Execution Copy
FIFTH AMENDMENT TO CREDIT AGREEMENT
This FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), made and
entered into as of November 20, 2001, is by and among MATRIX FINANCIAL SERVICES
CORPORATION, an Arizona corporation (the "Company"), the lenders from time to
time party to the Credit Agreement referred to below (each a "Lender" and
collectively, the "Lenders"), and U.S. BANK NATIONAL ASSOCIATION ("U.S. Bank"),
as agent for the Lenders (in such capacity, together with any successor agents
appointed hereunder, the "Agent").
RECITALS
A. The Company, the Lenders and U.S. Bank National Association, in its
capacities as a Lender and as Agent, entered into a Credit Agreement dated as of
September 29, 2000, as amended by that First Amendment to Credit Agreement dated
as of March 5, 2001, that Second Amendment to Credit Agreement dated as of April
11, 2001, that Third Amendment to Credit Agreement dated as of June 29, 2001 and
that Fifth Amendment to Credit Agreement dated as of September 28, 2001 (as
amended, the "Credit Agreement"); and
B. The Company desires to amend certain provisions of the Credit
Agreement, and the Lenders and the Agent have agreed to make such amendments,
subject to the terms and conditions set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby covenant
and agree to be bound as follows:
Section 1. Capitalized Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement, unless the context shall otherwise require.
Section 2. Amendments to Credit Agreement.
2.1 Section 1.01.
(a) The Credit Agreement is hereby amended by amending the
definition of "Adjusted Leverage Ratio", "Applicable Margin",
"Swingline Facility Amount" and "Termination Date" contained in Section
1.01 of the Credit Agreement to read in its entirety as follows:
"Adjusted Leverage Ratio": As of any date of
determination, the ratio of (a) Total Indebtedness to (b)
Adjusted Tangible Net Worth.
"Applicable Margin": With respect to (a) Prime Rate
Advances, 0%; and (b) Eurodollar Advances, 1.20%.
"Eurodollar Rate": With respect to any date of
determination, the average offered rate for one month deposits
in United States dollars, which rate appears on Telerate page
3750 as of 11:00 a.m., London time (or such other time as of
which such rate appears) on such date of determination, or the
rate for such deposits determined by the Agent at such time
based on such other published service of general application
as shall be selected by the Agent for such purpose, provided
that in lieu of determining the rate in the foregoing manner,
at the option of the Agent, the Agent may determine the rate
based on rates at which one month deposits in United States
dollars are offered to the Agent in the interbank Eurodollar
market at such time in an amount approximately equal to the
aggregate principal amount of the Advances to which such rate
is to apply. "Telerate page 3750" means the display designated
as such on the Telerate reporting system operated by Telerate
System Incorporated (or such other page as may replace such
page 3750 for the purpose of displaying London interbank
offered rates of major banks for U.S. Dollar deposits).
"Swingline Facility Amount": (i) $48,000,000 on or
before November 20, 2001; (ii) $80,000,000 from and after
November 20, 2001 to March 31, 2002; and (iii) $60,000,000
from and after April 1, 2002.
"Termination Date": The earliest of (a) Xxxxx 00,
0000, (x) the date on which the Commitments are terminated or
reduced to zero pursuant to Section 2.01(g), or (c) the date
on which the Commitments are terminated pursuant to Section
6.02.
(b) The Credit Agreement is hereby amended by adding the
definitions of "Adjusted Tangible Net Worth", "Prime Rate" and "Prime
Rate Advance" to Section 1.01 in their correct alphabetical order to
read as follows:
"Adjusted Tangible Net Worth": As of any date of
determination, the sum of the amounts set forth on the
consolidated balance sheet of the Company as the sum of the
common stock, preferred stock, additional paid-in capital and
retained earnings of the Company (excluding treasury stock),
minus the book value of all intangible assets of the Company
and its Subsidiaries, including all such items as goodwill,
trademarks, trade names, service marks, copyrights, patents,
licenses, unamortized debt discount and expenses and the
excess of the purchase price of the assets of any business
acquired by the Company or any of its Subsidiaries over the
book value of such assets, plus Indebtedness of the Company
subordinated in right of payment to the payment of the
Obligations in a manner and to an extent approved by the
Required Banks, minus capitalized excess servicing fees and
capitalized servicing rights, plus the lesser of (a) 95% of
the Appraisal Value of the Eligible Servicing Portfolio or (b)
the book value of the Company's capitalized excess servicing
fees and capitalized rights.
