CONFORMED AND AMENDED
CREDIT AGREEMENT
between
MATRIX BANCORP, INC.
(formerly Matrix Capital Corporation),
as Borrower,
U.S. BANK NATIONAL ASSOCIATION,
as successor Agent,
and
CERTAIN LENDERS,
as Lenders
$8,000,000
As Increased to $20,000,000
March 12, 1997
As Amended Through June 30, 1999
Conformed to reflect changes effected by waiver, amendment, and assignment
dated August 18, 1997, and amendments dated September 23, 1997, March 12, 1998,
June 29, 1998, November 12, 1998, January 29, 1999, and June 30, 1999, with
changed provisions noted in bold italics. The date of the change is noted in
the margin.
TABLE OF CONTENTS
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SECTION 1 DEFINITIONS AND REFERENCES................................. 1
1.1 Definitions................................................ 1
1.2 Time References............................................ 8
1.3 Other References........................................... 9
1.4 Accounting Principles...................................... 9
SECTION 2 BORROWINGS................................................. 9
2.1 Term Loan.................................................. 9
2.2 Revolving Facility......................................... 9
2.3 Borrowing Procedure........................................ 9
2.4 Termination................................................10
SECTION 3 PAYMENT TERMS..............................................10
3.1 Notes and Payments.........................................10
3.2 Principal and Interest Payments............................11
3.3 Voluntary Prepayments......................................11
3.4 Mandatory Prepayments......................................12
3.5 Interest Rates.............................................12
3.6 Interest Recapture.........................................12
3.7 Interest Calculations......................................12
3.8 Maximum Rate...............................................12
3.9 Order of Application.......................................13
3.10 Distributions to Lenders...................................13
3.11 Sharing of Payments, Etc...................................13
3.12 Offset.....................................................13
3.13 Capital Adequacy...........................................13
3.14 Foreign Lenders, Participants, and Purchasers..............14
3.15 Non-Use Fee................................................14
SECTION 4 SECURITY...................................................14
4.1 Guaranty...................................................14
4.2 Collateral.................................................14
4.3 Further Assurances.........................................14
4.4 Release of Collateral......................................14
SECTION 5 CONDITIONS PRECEDENT.......................................15
SECTION 6 REPRESENTATIONS AND WARRANTIES.............................15
6.1 Purpose and Regulation U...................................15
6.2 Companies..................................................15
6.3 Authorization and Contravention............................15
6.4 Binding Effect.............................................16
6.5 Fiscal Year................................................16
6.6 Current Financials.........................................16
6.7 Debt.......................................................16
6.8 Solvency and Capital Requirements..........................16
6.9 Litigation.................................................16
6.10 Transactions with Affiliates...............................16
6.11 Taxes......................................................16
6.12 Employee Plans.............................................16
6.13 Property and Liens.........................................17
6.14 Intellectual Property......................................17
6.15 Environmental Matters......................................17
6.16 Regulations................................................17
6.17 Insurance..................................................17
6.18 Full Disclosure............................................17
SECTION 7 AFFIRMATIVE COVENANTS..................................... 18
7.1 Reporting Requirements.................................... 18
7.2 Use of Proceeds........................................... 18
7.3 Books and Records......................................... 19
7.4 Inspections............................................... 19
7.5 Taxes..................................................... 19
7.6 Expenses.................................................. 19
7.7 Maintenance of Existence, Assets, and Business............ 19
7.8 Insurance................................................. 19
7.9 Subsidiaries.............................................. 19
7.10 Indemnification........................................... 19
SECTION 8 NEGATIVE COVENANTS........................................ 20
8.1 Debt...................................................... 20
8.2 Liens..................................................... 21
8.3 Investments............................................... 23
8.4 Distributions............................................. 24
8.5 Merger or Consolidation................................... 24
8.6 Dispositions of Assets.................................... 24
8.7 Use of Proceeds........................................... 24
8.8 Transactions with Affiliates.............................. 24
8.9 Employee Plans............................................ 24
8.10 Compliance with Laws and Documents........................ 24
8.11 Government Regulations.................................... 24
8.12 Fiscal Year Accounting.................................... 25
8.13 New Businesses............................................ 25
8.14 Assignment................................................ 25
SECTION 9 FINANCIAL COVENANTS....................................... 25
9.1 Net Worth................................................. 25
9.2 Adjusted Debt/Net Worth................................... 25
9.3 Cash Coverage............................................. 25
9.4 Net Income................................................ 25
9.5 Capital Ratio............................................. 25
9.6 Leverage Ratio............................................ 25
9.7 Classified Assets/Total Capital........................... 25
9.8 Net Charge Offs/Total Loans............................... 25
9.9 Adjusted Assets/Total Assets.............................. 25
9.10 Interest Rate Sensitivity................................. 25
9.11 Commercial Loans/Total Capital............................ 26
SECTION 10 DEFAULTS AND REMEDIES..................................... 26
10.1 Default................................................... 26
10.2 Remedies.................................................. 27
10.3 Right of Offset........................................... 27
10.4 Waivers................................................... 28
10.5 Performance by Agent...................................... 28
10.6 No Responsibility......................................... 28
10.7 No Waiver................................................. 28
10.8 Cumulative Rights......................................... 28
10.9 Rights of Individual Lenders.............................. 28
10.10 Notice to Agent........................................... 29
10.11 Costs..................................................... 29
SECTION 11 AGENT..................................................... 29
11.1 Authorization and Action.................................. 29
11.2 Agent's Reliance, Etc..................................... 29
11.3 Agent and Affiliates...................................... 29
11.4 Credit Decision........................................... 30
11.5 Indemnification........................................... 30
(ii)
11.6 Successor Agent.............................................. 30
SECTION 12 MISCELLANEOUS................................................ 30
12.1 Nonbusiness Days............................................. 30
12.2 Communications............................................... 31
12.3 Form and Number of Documents................................. 31
12.4 Exceptions to Covenants...................................... 31
12.5 Survival..................................................... 31
12.6 Governing Law................................................ 31
12.7 Invalid Provisions........................................... 31
12.8 Conflicts Between Loan Documents............................. 31
12.9 Discharge and Certain Reinstatement.......................... 31
12.10 Amendments, Consents, Conflicts, and Waivers................. 31
12.11 Multiple Counterparts........................................ 32
12.12 Parties...................................................... 32
12.13 Participations............................................... 33
12.14 Transfers.................................................... 33
12.15 Jurisdiction; Venue; Service of Process; and Jury Trial...... 33
12.16 Limitation of Liability...................................... 34
12.17 Entire Agreement............................................. 34
(iii)
SCHEDULES AND EXHIBITS
----------------------
Third Amended Schedule 2 - Lenders and Commitments 06/30/99
Schedule 5 - Closing Conditions
Schedule 6.2 - Companies
Schedule 6.7 - Existing Debt
Schedule 6.9 - Litigation and Judgments
Schedule 6.10 - Affiliate Transactions
Schedule 6.13 - Existing Liens
Second Amended Exhibit A-1 - Term Note 06/30/99
Second Amended Exhibit A-2 - Revolving Note 06/30/99
Exhibit B - Guaranty
Exhibit C - Pledge Agreement
Second Amended Exhibit D-1 - Borrowing Request 06/30/99
Third Amended Exhibit D-2 - Compliance Certificate 06/30/99
Exhibit E - Opinion of Counsel
Amended Exhibit F - Assignment and Assumption Agreement 06/30/99
(iv)
CREDIT AGREEMENT
----------------
06/30/99
THIS AGREEMENT is entered into as of March 12, 1997, between MATRIX
BANCORP, INC. a Colorado corporation formerly named Matrix Capital Corporation
("Borrower"), the Lenders described below, and U.S. BANK NATIONAL ASSOCIATION
(as the successor to Bank One, Texas, N.A.). as Agent for Lenders.
(See Section 1.1 for defined terms.)
06/30/99
Borrower has requested that Lenders extend credit to Borrower not to exceed
a total outstanding principal amount of $20,000,000 (as that amount may be
reduced or canceled pursuant to this agreement) to be used by Borrower as
provided in Section 6.1 and allocated as (A) a term loan of $10,000,000 (the
"Term Loan"), and (B) a revolving-credit facility of $10,000,000 (the "Revolving
Facility") to be funded by Lenders from time to time on and after the Closing
Date but before the Actual-Termination Date. Lenders are willing to extend the
requested credit on the terms and conditions of this agreement.
ACCORDINGLY, for adequate and sufficient consideration, Borrower, Lenders,
and Agent agree as follows:
SECTION 1 DEFINITIONS AND REFERENCES. Unless stated otherwise, the following
--------- --------------------------
provisions apply to each Loan Document, and annexes, exhibits, and schedules to
-- and certificates, reports, and other writings delivered under -- the Loan
Documents.
1.1 Definitions.
-----------
"Actual-Termination Date" means the earlier of either (a) the Stated-
Termination Date or (b) the effective date that Lenders' commitments to lend
under this agreement are fully canceled or terminated in accordance with the
terms of this agreement.
"Adjusted Assets" means, for Matrix Bank and at any time, the sum of (a)
its cash, (b) its Cash Equivalents, (c) its loans that are not non-residential
commercial loans, are evidenced by valid promissory notes, and are secured by
mortgages, deeds of trust, or trust deeds that grant perfected first-priority
Liens on residential-real property, plus (d) its securities that, in respect of
an underlying pool of related mortgage loans, provide for payment by the issuer
to the holder of specified principal installments and a fixed-interest rate on
the unpaid balance, with all prepayments being passed through to the holder,
whether issued in certificate or book-entry form.
