnership to be formed by the
Borrower and Sun International as more particularly described on Schedule
10.4(j) attached hereto; provided that the aggregate amount of such
investment, together with the investment described in subsection (i) of
this Section 10.4, shall not exceed the Blackacre Financing Amount.
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(m) Amendment to Section 10.7(a). Subsection (a) of Section 10.7 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
(a) the Borrower or any Restricted Subsidiary may pay dividends in
Qualified Equity Interests;
(n) Amendment to Section 10.7(b), Amendment to Section 10.7(c) and Addition
of New Section 10.7(d). Subsection (b) of Section 10.7 of the Credit Agreement
is hereby amended by deleting "and" at the end of such subsection; subsection
(c) of Section 10.7 of the Credit Agreement is hereby amended by deleting the
"." at the end of such subsection and inserting "; and" in lieu thereof; and the
following subsection (d) is hereby set forth as an addition to Section 10.7 of
the Credit Agreement:
(d) nothing in this Section 10.7 shall preclude or restrict any
purchase, redemption other acquisition or retirement for value of any
capital stock (or any options, warrants or rights to acquire shares of
capital stock) required by the terms of any acquisition or related
agreement pursuant to which any Restricted Subsidiary was acquired.
(o) Amendment to Section 10.10. Section 10.10 of the Credit Agreement is
hereby deleted in its entirety and the following is substituted in lieu thereof:
SECTION 10.10 Amendments; Payments and Prepayments of Subordinated
Debt. Amend or modify (or permit the modification or amendment of) any of
the terms or provisions of any Subordinated Debt (including, without
limitation, any Contingent Obligations with respect to any Subordinated
Debt) in any manner which would reasonably be expected to have an adverse
effect upon the rights or interests of the Agents or the Lenders, or make
any payment or prepayment on, or redeem or acquire for value (including,
without limitation, by way of depositing with any trustee with respect
thereto money or securities before due for the purpose of paying when due)
any Subordinated Debt (including, without limitation, any Contingent
Obligations with respect to any Subordinated Debt); provided that the
Borrower shall be permitted to make payments of interest, fees and expenses
with respect to the Blackacre Subordinated Debt solely to the extent such
payments are required pursuant to the Blackacre Subordinated Credit
Agreement as in effect on the Second Amendment Effective Date.
(p) Amendment of Section 10.13 and Addition of New Section 10.13 and New
Section 10.14. Section 10.13 of the Credit Agreement is amended to become
Section 10.15 of the Credit Agreement and the following Section 10.13 and
Section 10.14 of the Credit Agreement are hereby set forth as an addition to the
Credit Agreement:
SECTION 10.13 Limitation on Right to Convert. Exercise any right to
convert the Blackacre Subordinated Debt, the Series A Convertible Preferred
Stock or the Series B Convertible Preferred Stock into Trust Convertible
Preferred Securities without the prior written consent of the Agents and
the Required Lenders.
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SECTION 10.14 Blackacre Subordinated Loan Documents. Amend or modify
any of the Blackacre Subordinated Loan Documents in any manner which could
reasonably be expected to have an adverse effect upon the rights or
interests of the Agents or the Lenders.
(q) Amendment to Section 11.1(g). Subsection (g) of Section 11.1 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
(g) Debt Cross-Default. (i) There shall occur any acceleration of the
maturity of an aggregate principal amount outstanding of any Debt for Money
Borrowed (other than the Notes) of the Borrower or any Restricted
Subsidiary in excess of $5,000,000 (other than any such acceleration
resulting from the sale of an asset to the extent that such Debt for Money
Borrowed was incurred to finance the acquisition of such asset, by its
terms is due and payable on the sale of such asset and is paid in full when
due), or (ii) any other event shall occur or condition shall exist under
any agreement, mortgage, indenture or instrument relating to any Debt for
Money Borrowed of the Borrower or any Restricted Subsidiary in excess of
$5,000,000 (including, without limitation, Debt for Money Borrowed under
the Blackacre Subordinated Loan Documents) and shall continue after the
applicable grace or cure period, if any, specified in such agreement,
mortgage, indenture or instrument, if the effect of any such event or
condition is to accelerate, or to permit the acceleration of, the maturity
of such Debt for Money Borrowed (other than any such acceleration resulting
from the sale of an asset to the extent that such Debt for Money Borrowed
was incurred to finance the acquisition of such asset, by its terms is due
and payable on the sale of such asset and is paid in full when due), or
(iii) the Borrower or any Restricted Subsidiary shall default in the
payment of any Debt for Money Borrowed in excess of $5,000,000 at final
maturity.