"Appraisal Value": As of any date of determination,
the fair market value of the Company's Eligible Servicing
Portfolio, as determined by the most recent appraisal
conducted by a qualified appraiser acceptable to the Agent to
be performed on not less than a quarterly basis.
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"Eligible Servicing Portfolio": As of any date of
determination, the Servicing Portfolio of the Borrower but
excluding the principal balance of Mortgage Loans included in
the Servicing Portfolio (a) with respect to which the Company
is obligated to repurchase or indemnify the holder of the
Mortgage Loans as a result of defaults on the Mortgage Loans
at any time during the term of such Mortgage Loans, (b) for
which the Servicing Contracts are not owned by the Company
free and clear of Liens (other than Liens in favor of the
Agent), (c) which are serviced by the Company for others under
subservicing arrangements, or (d) which are serviced for
Persons other than Xxxxxx Xxx, Xxxxxxx Mac, Xxxxxx Xxx or such
other Persons which are acceptable to the Required Lenders in
their sole discretion for such purpose.
"Prime Rate": The rate of interest from time to time
publicly announced by the Agent as its "prime rate". The Agent
may lend to its customers at rates that are at, above or below
the Prime Rate. For purposes of determining any interest rate
hereunder or under any other Loan Document which is based on
the Prime Rate, such interest rate shall change as and when
the Prime Rate shall change.
"Prime Rate Advance": An Advance with respect to
which the interest rate is determined by reference to the
Prime Rate.
(c) Section 1.01 of the Credit Agreement is hereby amended by
deleting the definitions of "Reference Rate" and "Reference Rate
Advance" in their entirety.
2.2 Prime Rate. Except for references to such terms
specifically so amended by this Amendment, all remaining references to
the term "Reference Rate" or "Reference Rate Advance" contained in the
Credit Agreement are hereby amended to be references to the term "Prime
Rate" or "Prime Rate Advance", as applicable.
2.3 Adjusted Tangible Net Worth. Section 4.14 of the Credit
Agreement is hereby amended in its entirety to read as follows:
Section 4.14 Adjusted Tangible Net Worth. The Company
will not permit its Adjusted Tangible Net Worth at any time to
be less than $30,000,000.
2.4 Adjusted Leverage Ratio. Section 4.15 of the Credit
Agreement is hereby amended in its entirety to read as follows:
Section 4.15. Adjusted Leverage Ratio. The Company
will not permit the Adjusted Leverage Ratio at any time to be
greater than (a) 12 to 1 before November 20, 2001, (b) 14 to 1
from and after November 20, 2001 to March 31, 2002, and (c) 12
to 1 from and after April 1, 2002.
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2.5 Schedule 1.01(a). Schedule 1.01(a) to the Credit Agreement
is hereby amended in its entirety to read as set forth in Schedule
1.01(a) attached to this Amendment, which is made a part of the Credit
Agreement as Schedule 1.01(a) thereto.
Section 3. Effectiveness of Amendments. The amendments contained in
this Amendment shall become effective provided the Agent shall have received at
least five (5) counterparts of this Amendment, duly executed by the Company and
all of the Lenders, and the Agent shall have received the following, each duly
executed or certified:
(a) This Amendment, the Second Amended and Restated Promissory
Note (Warehousing Note) to U.S. Bank National Association, the Amended
and Restated Promissory Note (Warehousing Note) to Residential Funding
Corporation and the Second Amended and Restated Swingline Note to U.S.
Bank National Association, in each case duly executed by the Company.