"Adjusted Debt" means, for the Companies and at any time, the sum of (a)
their consolidated Debt, minus (b) obligations under bank repurchase agreements,
obligations under escrow-arbitrage-type facilities, deposits at Matrix Bank, and
obligations of Matrix Bank for advances to it by the Federal Home Loan Bank.
"Affiliate" of a Person means any other individual or entity who directly
or indirectly controls, is controlled by, or is under common control with that
Person. For purposes of this definition (a) "control," "controlled by," and
"under common control with" mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of voting securities or other interests, by contract, or otherwise),
and (b) the Companies are "Affiliates" of each other.
06/30/99
"Agent" means, at any time, U.S. Bank National Association (or its
successor appointed under Section 11.6), acting as administrative, collateral,
managing, and syndication agent for Lenders under the Loan Documents.
"Assignment" means an Assignment and Assumption Agreement executed by a
selling Lender and a Purchaser under Sections 12.12 and 12.14 and delivered to
Agent in substantially the form of Exhibit F.
CREDIT AGREEMENT
----------------
"Bankers Blanket Bond" means the bond or bonds, and any renewals,
extensions, or modifications of them, issued with respect to losses incurred by
Matrix Bank, including, without limitation, all bonds represented by Bankers
Blanket Bond, Standard Form No. 24, with attached riders, as revised, and Bank
Employee Dishonesty Blanket Bond, Standard Form No. 28, Surety Association of
America.
"Base Rate" means an annual interest rate equal from day to day to the
floating annual interest rate established by Agent from time to time as its
base-rate of interest, which may not be the lowest interest rate charged by
Agent on loans similar to Borrowings.
"Borrower" is defined in the preamble to this agreement.
"Borrowing" means any amount disbursed (a) by any Lender to Borrower under
the Loan Documents as an original disbursement of funds, a renewal, extension,
or continuation of an amount outstanding, or (b) by Agent or any Lender in
accordance with, and to satisfy a Company's obligations under, any Loan
Document.
06/29/98
"Borrowing Base" means, at any time, 40% of the book value of Matrix Bank's
issued and outstanding common stock subject to Lender Liens.
"Borrowing Date" means, for any Borrowing, the date it is disbursed.
"Borrowing Excess" means, at any time, the amount by which any of the
limitations of Section 2.2 are exceeded.
"Borrowing Request" means a request executed by a Responsible Officer of
Borrower requesting a Borrowing and delivered to Agent in substantially the form
of Exhibit D-1.
"Business Day" means any day other than Saturday, Sunday, and any other day
that commercial banks are authorized by applicable Laws to be closed in Texas.
"Capital Lease" means any capital lease or sublease that is required by
GAAP to be capitalized on a balance sheet.
"Cash Equivalents" means Investments described in Sections 8.3(a) through
(e).
08/18/97
["Cash Flow" deleted as defined term.]
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S)(S)9601 et seq.
"Classified Assets" means, for Matrix Bank and at any time, all (a) assets
of Matrix Bank that are classified as "substandard," "doubtful," or "loss" by
FDIC, OTS, or any other Tribunal with regulatory authority over Matrix Bank, (b)
assets that are otherwise subject to special credit quality supervision by
Matrix Bank or the financial institution through which Matrix Bank claims an
interest in the particular asset, (c) Other Real Estate Owned, and (d) Other
Impaired Assets.
"Closing Date" means the date agreed to by Borrower and Agent for the
initial Borrowings under this agreement, which date may not be (a) before the
conditions precedent for those initial Borrowings have been satisfied or (b), if
at all, later than March 31, 1997.
08/18/97
"CMLTD" means, for Borrower alone and at any time, the current maturities
of long-term Debt except that for purposes of this definition (a) Debt of Matrix
Financial and guaranties of that Debt by Borrower are excluded and (b) through
June 30, 1998, the current maturities of the Debt described in
2
CREDIT AGREEMENT
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Item 3 on Schedule 6.7 (as it may be renewed) shall be limited to the greater of
either (i) $42,000 or (ii) the actual amount of annual amortization required by
the terms of that Debt as it may be renewed.
"Collateral" is defined in Section 4.2.
06/29/98
"Commercial Loan" means a loan that is not a one- to four-family
residential loan, nor an installment loan to an individual, nor the portion of a
loan guaranteed by the Small Business Administration, but is a loan for
commercial purposes, or a loan secured by chattel or a mortgage note on non one-
to four-family residential real property.
"Commitment" means, at any time and for any Lender, the amounts stated
beside that Lender's name on the most-recently amended Schedule 2 for the
Revolving Facility (which amount is subject to reduction and cancellation
pursuant to this agreement) and for the Term Loan.
"Commitment Percentage" means, for any Lender, the proportion (stated as a
percentage) that its Commitment bears to the total Commitments of all Lenders.
"Companies" means, at any time, Borrower and each of its Subsidiaries.
"Compliance Certificate" means a certificate executed by a Responsible
Officer of Borrower and delivered to Agent in substantially the form of Exhibit
D-2.
"Current Financials" means either (a) the Companies' Financials for the
year ended December 31, 1995, and for the 11 months ended November 30, 1996, or
(b) at any time after the Companies' annual Financials are first delivered under
Section 7.1, the Companies' annual Financials then most recently delivered to
Agent and subsequent quarterly Financials then most recently delivered to Agent.
"Debt" means, for any Person and without duplication (a) all obligations
required by GAAP to be classified upon that Person's balance sheet as
liabilities, (b) liabilities secured (or for which the holder of the liabilities
has an existing Right, contingent or otherwise, to be so secured) by any Lien
existing on property owned or acquired by that Person, (c) obligations under
Capital Leases, and (d) all guaranties, endorsements, and other contingent
obligations with respect to Debt of others or in respect of any Employee Plan.
"Debtor Laws" means the Bankruptcy Code of the United States of America and
all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
or similar Laws affecting creditors' Rights.
"Default" is defined in Section 10.1.
"Default Rate" means, for any day, an annual interest rate equal to the
lesser of either (a) the Fed-Funds Rate plus 5% or (b) the Maximum Rate.
"Determining Lenders" means, at any time, any combination of Lenders whose
(a) Termination Percentages total at least 66 2/3% at any time on or after the
Actual-Termination Date, or (b) Commitment Percentages total at least 66 2/3% at
all other times.
"Distribution" means, at any time and with respect to any shares of any
capital stock or other equity securities issued by a Person, (a) the retirement,
redemption, purchase, or other acquisition for value of those securities, (b)
the declaration or payment of any dividend with respect to those securities, (c)
any loan or advance by that Person to, or other investment by that Person in,
the holder of any of those securities, and (d) any other payment by that Person
with respect to those securities.
"Employee Plan" means any employee-pension-benefit plan (a) covered by
Title IV of ERISA and established or maintained by Borrower or any ERISA
Affiliate (other than a Multiemployer Plan) or
3
CREDIT AGREEMENT
----------------
(b) established or maintained by Borrower or any ERISA Affiliate, or to which
Borrower or any ERISA Affiliate contributes, under the Laws of any foreign
country.
"Environmental Law" means any applicable Law that relates to protection of
the environment or to the regulation of any Hazardous Substances, including,
without limitation, CERCLA, the Hazardous Materials Transportation Act (49
U.S.C. (S) 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
(S) 6901 et seq.), the Clean Water Act (33 U.S.C. (S) 1251 et seq.), the Clean
Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. (S) 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. (S) 136 et seq.), the Emergency Planning and Community Right-to-
Know Act (42 U.S.C. (S) 11001 et seq.), the Safe Drinking Water Act (42 U.S.C.
(S) 201 and (S) 300f et seq.), the Rivers and Harbors Act (33 U.S.C. (S) 401 et
seq.), the Oil Pollution Act (33 U.S.C. (S) 2701 et seq.), analogous state and
local Laws, and any analogous future enacted or adopted Laws.
11/12/98
"Equi-Mor" means Equi-Mor Holdings, Inc., a Nevada corporation and wholly-
owned Subsidiary of Matrix Financial.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any Person that, for purposes of Title IV of ERISA,
is a member of Borrower's controlled group or is under common control with
Borrower within the meaning of Section 414 of the IRC.
08/18/97
["Excess Distributions" deleted as a definition.]
"FDIC" means the Federal Deposit Insurance Corporation.
"Fed-Funds Rate" means, for any day, the annual interest rate (rounded
upwards, if necessary, to the nearest 0.01%) determined by Agent to be either
(a) the weighted average of the rates on overnight-federal-funds transactions
with member banks of the Federal Reserve System arranged by federal-funds
brokers for that day (or, if not a Business Day on the preceding Business Day)
as published by the Federal Reserve Bank of New York (as published by ▇▇▇▇▇▇-
▇▇▇▇▇▇, page 73, utilizing the Fed-Effective Rate), or (b) if not so published
for any day, the average of the quotations for that day on those transactions
received by Agent from three federal-funds brokers of recognized standing it may
select.
"Financials" of a Person means balance sheets, profit and loss statements,
reconciliations of capital and surplus, and statements of cash flow prepared (a)
according to GAAP (subject to year end audit adjustments with respect to interim
Financials) and (b) except as stated in Section 1.4, in comparative form to
prior year-end figures or corresponding periods of the preceding fiscal year or
other relevant period, as applicable.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable from time to time,
as from time to time superseded by regulatory accounting principles applicable
to Matrix Bank and Sterling Trust Company, consistently applied.