(r) Amendment to Section 11.1(i). Subsection (i) of Section 11.1 of the
Credit Agreement is hereby deleted in its entirety and the following is
substituted in lieu thereof:
(i) Change of Ownership and Control. Any person or group of persons
(within the meaning of Section 13(d) of the Securities Exchange Act of
1934, as amended) other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and any (i) trusts of which
he and/or any of his children or spouse are beneficiaries or (ii) any other
Persons of which he or any of his children or spouse is the controlling
beneficial equityholder, and their respective Affiliates, shall obtain
ownership or control in one or more series of transactions of more than
twenty-five percent (25%) of the common stock and twenty-five percent (25%)
of the voting power of the Borrower entitled to vote in the election of
members of the board of directors of the Borrower and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
any trusts of which he and/or any of his children or spouse are
beneficiaries or any other Persons of which he or any of his children or
spouse is the controlling beneficial equityholder, and their respective
Affiliates cease to own or control fifty-one percent (51%) or more of the
voting power of the Borrower; provided, however, the acquisition of up to
twenty-five percent (25%) of the common stock and up to twenty-five percent
(25%) of the voting power of the Borrower by Blackacre Capital Management
LLC and/or its Affiliates by reason of the conversion of Series A
Convertible Preferred Stock, Series B Convertible
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Preferred Stock, Series C Convertible Preferred Stock and/or Blackacre
Subordinated Debt owned by any of them shall be excluded from the
foregoing.
(s) Amendment to Schedules. The Credit Agreement is hereby amended by
replacing or adding Schedules 6.1(a), 6.1(w), 10.4(i) and 10.4(j) thereto in the
form of Schedules 6.1(a), 6.1(w), 10.4(i) and 10.4(j) to this Amendment.
II. CONDITIONS TO EFFECTIVENESS. This Amendment shall become effective only
upon the satisfaction of all of the following conditions precedent (the date of
satisfaction of all such conditions being referred to herein as the "Amendment
Effective Date"):
(a) Amendment Documents. On or before the Amendment Effective Date, the
Administrative Agent shall have received a fully executed original of this
Amendment executed by the Borrower, the Subsidiary Guarantors, the Agents
and the Required Lenders.
(b) Blackacre Subordinated Credit Agreement. On or before the Amendment
Effective Date,
(i) Blackacre Subordinated Credit Agreement. The Agents and the
Lenders shall have received a complete executed copy of the Blackacre
Subordinated Credit Agreement, including, without limitation, all
exhibits, schedules and attachments thereto, all in form and substance
reasonably satisfactory to the Administrative Agent and the Required
Lenders and certified to be true, correct and complete by the Borrower.
(ii) Other Blackacre Subordinated Loan Documents. The Agents and
the Lenders shall have received all Blackacre Subordinated Loan
Documents reasonably requested by the Agents and the Lenders which have
been executed in connection with the Blackacre Subordinated Credit
Agreement (including, without limitation, each opinion of counsel
delivered in connection with the Blackacre Subordinated Credit
Agreement), each in form and substance reasonably satisfactory to the
Agents and the Required Lenders.
(c) Series B Convertible Preferred Stock. On or before the Amendment
Effective Date,
(i) Series B Convertible Preferred Stock Documents. The Agents
and the Lenders shall have received all Series B Convertible Preferred
Stock Documents reasonably requested by the Agents and the Lenders
which have been executed in connection with the issuance of the Series
B Convertible Preferred Stock (including, without limitation, each
opinion of counsel delivered in connection with the issuance of the
Series B Convertible Preferred Stock), each in form and substance
reasonably satisfactory to the Agents and the Required Lenders.