(b) A copy of the resolutions of the Board of Directors of the
Company authorizing the execution, delivery and performance of this
Amendment certified as true and accurate by its Secretary or Assistant
Secretary, along with a certification by such Secretary or Assistant
Secretary (i) certifying that there has been no amendment to the
Certificate of Incorporation or Bylaws of the Company since true and
accurate copies of the same were delivered to the Lender with a
certificate of the Secretary of the Company dated September 29, 2000,
and (ii) identifying each officer of the Company authorized to execute
this Amendment, the Second Amended and Restated Promissory Note
(Warehousing Note) to U.S. Bank National Association, the Amended and
Restated Promissory Note (Warehousing Note) to Residential Funding
Corporation and the Second Amended and Restated Swingline Note to U.S.
Bank National Association and any other instrument or agreement
executed by the Company in connection with this Amendment
(collectively, the "Amendment Documents"), and certifying as to
specimens of such officer's signature and such officer's incumbency in
such offices as such officer holds.
(c) Certified copies of all documents evidencing any necessary
corporate action, consent or governmental or regulatory approval (if
any) with respect to this Amendment.
(d) The Consent and Reaffirmation of Guaranty, duly executed
by the Guarantor.
(e) A written opinion, addressed to the Agent and the Lenders,
dated the date hereof and in a form satisfactory to the Agent,
concerning the authorization, execution, delivery, performance and
enforceability of the Amendment Documents executed by the Borrower.
(f) The Company shall have satisfied such other conditions as
specified by the Agent and the Lenders, including payment of all unpaid
legal fees and expenses incurred by the Agent through the date of this
Amendment in connection with the Credit Agreement and the Amendment
Documents.
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Section 4. Representations, Warranties, Authority, No Adverse Claim.
4.1 Reassertion of Representations and Warranties, No Default.
The Company hereby represents that on and as of the date hereof and
after giving effect to this Amendment (a) all of the representations
and warranties contained in the Credit Agreement are true, correct and
complete in all respects as of the date hereof as though made on and as
of such date, except for changes permitted by the terms of the Credit
Agreement, and (b) there will exist no Unmatured Event of Default or
Event of Default under the Credit Agreement as amended by this
Amendment on such date which has not been waived by the Agent and the
Lenders.
4.2 Authority, No Conflict, No Consent Required. The Company
represents and warrants that the Company has the power and legal right
and authority to enter into the Amendment Documents and has duly
authorized as appropriate the execution and delivery of the Amendment
Documents and other agreements and documents executed and delivered by
the Company in connection herewith or therewith by proper corporate
action, and none of the Amendment Documents nor the agreements
contained herein or therein contravenes or constitutes a default under
any agreement, instrument or indenture to which the Company is a party
or a signatory or a provision of the Company's Certificate of
Incorporation, Bylaws or any other agreement or requirement of law in
which the consequences of such default or violation could have a
material adverse effect on the business, operations, properties, assets
or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole, or result in the imposition of any Lien
on any of its property under any agreement binding on or applicable to
the Company or any of its property except, if any, in favor of the
Agent on behalf of the Lenders. The Company represents and warrants
that no consent, approval or authorization of or registration or
declaration with any Person, including but not limited to any
governmental authority, is required in connection with the execution
and delivery by the Company of the Amendment Documents or other
agreements and documents executed and delivered by the Company in
connection therewith or the performance of obligations of the Company
therein described, except for those which the Company has obtained or
provided and as to which the Company has delivered certified copies of
documents evidencing each such action to the Agent.
4.3 No Adverse Claim. The Company warrants, acknowledges and
agrees that no events have taken place and no circumstances exist at
the date hereof which would give the Company a basis to assert a
defense, offset or counterclaim to any claim of the Agent or the
Lenders with respect to the Obligations or the Company's obligations
under the Credit Agreement as amended by this Amendment.
Section 5. Affirmation of Credit Agreement and Pledge Agreement,
Further References. The Agent, the Lenders, and the Company each acknowledge and
affirm that the Credit Agreement, as hereby amended, is hereby ratified and
confirmed in all respects and all terms, conditions and provisions of the Credit
Agreement, except as amended by this Amendment, shall remain unmodified and in
full force and effect. The Company confirms to the Agent and the Lenders that
the Company's obligations under the Credit Agreement, as amended by this
Amendment, are and continue to be secured by the security interest granted by
the Company in favor of the Agent and the Lenders under the Pledge Agreement and
all of the terms, conditions, provisions, agreements, requirements, promises,
obligations, duties, covenants and representations of the Company under such
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document and any and all other documents and agreements entered into with
respect to the obligations under the Agreement are incorporated herein by
reference and are hereby ratified and affirmed in all respect by the Company.