"Government Securities" means (to the extent they mature within one year
from the date in question) readily marketable (a) direct full faith and credit
obligations of the United States of America or obligations guaranteed by the
full faith and credit of the United States of America, and (b) obligations of an
agency or instrumentality of, or corporation owned, controlled, or sponsored by,
the United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.
"Guaranty" means a Guaranty in substantially the form of Exhibit B.
4
CREDIT AGREEMENT
----------------
"Hazardous Substance" means any substance that is designated, defined,
classified, or regulated as a hazardous waste, hazardous material, pollutant,
contaminant, explosive, corrosive, flammable, infectious, carcinogenic,
mutagenic, radioactive, or toxic or hazardous substance under any Environmental
Law, including, without limitation, any hazardous substance within the meaning
of (S) 101(14) of CERCLA.
"Hedge Contract" means, for any Person, any present or future, whether
master or single, agreement, document or instrument providing for (or
constituting an agreement to enter into) (a) commodity ▇▇▇▇▇▇ in the normal
course of business in accordance with prior practices of that Person before the
date of this agreement for purposes of hedging material purchases, (b) foreign-
currency purchases and swaps, (c) interest-rate swaps, and (d) interest-rate-
hedging products.
"Interest Expense" means -- for any Person, for any period, and without
duplication -- all interest on Debt, whether paid in cash or accrued as a
liability and payable in cash during any subsequent period (including the
interest component of Capital Leases), as determined by GAAP, and premium or
penalty for repayment, redemption, or repurchase of Debt.
"Investment" means, in respect of any Person, any loan, advance, extension
of credit, or capital contribution to that Person, any investment in that
Person, or any purchase or commitment to purchase any equity securities or Debt
issued by that Person or substantially all of the assets or a division or other
business unit of that Person.
"IRC" means the Internal Revenue Code of 1986.
"Laws" means all applicable statutes, laws, treaties, ordinances, rules,
regulations, orders, writs, injunctions, decrees, judgments, opinions, and
interpretations of any Tribunal.
"Lender Lien" means any present or future first-priority Lien securing the
Obligation and assigned, conveyed, and granted to or created in favor of Agent
for the benefit of Lenders under the Loan Documents.
"Lenders" means the financial institutions (including, without limitation,
Agent in respect of its share of Borrowings) named on Schedule 2 or on the most-
recently-amended Schedule 2, if any, delivered by Agent under this agreement,
and, subject to this agreement, their respective successors and permitted
assigns (but not any Participant who is not otherwise a party to this
agreement).
"Lien" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
arrangement for a creditor's claim to be satisfied from assets or proceeds prior
to the claims of other creditors or the owners.
"Litigation" means any action by or before any Tribunal.
"Loan Documents" means (a) this agreement, certificates and reports
delivered under this agreement, and exhibits and schedules to this agreement,
(b) all agreements, documents, and instruments in favor of Agent or Lenders (or
Agent on behalf of Lenders) ever delivered under this agreement or otherwise
delivered in connection with any of the Obligation, and (c) all renewals,
extensions, and restatements of, and amendments and supplements to, any of the
foregoing.
"Material-Adverse Event" means any circumstance or event that, individually
or collectively, is reasonably expected to result (at any time before the
Commitments under this agreement are fully canceled or terminated and the
Obligation is fully paid and performed) in any (a) impairment of any Company's
ability to perform any of its payment or other material obligations under any
Loan Document or (ii) the ability of Agent or any Lender to enforce any of those
obligations or any of their respective Rights under the Loan Documents, (b)
material and adverse effect on Borrower's individual financial condition or the
Companies' consolidated financial condition as represented to Lenders in the
Current Financials most recently delivered before the date of this agreement,
(c) material and adverse effect on any Collateral, or (d) Default or Potential
Default.
5
CREDIT AGREEMENT
----------------
"Material Agreement" means, for any Person, any agreement to which that
Person is a party, by which that Person is bound, or to which any assets of that
Person may be subject, and that is not cancelable by that Person upon less than
30-days notice without liability for further payment other than nominal penalty,
and the default under which or cancellation or forfeiture of which would be a
Material-Adverse Event.
"Matrix Bank" means Matrix Capital Bank, a federal savings bank formerly
named ▇▇▇▇ ▇▇▇ Savings Bank and a wholly owned Subsidiary of Borrower.
"Matrix Financial" means Matrix Financial Services Corporation, an Arizona
corporation and wholly owned Subsidiary of Borrower.
"Matrix Financial Loan Agreement" means the Amended and Restated Loan
Agreement dated as of January 31, 1997, between Matrix Financial, certain
lenders, and Bank One, Texas, N.A., as Agent for Lenders.
06/29/98
"Maturity Date" means June 30, 2001.
"Maximum Amount" and "Maximum Rate" respectively mean, for any day and for
any Lender, the maximum non-usurious amount and the maximum non-usurious rate of
interest that, under applicable Law, the Lender is permitted to contract for,
charge, take, reserve, or receive on its portion of the Obligation.
"Multiemployer Plan" means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the IRC (or any similar type
of plan established or regulated under the Laws of any foreign country) to which
Borrower or any ERISA Affiliate is making, or has made, or is accruing, or has
accrued, an obligation to make contributions.
"Net Charge Offs" means, for Matrix Bank and at any time, the sum of its
"Gross Charge Offs" minus its "Recoveries," as those items are reflected in its
quarterly call reports.
"Net Income" means, for any period and any Person, the amount that should
in accordance with GAAP be reflected on that Person's income statement as net
income for that period after deduction of any minority interests.
"Net Worth" means, for any period and any Person, that Person's
stockholder's equity as determined under GAAP.
"Notes" means the Revolving Notes and the Term Notes.
"Obligation" means all (a) present and future indebtedness, obligations,
and liabilities of Borrower to Agent or any Lender and related to any Loan
Document, whether principal, interest, fees, costs, attorneys' fees, or
otherwise, (b) all present and future indebtedness, obligations, and liabilities
of Borrower to Agent or any Lender in respect of any Hedge Contract, (c) amounts
that would become due but for operation of 11 U.S.C. (S)(S) 502 and 503 or any
other provision of Title 11 of the United States Code, and all renewals,
extensions, and modifications of any of the foregoing, and (d) pre- and post-
maturity interest on any of the foregoing, including, without limitation, all
post-petition interest if any Company voluntarily or involuntarily files for
protection under any Debtor Law.
"Other Impaired Assets" means, for Matrix Bank and at any time, assets
(excluding Other Real Estate Owned) acquired by Matrix Bank through foreclosure
or other realization upon collateral or rearrangement, settlement, or
satisfaction of debt.
"Other Real Estate Owned" means, for Matrix Bank and at any time, each of
its ownership interests (including any option in its favor and any put or
similar agreement requiring it to purchase but excluding any Lien constituting a
bona fide encumbrance to secure obligations owed to it) in any real property not
currently
6
CREDIT AGREEMENT
----------------
used solely as either a principal banking house, an office, branch, parking
facility, remote manned or unmanned teller facility, or real estate acquired for
development in the ordinary course of business and that was not acquired through
foreclosure or other realization upon collateral or rearrangement, settlement,
or satisfaction of debt.
"OTS" means the Office of Thrift Supervision.
"Participant" is defined in Section 12.13.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Debt" is defined in Section 8.1.
"Permitted Liens" is defined in Section 8.2.
"Permitted Investments" is defined in Section 8.3.
"Person" means any individual, entity, or Tribunal.
"Potential Default" means any event's occurrence or any circumstance's
existence that would (upon any required notice, time lapse, or both) become a
Default.
"Principal Debt" means, at any time, the outstanding principal balance of
all Borrowings.
"Purchaser" is defined in Section 12.14.
"Refinanced Debt" means the Debt described on Schedule 6.7 owed to Banker's
Bank of the West, which Debt must be paid in full (and all commitments to extend
further Debt canceled) as a condition precedent to, or concurrent with, the
initial Borrowing under this agreement.
"Representatives" means representatives, officers, directors, employees,
attorneys, and agents.
"Responsible Officer" means (a) the chairman, president, chief executive
officer, any vice president, or chief financial officer of Borrower to the
extent that such officer's name, title, and signature have been certified to
Agent by the secretary or an assistant secretary of Borrower or (b) any other
officer designated as a "Responsible Officer" in writing to Administrative Agent
by any officer in clause (a) preceding.
"Revolving Facility" is defined in the recitals to this agreement.
"Revolving Note" means one of the promissory notes substantially in the
form of Exhibit A-2.
"Rights" means rights, remedies, powers, privileges, and benefits.
"Solvent" means, for any Person, that (a) the aggregate fair market value
of its assets exceeds its liabilities, (b) it has sufficient cash flow to enable
it to pay its Debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
06/30/99
"Stated-Termination Date" means the earlier of either (a) June 30, 2000, or
(b) 30 days after the date on which at least 90% of the total Commitments for
the Revolving Facility have been funded under Section 2.2.
06/30/99
"Subordinated Debentures" means the Junior Subordinated Debentures proposed
to be issued by Borrower in the total principal amount of not more than
$31,625,000 under the Indenture proposed to be entered into by Borrower and
State Street Bank and Trust Company as Trustee, as described in the Form S-1
filed by Borrower with the Securities and Exchange Commission via ▇▇▇▇▇ on June
1, 1999.