12
(ii) Proceeds of the Series B Convertible Preferred Stock. The
Borrower shall have delivered to the Agents a certificate, in form and
substance reasonably satisfactory to the Agents, certifying that the
Borrower has received proceeds from the issuance of the Series B
Convertible Preferred Stock in the amount of at least $12,500,000.
(d) Corporate and Other Proceedings. On or before the Amendment
Effective Date, all corporate and other proceedings taken or to be taken in
connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by the Administrative
Agent, acting on behalf of the Lenders, and its counsel, shall be
reasonably satisfactory in form and substance to the Administrative Agent
and such counsel, and the Administrative Agent and such counsel shall have
received all such counterpart originals or certified copies of such
documents as the Administrative Agent may reasonably request.
(e) Fees and Expenses.
(i) Amendment Fee. On or before the Amendment Effective Date, the
Borrower shall have paid to the Administrative Agent, for the account
of each Lender which has consented to and joined in the execution of
this Amendment by 5:00 p.m. on June 10, 2002 (each a "Consenting
Lender"), an amendment fee equal to the product of (i) the Commitment
of such Consenting Lender and (ii) 25 basis points. The amendment fees
shall be distributed by the Administrative Agent to each Consenting
Lender by wire transfer of immediately available funds.
(ii) Other Fees and Expenses. On or before the Amendment
Effective Date, the Borrower shall have paid all other reasonable fees
and out of pocket charges and other expenses incurred in connection
with this Amendment and the transactions contemplated hereby,
including, without limitation, the fees, charges and other expenses
referred to in Section IV(e) of this Amendment.
(f) Other Documents. On or before the Amendment Effective Date, the
Agents shall have received any other agreements, documents or instruments
(including, without limitation, an opinion of counsel) reasonably requested
thereby in connection with the execution of this Amendment.
III. 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 any judgment,
order or decree applicable to the Borrower or any of its Subsidiaries, or
constitute a breach of the Articles of Incorporation, Bylaws or corporate
resolutions of the Borrower or any Subsidiary Guarantor or any agreement to
13
which the Borrower or any Subsidiary Guarantor is a party or by which its
or their assets are bound.
(b) Each of 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 and the performance
of the Credit Agreement as amended and modified by this Amendment. 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.
(c) (i) 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).
(ii) The representations and warranties of the Borrower and its
Subsidiaries contained in the Blackacre Subordinated Credit Agreement and
in the other Blackacre Subordinated 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).
(iii) The representations and warranties of the Borrower and its
Subsidiaries contained in the Series B Convertible Preferred Stock
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).
(d) (i) No Default or Event of Default exists under the Credit
Agreement or any other Loan Document.
(ii) No Default or Event of Default as defined in the
Subordinated Blackacre Credit Agreement or any other Subordinated Blackacre
Loan Document exists.
(iii) No Default or Event of Default as defined in any Series B
Convertible Preferred Stock Document exists.
14
IV. 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.
(e) Fees and Expenses. All reasonable fees and 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 such tax
and the 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 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.
15
V. 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]
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.
By: /s/
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Executive Vice President
--------------------------
LENDERS:
WACHOVIA BANK, NATIONAL ASSOCIATION
(f/k/a First Union National Bank),
as Administrative Agent and Lender
By: /s/
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
---------------------------------
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Syndication Agent and Lender
By: /s/
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Title: Authorized Signatory
-----------------------------
▇▇▇▇▇▇ BROTHERS BANKHAUS AG,
London Branch
By: /s/
------------------------------------
Name: ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: Authorised Signatory
-----------------------------
BANK OF AMERICA, N.A.,
as Documentation Agent
By: /s/
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Title: Senior Vice President
-------------------------------
THE BANK OF NEW YORK
By: /s/
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Vice President
-------------------------------
LASALLE BANK NATIONAL ASSOCIATION
By: /s/
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇ Thick
-------------------------------
Title: Vice President
-------------------------------
U.S. BANK NATIONAL ASSOCIATION
(f/k/a Firstar Bank)
By: /s/
--------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Title: Vice President
-------------------------------
BARCLAYS BANK PLC
By: /s/
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Title: Director
-------------------------------
CITIBANK, N.A.,
successor to European American Bank
By: /s/
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: Vice President
-------------------------------
NATIONAL CITY BANK
By:
--------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE ROYAL BANK OF SCOTLAND PLC
By: /s/
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Senior Corporate Manager
--------------------------------
GUARANTORS:
IFS SECURITIES, INC.