All references in any document or instrument to the Credit Agreement are hereby
amended and shall refer to the Credit Agreement as amended by this Amendment.
All of the terms, conditions, provisions, agreements, requirements, promises,
obligations, duties, covenants and representations of the Company under such
documents and any and all other documents and agreements entered into with
respect to the obligations under the Credit Agreement are incorporated herein by
reference and are hereby ratified and affirmed in all respects by the Company.
Section 6. Merger and Integration, Superseding Effect. This Amendment,
from and after the date hereof, embodies the entire agreement and understanding
between the parties hereto and supersedes and has merged into this Amendment all
prior oral and written agreements on the same subjects by and between the
parties hereto with the effect that this Amendment, shall control with respect
to the specific subjects hereof and thereof.
Section 7. Severability. Whenever possible, each provision of this
Amendment and the other Amendment Documents and any other statement, instrument
or transaction contemplated hereby or thereby or relating hereto or thereto
shall be interpreted in such manner as to be effective, valid and enforceable
under the applicable law of any jurisdiction, but, if any provision of this
Amendment, the other Amendment Documents or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto shall
be held to be prohibited, invalid or unenforceable under the applicable law,
such provision shall be ineffective in such jurisdiction only to the extent of
such prohibition, invalidity or unenforceability, without invalidating or
rendering unenforceable the remainder of such provision or the remaining
provisions of this Amendment, the other Amendment Documents or any other
statement, instrument or transaction contemplated hereby or thereby or relating
hereto or thereto in such jurisdiction, or affecting the effectiveness, validity
or enforceability of such provision in any other jurisdiction.
Section 8. Successors. The Amendment Documents shall be binding upon
the Company, the Lenders, and the Agent and their respective successors and
assigns, and shall inure to the benefit of the Company, the Lenders, and the
Agent and the successors and assigns of the Lenders and the Agent.
Section 9. Legal Expenses. As provided in Section 8.03 of the Credit
Agreement, the Company agrees to reimburse the Agent, upon execution of this
Amendment, for all reasonable out-of-pocket expenses (including attorney' fees
and legal expenses of Xxxxxx & Whitney LLP, counsel for the Agent) incurred in
connection with the Credit Agreement, including in connection with the
negotiation, preparation and execution of the Amendment Documents and all other
documents negotiated, prepared and executed in connection with the Amendment
Documents, and in enforcing the obligations of the Company under the Amendment
Documents, and to pay and save the Agent and the Lenders harmless from all
liability for, any stamp or other taxes which may be payable with respect to the
execution or delivery of the Amendment Documents, which obligations of the
Company shall survive any termination of the Credit Agreement.
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Section 10. Headings. The headings of various sections of this
Amendment have been inserted for reference only and shall not be deemed to be a
part of this Amendment.
Section 11. Counterparts. The Amendment Documents may be executed in
several counterparts as deemed necessary or convenient, each of which, when so
executed, shall be deemed an original, provided that all such counterparts shall
be regarded as one and the same document, and either party to the Amendment
Documents may execute any such agreement by executing a counterpart of such
agreement.
Section 12. Governing Law. THE AMENDMENT DOCUMENTS SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT
OF LAW PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS, THEIR HOLDING COMPANIES AND THEIR AFFILIATES.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
MATRIX FINANCIAL SERVICES CORPORATION
By /s/ Xxxxx X. Xxxxx
--------------------------------
Its Chief Financial Officer
--------------------------------
Address for Notices:
-------------------
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, President
Telecopier Number: (000) 000-0000
U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxxx X. Xxxxx
---------------------------------
Its Vice President
---------------------------------
Address for Notices:
-------------------
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopier Number: (000) 000-0000
RESIDENTIAL FUNDING CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Its Director
---------------------------------
Address for Notices:
-------------------
0000 Xxxxx Xxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000
ATTN: Xxxxxxxx Xxxxxx
[Signature Page to Third Amendment to Credit Agreement]
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