06/30/99
7
CREDIT AGREEMENT
----------------
"Subordinated Debt" means, at any time (a) Debt existing on June 30, 1999,
that is by its terms subordinated to the payment of the Obligation, (b) the
Debt evidenced by the Subordinated Debentures, and (c) Debt of Borrower that (i)
is subject to subordination, payment blockage, and standstill provisions at
least as favorable to Lenders as are applicable to the Subordinated Debentures,
(ii) does not subject Borrower to representations, covenants, events of default,
and other provisions significantly more onerous to Borrower than those contained
in the Subordinated Debentures, (iii) does not have any scheduled or mandatory
principal or sinking fund payment due before 180 days after the Maturity Date,
and (iv) is upon terms and conditions otherwise reasonably acceptable to
Determining Lenders.
"Subsidiary" of any Person means any entity of which at least 50% (in
number of votes) of the stock (or equivalent interests) is owned of record or
beneficially, directly or indirectly, by that Person.
"Taxes" means, for any Person, taxes, assessments, or other governmental
charges or levies imposed upon it, its income, or any of its properties,
franchises, or assets.
"Term Loan" is defined in the recitals to this agreement.
"Term Note" means one of the promissory notes substantially in the form of
Exhibit A-1.
"Termination Percentage" means, at any time for any Lender, the proportion
(stated as a percentage) that its Principal Debt bears to the total Principal
Debt.
"Total Capital" means, for Matrix Bank and at any time, the sum of (a)
stated par value of its common stock, (b) stated par value of its perpetual
preferred stock, if any, (c) its undivided profits, surplus, and retained
earnings, (d) its account denominated "loan loss reserve" or "reserve for loan
and lease losses," plus (e) its reserve for contingencies.
"Total Loans" means, for Matrix Bank and at any time, the sum of all of its
outstanding loans, leases, and advances, net of unearned income.
"Tribunal" means any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel, or (c)
central bank.
"UCC" means the Uniform Commercial Code as enacted in Texas or other
applicable jurisdictions.
1.2 Time References. Unless otherwise specified, in the Loan Documents
---------------
(a) time references (e.g., 10:00 a.m.) are to time in Dallas, Texas, and (b) in
calculating a period from one date to another, the word "from" means "from and
including" and the word "to" or "until" means "to but excluding."
1.3 Other References. Unless otherwise specified, in the Loan Documents
----------------
(a) where appropriate, the singular includes the plural and vice versa, and
words of any gender include each other gender, (b) heading and caption
references may not be construed in interpreting provisions, (c) monetary
references are to currency of the United States of America, (d) section,
paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Document in which they are used, (e) references to "telefax,"
"telecopy," "facsimile," "fax," or similar terms are to facsimile or telecopy
transmissions, (f) references to "including" mean including without limiting the
generality of any description preceding that word, (g) the rule of construction
that references to general items that follow references to specific items as
being limited to the same type or character of those specific items is not
applicable in the Loan Documents, (h) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers, and
permitted assigns, (i) references to any Law include every amendment or
supplement to it, rule and regulation adopted under it, and successor or
replacement for it, and (j) references to any Loan Document or other document
include every renewal and extension of it, amendment and supplement to it, and
replacement or substitution for it.
8
CREDIT AGREEMENT
----------------
1.4 Accounting Principles. Unless otherwise specified, in the Loan
---------------------
Documents (a) GAAP in effect on the date of this agreement determines all
accounting and financial terms and compliance with all financial covenants, (b)
otherwise, all accounting principles applied in a current period must be
comparable in all material respects to those applied during the preceding
comparable period, and (c) while Borrower has any consolidated Subsidiaries (i)
all accounting and financial terms and compliance with reporting covenants must
be on a consolidating and consolidated basis, as applicable, and (ii) compliance
with financial covenants must be on a consolidated basis.
SECTION 2 BORROWINGS. Subject to the provisions in the Loan Documents, each
--------- ----------
Lender severally and not jointly agrees to extend credit to Borrower under the
Term Loan and the Revolving Facility in accordance with the following
provisions.
2.1 Term Loan. Each Lender severally but not jointly agrees to lend to
---------
Borrower that Lender's Commitment Percentage of the Term Loan in a single
Borrowing on the Closing Date.
2.2 Revolving Facility. Each Lender severally but not jointly agrees to
------------------
lend to Borrower that Lender's Commitment Percentage of requested Borrowings
under the Revolving Facility, which Borrower may borrow, repay, and reborrow
under this agreement subject to the following conditions:
. Each Borrowing may only occur on a Business Day on or after the
Closing Date and before the Actual-Termination Date.
. Each Borrowing may only be $500,000 or a greater integral multiple of
$100,000.
06/29/98
. The total of the Principal Debt of the Revolving Facility and of the
Term Loan may never exceed the lesser of either (i) the total of (a)
the Principal Debt of the Term Loan plus (b) the total Commitments for
the Revolving Facility or (ii) the Borrowing Base.
. The total Principal Debt owed to any Lender may never exceed that
Lender's total Commitments.
2.3 Borrowing Procedure. The following procedures apply to Borrowings:
-------------------
(a) Borrowing Request. Borrower may request a Borrowing by making or
-----------------
delivering a Borrowing Request to Agent, which is irrevocable and binding
on Borrower and must be received by Agent no later than 11:00 a.m. on the
Business Day before the requested Borrowing Date. Agent shall promptly on
the day received notify each Lender of any Borrowing Request.
(b) Funding. Each Lender shall remit its Commitment Percentage of
-------
each requested Borrowing to Agent's principal office in Dallas, Texas, in
funds that are available for immediate use by Agent by 2:00 p.m. on the
applicable Borrowing Date. Subject to receipt of those funds, Agent shall
(unless to its actual knowledge any of the applicable conditions precedent
have not been satisfied by Borrower or waived by the requisite Lenders
under Section 12.10) make those funds available to Borrower by depositing
the funds in Borrower's account with Agent.
(c) Funding Assumed. Absent contrary written notice from a Lender,
---------------
Agent may assume that each Lender has made its Commitment Percentage of the
requested Borrowing available to Agent on the applicable Borrowing Date,
and Agent may, in reliance upon such assumption (but shall not be required
to), make available to Borrower a corresponding amount. If a Lender fails
to make its Commitment Percentage of any requested Borrowing available to
Agent on the applicable Borrowing Date, Agent may recover the applicable
amount on demand (i) from that Lender together with interest, commencing on
the Borrowing Date and ending on (but excluding) the date Agent recovers
the amount from that Lender, at an annual interest rate equal to the Fed-
Funds Rate, or (ii) if that Lender fails to pay its amount upon demand,
then from Borrower, together with interest,
9
CREDIT AGREEMENT
----------------
commencing on the Borrowing Date and ending on (but excluding) the date
Agent recovers the amount from Borrower, at an annual interest rate equal
to the Base Rate No Lender is responsible for the failure of any other
Lender to make its Commitment Percentage of any Borrowing available as
required by Section 2.3(b). However, failure of any Lender to make its
Commitment Percentage of any Borrowing so available does not excuse any
other Lender from making its Commitment Percentage of any Borrowing so
available.
2.4 Termination. Borrower may (upon giving at least ten Business Days
-----------
prior written and irrevocable notice to Agent) terminate all or part of the
Revolving Facility. Each partial termination must be in an amount of not less
than $500,000 or a greater integral multiple of $100,000 and must be ratable in
accordance with each Lender's Commitment Percentage. At the time of any
termination, Borrower shall pay to Agent, for the account of each Lender, as
applicable, any amounts that may then be due under Section 3.4, all accrued and
unpaid fees under this agreement, and the interest attributable to the amount of
that reduction. Any part of the Commitments for the Revolving Facility that are
terminated may not be reinstated.
SECTION 3 PAYMENT TERMS.
--------- -------------
3.1 Notes and Payments.
------------------
(a) Notes. The Principal Debt under the Term Loan is evidenced by
-----
the Term Notes, one payable to each Lender in the stated amount of its
Commitment for the Term Loan. Principal Debt under the Revolving Facility
is evidenced by the Revolving Notes, one payable to each Lender in the
stated amount of its Commitment for the Revolving Facility.
(b) Payment. Borrower must make each payment and prepayment on the
-------
Obligation to Agent's principal office in Dallas, Texas in funds that are
(i) immediately available by 1:00 p.m. on the day due (otherwise, but
subject to Section 3.8, those funds continue to accrue interest as if they
were received on the next Business Day and (ii) not (in Agent's or any
Lender's good faith judgment) subject to any reasonable grounds for the
payment or prepayment lawfully to be required to be rescinded, restored, or
returned for any reason (unless Agent or Required Lenders agree to
otherwise accept such payment or prepayment).
(c) Payment Assumed. Unless Agent has received notice from Borrower
---------------
prior to the date on which any payment is due under this agreement that
Borrower will not make that payment in full, Agent may assume that Borrower
has made the full payment due and Agent may, in reliance upon that
assumption, cause to be distributed to each Lender on that date the amount
then due to each Lender. If and to the extent Borrower does not make the
full payment due to Agent, each Lender shall repay to Agent on demand the
amount distributed to that Lender by Agent together with interest for each
day from the date that Lender received payment from Agent until the date
that Lender repays Agent (unless such repayment is made on the same day as
such distribution), at an annual interest rate equal to the Fed-Funds Rate.
3.2 Principal and Interest Payments.
-------------------------------
(a) Term Loan.