INSIGNIA FINANCIAL SERVICES, INC.
INSIGNIA INVESTMENT MANAGEMENT, INC.
INSIGNIA OPPORTUNITY DIRECTIVES II, LLC
By: Insignia Financial Services, Inc., Member
▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇ VILLAGE PROPERTIES, INC.
RAQZ CORP.
WESTVILLE PROPERTIES, INC.
By: /s/
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇ COMMERCIAL REALTY, INC.
CONSTRUCTION INTERIORS, INC.
E.S.G. OPERATING CO., INC.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ MANAGEMENT
CORPORATION
FIRST ▇▇▇▇▇▇▇ PROPERTIES, L.P.
By: Insignia Commercial Investments Group, Inc.
its General Partner
I/ESG KENSINGTON INVESTORS, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
I/ESG OCTANE HOLDINGS, LLC
IBTHAI, INC.
IBT II, INC.
IBT III, INC.
IBT IV, INC.
IBT V, INC.
IBT VI, INC.
ICIG 101 MARIETTA, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICIG COUNTRY CLUB MANOR, L.L.C.
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICIG FRESH ▇▇▇▇▇▇▇, L.L.C.
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICIG MOCKINGBIRD, L.L.C
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICIG OAKHILL DIRECTIVES, L.L.C.
By: Insignia/ESG, Inc., its Managing Member
ICIG SANTA ▇▇▇▇, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICII-WV HOLDINGS, LLC
By: Insignia Capital Investments, Inc.,
its Managing Member
IFC ACQUISITION CORP. I
IFC ACQUISITION CORP. II
IFS ACQUISITION LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS ACQUISITION LLC II
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS ACQUISITION LLC III
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS ACQUISITION LLC IV
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS ACQUISITION DIRECTIVES, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS SOUTHLAND INVESTORS LLC
By: Insignia Realty Investors, LLC, its Managing
Member
By: Insignia Commerical Investments Group, Inc.,
its Managing Member
INSIGNIA/ESG, INC.
INSIGNIA/ESG OF COLORADO, INC.
INSIGNIA/ESG CAPITAL CORPORATION
INSIGNIA/ESG NORTHEAST, INC.
INSIGNIA ACQUISITION CORPORATION
INSIGNIA CAPITAL INVESTMENTS, INC.
INSIGNIA CLINTON DIRECTIVES, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA COMMERCIAL INVESTMENTS
GROUP, INC.
INSIGNIA COMMERCIAL MANAGEMENT, INC.
INSIGNIA DEVELOPMENT GROUP, INC.
INSIGNIA ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLC
By: Insignia Residential Group, Inc.,
its Managing Member
INSIGNIA HOTELS III, L.L.C.
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA ML PROPERTIES, LLC
By: Insignia/ESG, Inc., its Managing Member
INSIGNIA NAUTICA, INC.
INSIGNIA RO, INC.
INSIGNIA REALTY INVESTORS, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA REALTY INVESTORS II, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA REALTY INVESTORS III, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA RESIDENTIAL GROUP, INC.
INSIGNIA RESIDENTIAL INVESTMENT
CORPORATION
▇▇▇▇▇▇▇ ROAD, L.P.
By: Insignia Commercial Investments Group, Inc.,
its General Partner
PAYROLL SERVICES, INC.
SECURED INVESTMENT CORPORATION
WV FINANCING, LLC
By: Insignia Capital Investments, Inc.,
its Managing Member
By: /s/
----------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President