---------
06/30/99
. The Principal Debt of the Term Loan is payable in seven
consecutive quarterly installments equal to 1/28th of the amount
of that Principal Debt on July 1, 1999, payable on the last day
of each March, June, September, and December (commencing
September 30, 1999), with a final installment in the amount of
the unpaid Principal Debt of the Term Loan due on the Maturity
Date.
10
CREDIT AGREEMENT
----------------
. Interest on the Principal Debt of the Term Loan is due and
payable as it accrues on each principal payment date described in
the preceding sentence.
(b) Revolving Facility.
------------------
. Until the Actual-Termination Date, interest on the Principal Debt
of the Revolving Facility is due and payable as it accrues on the
15th day of each calendar month (commencing on the first such
date that follows the Closing Date).
. Before the Actual-Termination Date, Borrower may prepay and,
subject to the terms of the Loan Documents, reborrow the
Principal Debt of the Revolving Facility.
. If the effective date that Lenders' commitments to lend under
this agreement are fully canceled or terminated occurs before the
Stated-Termination Date, then the Principal Debt of the Revolving
Facility, together with all accrued and unpaid interest on it, is
due and payable on the Actual-Termination Date.
. If the Stated-Termination Date occurs before the effective date
that Lenders' commitments to lend under this agreement are fully
canceled or terminated, then (i) the Principal Debt of the
Revolving Facility is payable in consecutive quarterly
installments, each equal to 1/28th of the Principal Debt of the
Revolving Facility on the Stated-Termination Date, on the last
day of each February, May, August, and November (commencing on
the first of those dates that follows the Stated-Termination
Date), with a final installment in the amount of the unpaid
Principal Debt of the Revolving Facility due on the Maturity
Date, and (ii) interest on the Principal Debt of the Revolving
Facility is due and payable as it accrues on each principal
payment date described in clause (i) preceding.
3.3 Voluntary Prepayments. In addition to voluntary prepayments that
---------------------
Borrower may make under the Revolving Facility before the Actual-Termination
Date, Borrower may prepay, without penalty and in whole or part, the Principal
Debt of the Term Loan or the Principal Debt of the Revolving Facility during its
term period so long as (a) Borrower gives notice of the prepayment to Agent ten
Business Days before the date on which the prepayment is to be made (and Agent
will promptly notify Lenders of any such notice), (b) the notice by Borrower
specifies the amount to be prepaid, and (c) each voluntary partial prepayment
must be equal to the lesser of either the applicable Principal Debt or a
principal amount of not less than $500,000 or a greater integral multiple of
$100,000, plus accrued interest on the amount prepaid to the date of the
prepayment. Those voluntary prepayments shall be applied to installments of
Principal Debt of the Term Loan or the term portion of the Revolving Facility,
as the case may be, in inverse order of maturity.
08/18/97
3.4 Mandatory Prepayments. Within five days after any Borrowing Excess
---------------------
occurs, Borrower shall make a mandatory prepayment of Principal Debt necessary
to eliminate that Borrowing Excess, which shall, if applicable, be applied to
installments of Principal Debt of the Term Loan or the term portion of the
Revolving Facility, as the case may be, in inverse order of maturity.
3.5 Interest Rates. The Principal Debt, except as provided in the next
--------------
sentence, bears interest at the Base Rate. If lawful, all past-due Principal
Debt and past-due interest accruing on any of the foregoing bears interest from
the date due (stated or by acceleration) at the Default Rate until paid,
regardless whether payment is made before or after entry of a judgment.
3.6 Interest Recapture. If the designated interest rate applicable to any
------------------
Borrowing exceeds the Maximum Rate, the interest rate on that Borrowing is
limited to the Maximum Rate, but any subsequent reductions in the designated
rate shall not reduce the interest rate thereon below the Maximum Rate until the
total amount of accrued interest the amount of interest that would have accrued
if that designated rate had always been in effect. If at maturity (stated or by
acceleration), or at final payment of the Notes, the total
11
CREDIT AGREEMENT
----------------
interest paid or accrued is less than the interest that would have accrued if
the designated rates had always been in effect, then, at that time and to the
extent permitted by Law, Borrower shall pay an amount equal to the difference
between (a) the lesser of the amount of interest that would have accrued if the
designated rates had always been in effect and the amount of interest that would
have accrued if the Maximum Rate had always been in effect, and (b) the amount
of interest actually paid or accrued on the Notes.
3.7 Interest Calculations. Interest will be calculated on the basis of
---------------------
actual number of days (including the first day but excluding the last day)
elapsed but computed as if each calendar year consisted of 360 days (unless the
calculation would result in an interest rate greater than the Maximum Rate, in
which event interest shall be calculated on the basis of a year of 365 or 366
days, as the case may be). All interest rate determinations and calculations by
Agent are conclusive and binding absent manifest error.
3.8 Maximum Rate. Regardless of any provision contained in any Loan
------------
Document, no Lender is entitled to contract for, charge, take, reserve, receive,
or apply, as interest on all or any part of the Obligation, any amount in excess
of the Maximum Rate, and, if Lenders ever do so, then any excess shall be
treated as a partial prepayment of principal and any remaining excess shall be
refunded to Borrower. In determining if the interest paid or payable exceeds
the Maximum Rate, Borrower and Lenders shall, to the maximum extent permitted
under applicable Law, (a) treat all Borrowings as but a single extension of
credit (and Lenders and Borrower agree that is the case and that provision in
this agreement for multiple Borrowings is for convenience only), (b)
characterize any nonprincipal payment as an expense, fee, or premium rather than
as interest, (c) exclude voluntary prepayments and their effects, and (d)
amortize, prorate, allocate, and spread the total amount of interest throughout
the entire contemplated term of the Obligation. However, if the Obligation is
paid in full before the end of its full contemplated term, and if the interest
received for its actual period of existence exceeds the Maximum Amount, Lenders
shall refund any excess (and Lenders may not, to the extent lawful, be subject
to any penalties provided by any Laws for contracting for, charging, taking,
reserving, or receiving interest in excess of the Maximum Amount). If the Laws
of the State of Texas are applicable for purposes of determining the "Maximum
Rate" or the "Maximum Amount," then those terms mean the "indicated rate
ceiling" from time to time in effect under Article 5069-1.04, Title 79, Revised
Civil Statutes of Texas, as amended. Borrower agrees that Chapter 15, Subtitle
79, Revised Civil Statutes of Texas, 1925, as amended (which regulates certain
revolving credit loan accounts and revolving triparty accounts), does not apply
to the Obligation.
3.9 Order of Application.
--------------------
(a) No Default. If no Default or Potential Default exists, then any
----------
payment shall be applied to the Obligation (except as otherwise
specifically provided in the Loan Documents) in the order and manner as
Borrower directs.
(b) Default. If a Default or Potential Default exists or if Borrower
-------
fails to give direction, any payment (including proceeds from the exercise
of any Rights) shall be applied in the following order: (i) To all fees
and expenses for which Agent or Lenders have not been paid or reimbursed in
accordance with the Loan Documents (and if such payment is less than all
unpaid or unreimbursed fees and expenses, then the payment shall be paid
against unpaid and unreimbursed fees and expenses in the order of
incurrence or due date); (ii) to accrued interest on the Principal Debt;
(iii) to the remaining Principal Debt in the order as Determining Lenders
may elect; and (iv) to the remaining Obligation in the order and manner
Determining Lenders deem appropriate.
3.10 Distributions to Lenders. Unless otherwise specified above, each
------------------------
payment and prepayment shall be distributed to Lenders ratably in accordance
with their respective Commitment Percentages or Termination Percentages, as
applicable.
3.11 Sharing of Payments, Etc. If any Lender obtains any payment or
------------------------
prepayment with respect to the Obligation (whether voluntary, involuntary, or
otherwise, including, without limitation, as a result of exercising its Rights
under Section 3.12) that exceeds the part of that payment or prepayment that it
is then
12
CREDIT AGREEMENT
----------------
entitled to receive under the Loan Documents, then that Lender shall purchase
from the other Lenders participations that will cause the purchasing Lender to
share the excess payment or prepayment ratably with each other Lender. If all or
any portion of any excess payment or prepayment is subsequently recovered from
the purchasing Lender, then the purchase shall be rescinded and the purchase
price restored to the extent of the recovery. Borrower agrees that any Lender
purchasing a participation from another Lender under this section may, to the
fullest extent permitted by Law, exercise all of its Rights of payment
(including the Right of offset) with respect to that participation as fully as
if that Lender were the direct creditor of Borrower in the amount of that
participation.
3.12 Offset. If a Default exists, each Lender is entitled to exercise (for
------
the benefit of all Lenders in accordance with Section 3.11) the Rights of offset
and banker's Lien against each and every account and other property, or any
interest therein, that any Company may now or hereafter have with, or which is
now or hereafter in the possession of, that Lender to the extent of the full
amount of the Obligation owed (directly or participated) to it.
3.13 Capital Adequacy. If any change in any present Laws, any change in
----------------
the interpretation or application of any present Law, or any future Law
regarding capital adequacy, or if compliance by any Lender with any request,
directive, or requirement imposed in the future by any Tribunal regarding
capital adequacy, or if any change in its written policies or in the risk
category of this transaction, in any of the foregoing events or circumstances,
reduces the rate of return on its capital as a consequence of its obligations
under this agreement to a level below that which it otherwise could have
achieved (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by it to be material (and it may, in determining
the amount, utilize reasonable assumptions and allocations of costs and expenses
and use any reasonable averaging or attribution method), then (unless the effect
is already reflected in the rate of interest then applicable under this
agreement) Agent or that Lender (through Agent) shall notify Borrower and
deliver to Borrower a certificate setting forth in reasonable detail the
calculation of the amount necessary to compensate it (which certificate is
conclusive and binding absent manifest error), and Borrower shall pay that
amount to Agent or that Lender within five Business Days after demand. The
provisions of and undertakings and indemnification in this Section 3.13 shall
survive the satisfaction and payment of the Obligation and termination of this
agreement.
3.14 Foreign Lenders, Participants, and Purchasers. Each Lender,
---------------------------------------------
Participant (by accepting a participation interest under this agreement), and
Purchaser (by executing an Assignment) that is not organized under the Laws of
the United States of America or one of its states (a) represents to Agent and
Borrower that (i) no Taxes are required to be withheld by Agent or Borrower with
respect to any payments to be made to it in respect of the Obligation and (ii)
it has furnished to Agent and Borrower two duly completed copies of either U.S.
Internal Revenue Service Form 4224, Form 1001, Form W-8, or any other form
acceptable to Agent that entitles it to exemption from U.S. federal withholding
Tax on all interest payments under the Loan Documents, and (b) covenants to (i)
provide Agent and Borrower a new Form 4224, Form 1001, Form W-8, or other form
acceptable to Agent upon the expiration or obsolescence of any previously
delivered form according to Law, duly executed and completed by it, and (ii)
comply from time to time with all Laws with regard to the withholding Tax
exemption. If any of the foregoing is not true or the applicable forms are not
provided, then Borrower and Agent (without duplication) may deduct and withhold
from interest payments under the Loan Documents United States federal income Tax
at the full rate applicable under the IRC.
06/29/98
3.15 Non-Use Fee. From and after October 1, 1998, Borrower shall pay to
-----------
Agent a non-use fee for Lenders according to each Lender's Commitment
Percentage. The fee is payable as it accrues on the last day of each March,
June, September, and December (commencing on December 31, 1998) and on the
Actual-Termination Date. Each payment of the fee is equal to the following,
determined for the calendar quarter (or portion of a calendar quarter commencing
on the date of this agreement or ending on the Actual-Termination Date)
preceding and including the date it is due: From October 1, 1998, until the
Actual-Termination Date, the product of (a) 0.25% times (b) the amount by which
the average-daily total Commitments for only the Revolving Facility exceed the
sum of the
average-daily Principal Debt under only the Revolving Notes, times (c) a
fraction with the number of days in the applicable quarter or portion of it as
the numerator and 365 or 366, as the case may be, as the denominator.
SECTION 4 SECURITY.
--------- --------
4.1 Guaranty. Solely as an inducement to Lenders to extend credit under
--------
this agreement to Borrower and not in any way as a condition to or inducement to
any other extensions of credit by any Lender to any other Company, Borrower
shall cause each of its present and future Subsidiaries (other than Matrix Bank
and Sterling Trust Company) to unconditionally guarantee the full payment of the
Obligation by execution and delivery of a Guaranty.
4.2 Collateral. Borrower shall cause full payment and performance of the
----------
Obligation to be secured by Lender Liens on 100% of the present and future,
issued and outstanding common stock of Matrix Bank now or in the future owned by
Borrower. The foregoing collateral, together with the additional collateral
ever assigned, conveyed, granted, or delivered for any of the Obligation under
any Loan Document, if any, and the cash and non-cash proceeds of all of the
foregoing, is referred to as the "Collateral."
4.3 Further Assurances. Borrower shall (and shall cause each other
------------------
appropriate Company to) perform the acts, duly authorize, execute, acknowledge,
deliver, file, and record any additional writings, and pay all filings fees and
costs as Agent or Determining Lenders may reasonably deem appropriate or
necessary to perfect and maintain the Lender Liens and preserve and protect the
Rights of Agent and Lenders under any Loan Document so long as those additional
acts and writings do not increase Borrower's obligations or diminish its Rights
provided for in the Loan Documents.
4.4 Release of Collateral. Upon Borrower's written request and at
---------------------
Borrower's cost and expense, Agent shall cause the Lender Liens to be released
if (a) no Lender has any commitment to extend credit under any Loan Document,
(b) the Obligation has been fully paid and performed, and (c) neither Agent nor
any Lender in good faith believes that there are reasonable grounds for any
payment or prepayment under any Loan Document lawfully to be required to be
rescinded, restored, or returned for any reason.
SECTION 5 CONDITIONS PRECEDENT. No Lender is obligated to fund its part of
--------- --------------------
any Borrowing unless Agent has received all of the documents and items described
on Schedule 5. In addition, no Lender is obligated to fund its part of any
Borrowing unless on the applicable Borrowing Date (and after giving effect to
the requested Borrowing): (a) Agent has timely received a Borrowing Request; (b)
all of the representations and warranties of Borrower in the Loan Documents are
true and correct in all material respects (unless they speak to a specific date
or are based on facts which have changed by transactions contemplated or
permitted by this agreement); (c) no Default or Potential Default exists; (d)
the funding of the Borrowing is permitted by Law and does not cause a Borrowing
Excess; (e) if reasonably requested by Agent, it has received evidence
substantiating any of the matters in the Loan Documents that are necessary to
enable Borrower to qualify for the Borrowing; and (f) a due diligence
examination of Borrower for the preceding year has been completed and reviewed
to the satisfaction of Agent. Each condition precedent in this agreement
(including, without limitation, those on Schedule 5) is material to the
transactions contemplated by this agreement, and time is of the essence with
respect to each. Subject to first obtaining the approval of all Lenders, Agent
or any Lender may fund any Borrowing without all conditions being satisfied.
However, to the extent lawful, that funding is not a waiver of the requirement
that each condition precedent be satisfied as a prerequisite for any subsequent
funding or issuance, unless all Lenders specifically waive an item in writing.
SECTION 6 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
--------- ------------------------------
Agent and Lenders as follows:
6.1 Purpose and Regulation U.
------------------------
14 Credit Agreement
----------------
(a) Purpose. Borrower will use the proceeds of the (i) Term Loan to
-------
refinance the Refinanced Debt and to make contributions to capital of
Matrix Bank and (ii) Revolving Facility to either make or refinance
contributions to capital of Matrix Bank for Matrix Bank's use as working
capital for its general corporate purposes.
(b) Regulation U. No Company is engaged principally, or as one of
------------
its important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, as
amended. No part of the proceeds of any Borrowing will be used, directly
or indirectly, for a purpose that violates Regulation U or any other Law.
6.2 Companies. Except as described on Schedule 6.2, Borrower has no
---------
Subsidiaries and no Company has used or transacted business under any other
corporate or trade name in the six-month period preceding the date of this
agreement. Each Company is duly organized, validly existing, and in good
standing under the Laws of the jurisdiction in which it is incorporated as
stated on Schedule 6.2. Except where failure is not a Material-Adverse Event,
each Company (i) is duly qualified to transact business and is in good standing
as a foreign corporation or other entity in each jurisdiction where the nature
and extent of its business and properties require due qualification and good
standing (as described on Schedule 6.2), (ii) possesses all requisite authority,
permits, and power to conduct its business as is now being (or is contemplated
by this agreement to be) conducted, and (iii) is in compliance with all
applicable Laws. Matrix Bank's authorized capital consists of 60,000 shares of
common stock, par value $2.50 per share. Borrower owns 100% (45,000 shares) of
Matrix Bank's issued and outstanding shares of common stock, all of which are
duly authorized, validly issued, fully paid, and nonassessable and not subject
to any warrant, option, or other acquisition Right of any Person, subject to any
transfer restriction (except restrictions imposed by securities and general
corporate Laws), or subject to any Liens (except Lender Liens).
6.3 Authorization and Contravention. The execution and delivery by each
-------------------------------
Company of each Loan Document to which it is a party and the performance by it
of its related obligations (a) are within its corporate power, (b) have been
duly authorized by all necessary corporate action, (c) except for any action or
filing that has been taken or made on or before the date of this agreement,
require no action by or filing with any Tribunal, (d) do not violate any
provision of its charter or bylaws, (e) except where not a Material-Adverse
Event, do not violate any provision of Law applicable to it or any material
agreements to which it is a party, and (f) except for Lender Liens, do not
result in the creation or imposition of any Lien on any asset of any Company.
6.4 Binding Effect. Upon execution and delivery by all parties to it,
--------------
each Loan Document will constitute a legal and binding obligation of each
Company party to it, enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable Debtor Laws and general
principles of equity.
6.5 Fiscal Year. The Companies' fiscal year ends each December 31.
-----------
6.6 Current Financials. The Current Financials were prepared in
------------------
accordance with GAAP and present fairly, in all material respects, the financial
condition, results of operations, and cash flows of the Companies as of, and for
the portion of the fiscal year ending on their date or dates (subject only to
normal year-end adjustments). All material liabilities of the Companies as of
the date or dates of the Current Financials are reflected in them or notes to
them. Except for transactions directly related to, or specifically contemplated
by, the Loan Documents, no subsequent material adverse changes have occurred in
the financial condition of the Companies from that shown in the Current
Financials, nor has any Company incurred any subsequent material liability.
6.7 Debt. No Company has any Debt except as described on Schedule 6.7.
----
6.8 Solvency and Capital Requirements. On the date of each Borrowing,
---------------------------------
each Company is, and after giving effect to the requested Borrowing will be,
Solvent. Matrix Bank has (and has not received any
15 Credit Agreement
----------------
notice or directive from OTS that it does not have) an amount of capital to
satisfy its minimum capital requirements.
6.9 Litigation. Except as disclosed on Schedule 6.9 (a) no Company is
----------
subject to, or aware of the threat of, any Litigation that is reasonably likely
to be determined adversely to it or, if so adversely determined, would be a
Material-Adverse Event, and (b) no outstanding or unpaid judgments against any
Company exists.
6.10 Transactions with Affiliates. No Company is a party to a material
----------------------------
transaction with any of its Affiliates except (a) transactions in the ordinary
course of business and upon fair and reasonable terms not materially less
favorable than it could obtain or could become entitled to in an arm's-length
transaction with a Person that was not its Affiliate, and (b) transactions
described on Schedule 6.10.
6.11 Taxes. All Tax returns of each Company required to be filed have been
-----
filed (or extensions have been granted) before delinquency, except for returns
for which the failure to file is not a Material-Adverse Event, and all Taxes
imposed upon each Company that are due and payable have been paid before
delinquency.
6.12 Employee Plans. Except where occurrence or existence is not a
--------------
Material-Adverse Event, (a) no Employee Plan has incurred an "accumulated
funding deficiency" (as defined in (S) 302 of ERISA or (S) 412 of the IRC), (b)
no Company has incurred liability under ERISA to the PBGC in connection with any
Employee Plan, (c) no Company has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) no Company has engaged in any
"prohibited transaction" (as defined in (S) 406 of ERISA or (S) 4975 of the
IRC), and (e) no "reportable event" (as defined in (S) 4043 of ERISA) has
occurred in respect of any Employee Plan, excluding events for which the notice
requirement is waived under applicable PBGC regulations.
6.13 Property and Liens. Each Company has good and indefeasible title to
------------------
its real property and marketable title to all its other property reflected on
the Current Financials except for property that is obsolete or that has been
disposed of in the ordinary course of business or, after the date of this
agreement, as otherwise permitted by this agreement. All Collateral is free and
clear of any Liens and adverse claims of any nature except as described on
Schedule 6.13.
6.14 Intellectual Property. Subject to the qualification below (a) each
---------------------
Company owns all material licenses, patents, patent applications, copyrights,
service marks, trademarks, trademark applications, and trade names necessary to
continue to conduct its businesses as presently conducted by it and proposed to
be conducted by it immediately after the date of this agreement, (b) each
Company is conducting its business without infringement or claim of infringement
of any license, patent, copyright, service ▇▇▇▇, trademark, trade name, trade
secret, or other intellectual property right of others, other than any
infringements or claims that, if successfully asserted against or determined
adversely to that Company, are not a Material-Adverse Event, and (c) no
infringement or claim of infringement by others of any material license, patent,
copyright, service ▇▇▇▇, trademark, trade name, trade secret, or other
intellectual property of any Company exists. The Companies have advised Agent
and Lenders that the representations and warranties in this Section 6.14 are
based on information available to them at the time the representations and
warranties are made or are reaffirmed in each Borrowing Request based upon the
due diligence that is reasonably prudent under the circumstances. Therefore,
there may be facts about which no Company is at that time aware that may cause
one or more of the representations and warranties in this Section 6.14 to be
untrue. If so, then (i) that untruth shall constitute a Default under Section
10.1(c) to the same extent that it would have otherwise constituted a Default,
but (ii) solely for purposes of determining whether any Company has made a false
representation to Agent or any Lender for purposes of any alleged criminal
violation, then the untrue representation and warranty in this Section 6.14
shall be deemed qualified by the existence of those facts so long as the
Companies (A) notify Agent and Lenders about those facts promptly after any
Company becomes aware of them, and (B) diligently attempt to cause the
circumstances to be corrected or remedied so that each affected representation
and warranty in this Section 6.14 shall thereafter be true and correct in all
material respects.
Credit Agreement
----------------
16
6.15 Environmental Matters. Except where not a Material-Adverse Event, no
---------------------
Company (a) knows of any environmental condition or circumstance adversely
affecting any Company's properties or operations, (b) has received any report of
any Company's violation of any Environmental Law, or (c) knows that any Company
is under any obligation to remedy any violation of any Environmental Law. Each
Company has taken prudent steps to determine that its properties and operations
do not violate any Environmental Law except violations that are not a Material-
Adverse Event.
6.16 Regulations. Borrower is duly registered under the Savings and Loan
-----------
Holding Company Act. No Company is subject to regulation under the Investment
Company Act of 1940, or the Public Utility Holding Company Act of 1935.
6.17 Insurance. Each Company maintains with financially sound,
---------
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by self-
insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.
6.18 Full Disclosure. Each material fact or condition relating to the
---------------
Loan Documents or the financial condition, business, or property of the
Companies that is a Material-Adverse Event has been disclosed in writing to
Agent and Lenders. All information previously furnished by any Company to Agent
or any Lender in connection with the Loan Documents was (and all information
furnished in the future by any Company to Agent or any Lender will be) true and
accurate in all material respects or based on reasonable estimates on the date
the information is stated or certified.
SECTION 7 AFFIRMATIVE COVENANTS. For so long as any Lender is committed to lend
--------- ---------------------
under this agreement and until the Obligation has been fully paid and performed,
Borrower covenants and agrees with Agent and Lenders that, without first
obtaining Determining Lenders' consent to the contrary:
7.1 Reporting Requirements. Borrower shall cause to be furnished to Agent
----------------------
the following, all in form and detail reasonably satisfactory to Agent:
(a) Annually. Promptly after preparation but no later than 90 days
--------
after the last day of each fiscal year of Borrower (i) Financials showing
Borrower's consolidated and consolidating financial condition and results
of operations as of, and for the year ended on, that last day, (ii)
Financials showing Matrix Bank's consolidated and consolidating financial
condition and results of operations as of, and for the year ended on, that
last day, (iii) solely with respect to the consolidated portion of those
Financials, the opinions, without material qualification, of Ernst & Young
or of another firm of nationally-recognized independent certified public
accountants reasonably acceptable to Determining Lenders, based on audits
using generally accepted auditing standards, that the consolidated portion
of those Financials were prepared in accordance with GAAP and present
fairly, in all material respects, Holdings' and Borrower's respective
consolidated financial conditions and results of operations, and (iv) a
Compliance Certificate.
(b) Quarterly. Promptly after preparation but no later than 45 days
---------
after the last day of the first three fiscal quarters of Borrower each year
(i) Financials showing Borrower's consolidating financial condition and
results of operations for that fiscal quarter and for the period from the
beginning of the current fiscal year to the last day of that fiscal
quarter, (ii) a Compliance Certificate, (iii) Matrix Bank's most recent
call reports or other quarterly and annual reports of condition or income
furnished to the FDIC or the OTS, and (iv) reports sent to and all consents
and resolutions adopted by Matrix Bank's Board of Directors during the
preceding fiscal quarter.
17 Credit Agreement
----------------
(c) Examinations. Promptly but not later than 45 days after receipt
------------
by Matrix Bank and to the extent lawful, copies of all federal regulatory
examinations of Matrix Bank, including all calculations of its Risk Based
Capital (as described in Section 9.5).
(d) Notices. Notice, promptly after any Company knows or has reason
-------
to know, of (i) any notice of intention to cancel or of cancellation of
Matrix Bank's Bankers Blanket Bond, (ii) any notice or capital directive
from OTS to Matrix Bank indicating that it does not have an amount of
capital satisfying its minimum capital requirements or imposing any
restrictions on Matrix Bank's ability to declare and pay cash Distributions
to Borrower, (iii) the existence and status of any Litigation that, if
determined adversely to any Company, would be a Material-Adverse Event,
(iv) any change in any material fact or circumstance represented or
warranted by any Company in any Loan Document that constitutes a Material-
Adverse Event, (v) the receipt by any Company of notice of any violation or
alleged violation of ERISA or any Environmental Law or other Law if that
violation is a Material-Adverse Event, or (vi) a Default or Potential
Default specifying the nature thereof and what action Borrower has taken,
is taking, or proposes to take with respect to it.
(e) Other Information. Promptly upon reasonable request by Agent or
-----------------
Determining Lenders (through Agent), information (not otherwise required to
be furnished under the Loan Documents) respecting the business affairs,
assets, and liabilities of any Company and opinions, certifications, and
documents in addition to those mentioned in this agreement.
7.2 Use of Proceeds. Each Company shall use the proceeds of Borrowings
---------------
only for the purposes represented in this agreement.
7.3 Books and Records. Each Company shall maintain books, records, and
-----------------
accounts necessary to prepare Financials in accordance with GAAP.
7.4 Inspections. Upon reasonable request and to the extent lawful, each
-----------
Company shall allow Agent, any Lender, or their respective Representatives to
inspect any of its properties, to review reports, files, and other records and
to make and take away copies, to conduct tests or investigations, and to discuss
any of its affairs, conditions, and finances with its directors, officers,
employees, or representatives from time to time during reasonable business
hours.
7.5 Taxes. Each Company shall promptly pay before delinquency any and all
-----
Taxes other than Taxes of which the failure to pay is not a Material-Adverse
Event or which are being contested in good faith by lawful proceedings
diligently conducted, against which reserve or other provision required by GAAP
has been made, and in respect of which levy and execution of any Lien have been
and continue to be stayed.
7.6 Expenses. Borrower shall pay (a) all reasonable legal fees and
--------
expenses incurred by Agent in connection with the preparation, negotiation, and
execution of the Loan Documents, (b) all reasonable legal fees and expenses
incurred by Agent in connection with each separate future amendment, consent,
waiver, or approval requested or agreed to by Borrower and executed in
connection with any Loan Document, (c) all fees, charges, or Taxes for the
recording or filing of any Loan Document to create or perfect Lender Liens, (d)
all other reasonable out-of-pocket expenses of Agent or any Lender in connection
with the preparation, negotiation, execution, or administration of the Loan
Documents, including courier expenses, (e) all amounts expended, advanced, or
incurred by Agent or any Lender to satisfy any obligation of any Company under
any Loan Document, to collect the Obligation, or to enforce the Rights of Agent
or any Lender under any Loan Document, including all court costs, attorneys'
fees (whether for trial, appeal, other proceedings, or otherwise), fees of
auditors and accountants, and investigation expenses reasonably incurred by
Agent or any Lender in connection with any such matters, and (f) interest at an
annual interest rate equal to the Default Rate on each item specified in clauses
(a) through (e) above from 30 days after the date of written demand or request
for reimbursement.
Credit Agreement
----------------
18
7.7 Maintenance of Existence, Assets, and Business. Each Company shall
----------------------------------------------
(a) except as permitted by Section 8.5, maintain its corporate existence and
good standing in its jurisdiction of incorporation and its authority to transact
business in all other states where failure to maintain its authority to transact
business is a Material-Adverse Event, and (b) maintain all licenses, permits,
and franchises necessary for its business where failure to do so is a Material-
Adverse Event.
7.8 Insurance. Each Company shall (a) maintain with financially sound and
---------
reputable insurers, insurance with respect to its assets and business against
such liabilities, casualties, risks, and contingencies and in such types and
amounts (including a fidelity bond or bonds in form and with coverage, with a
company, and with respect to such individuals or groups of individuals) as is
customary in the case of Persons engaged in the same or similar businesses and
similarly situated and, if applicable, as satisfy prevailing FDIC and OTS
applicable requirements, and (b) upon Agent's request, furnish to Agent from
time to time a summary of their insurance coverage, in form and substance
satisfactory to Agent, and originals or copies of the applicable policies.
7.9 Subsidiaries. Borrower shall give Agent 20 days written notice in
------------
advance of the formation or acquisition of any new direct or indirect Subsidiary
of Borrower. Within 20 days after any such new Subsidiary's acquisition or
formation, Borrower shall, and shall cause the Companies to, fully comply with
the applicable provisions of Section 4.1.
7.1 Indemnification. In consideration of the commitments by Agent and
---------------
Lenders under the Loan Documents, Borrower shall indemnify and defend Agent,
each Lender, and their respective affiliates and representatives (collectively,
the "Indemnified Parties") -- and defend them and hold each of them harmless --
against any and all out-of-pocket losses, liabilities, claims, damages,
deficiencies, interest, judgments, costs, or expenses (including reasonable
attorneys' fees) incurred by any of them arising from or because of (a) any
investigation, litigation, or other proceeding brought or threatened in
connection with any loan document or the transactions contemplated by the Loan
Documents, including, without limitation, any use by any Company of the proceeds
of Borrowings, and (b) any representation made by any Company under any Loan
Document. Although each Indemnified Party is entitled to Indemnification for
any Indemnified Party's ordinary negligence, no Indemnified Party is entitled to
Indemnification for its own gross negligence, willful misconduct, or fraud.
This indemnity survives the payment and performance of the Obligation and
termination of the Loan Documents.
SECTION 8 NEGATIVE COVENANTS. For so long as any Lender is committed to lend
--------- ------------------
under this agreement and until the Obligation has been fully paid and performed,
Borrower covenants and agrees with Agent and Lenders that, without first
obtaining Determining Lenders' consent to the contrary, the Companies designated
in the following sections of this Section 8 may not directly or indirectly do
any of the following or commit (other than a commitment that is not binding on
any Company until any prior written consent of Determining Lenders is first
obtained) to do any of the following:
8.1 Debt. Neither Borrower nor Matrix Bank may create, incur, or permit
----
to exist any Debt except the following (collectively, the "Permitted Debt"):
(a) Existing Debt. The existing Debt that is described on Schedule
-------------
6.7 (other than Refinanced Debt) and all renewals, extensions, amendments,
modifications, and refinancings of (but not any principal increases after
the date of this agreement to) any of that Debt.
(b) This Transaction. The Obligation and Guaranties delivered under
----------------
this agreement.
(c) To Borrower. Debt of Matrix Bank to Borrower to the extent that
-----------
the creation of it constitutes a Permitted Investment.
Credit Agreement
----------------
19
(d) Other Debt. Other Debt incurred by either Borrower or Matrix Bank
----------
with the approval of all Lenders that never exceeds $1,000,000 in total-
principal amount outstanding for both Borrower and Matrix Bank, together
with renewals, extensions, amendments, modifications, and refinancings of
that Debt and those obligations subject to the foregoing limitations of
this clause (d).
(e) Miscellaneous. Hedging Contracts; trade payables, accrued Taxes,
-------------
and other liabilities that do not constitute Debt for borrowed money or
Capital Leases; and endorsements of negotiable instruments in the ordinary
course of business.
09/27/97
(f) Senior Notes. Up to $20,000,000 principal amount of Debt with
------------
respect to the senior debt offering consisting of the "Notes" as
described in the Form S-1 filed by Borrower on September 4, 1997, with the
Securities and Exchange Commission, which "Notes" are so described as
unsecured general obligations of Borrower with pari passu right of payment
with all current and future unsecured Debt of Borrower.
01/29/99
(g) Charter-School Debt. Debt of Equi-Mor owed to U.S. Bancorp
-------------------
Investments, Inc. (or its successor or assignee), on a short-term basis for
financing charter-school leases or loans until they can be sold in the
secondary market, for which Borrower has no direct or contingent liability;
provided, however, that if Borrower is either directly or contingently
liable, the amount of such Debt may not exceed the lesser of either (i) 10%
of Borrower's Net Worth or (ii) $5,000,000.
06/30/99
(h) Matrix Bancorp Capital Trust I Guaranty. Guaranty by Borrower of
---------------------------------------
the payment obligations of Matrix Bancorp Capital Trust I under the
1,100,000 Trust Preferred Securities proposed to be issued under the
Amended and Restated Trust Agreement proposed to be entered into by
Borrower, State Street Bank and Trust Company as Property Trustee,
Wilmington Trust Company as Delaware Trustee, and certain administrative
trustees, as described in the Form S-1 filed by Borrower with the
Securities and Exchange Commission via ▇▇▇▇▇ on June 1, 1999.
06/30/99
(i) Matrix Financial Services Guaranty. Guaranty by Borrower of the
----------------------------------
obligations of Matrix Financial Services Corporation under the SS&TG
Customer Agreement and the Agreement for Early Funding, both dated May 4,
1994, and both between Matrix Financial Services Corporation and the
Federal Home Loan Mortgage Corporation related to the purchase and sale of
mortgage-related and debt securities issued or guaranteed by the Federal
Home Loan Mortgage Corporation and related options or forwards.
06/30/99
(j) PaineWebber Guaranty. Guaranty by Borrower of the obligations of
--------------------
Matrix Financial Services Corporation to PaineWebber Incorporated in
connection with transactions for the purchase, sale, lending, borrowing,
and delivery of securities and related transactions.
06/30/99
(k) Subordinated Debt. Subordinated Debt, so long as Borrower does
-----------------
not (A) prepay or cause to be prepaid any principal of, or any interest on,
any of the Subordinated Debt except (i) conversions of Subordinated Debt to
equity of Borrower that is not mandatorily redeemable, (ii) exchanges of
Subordinated Debt for other Subordinated Debt, and (ii) prepayment of
Subordinated Debt with the proceeds of the issuance of additional
Subordinated Debt or capital stock issued by Borrower, or (B) amend or
modify the terms of any Subordinated Debt to the extent that (i) any of the
applicable subordination, payment blockage, or standstill provisions are
less favorable to Lenders than exists for the Subordinated Debentures, as
described in the Form S-1 filed by Borrower with the Securities and
Exchange Commission ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇, ▇▇▇▇, (▇▇) the applicable
representations, covenants, events of default, and other provisions are
materially more onerous to the obligor than exists for the Subordinated
Debentures, as described in the Form S-1 filed by Borrower with the
Securities and Exchange Commission via ▇▇▇▇▇ on June 1, 1999, or (iii)
scheduled
Credit Agreement
----------------
20
or mandatory principal or sinking fund payment obligations before 180 days
after the Maturity Date are made applicable to any Subordinated Debt.
8.2 Liens. Neither Borrower nor Matrix Bank may create, incur, permit to
-----
exist, or enter into any arrangement or agreement (except the Loan Documents)
that directly or indirectly prohibits any Company from creating or incurring any
Lien on any of its assets, or create, incur, permit to exist, or commit to
create or incur any Lien on any of its assets except the following
(collectively, the "Permitted Liens"):
(a) Existing Liens. The existing Liens that are described on Schedule
--------------
6.13 (to the extent that such schedule does not indicate they are to be
extinguished as a condition precedent to, or concurrent with, the initial
Borrowing under this agreement) and all renewals, extensions, amendments,
and modifications of any of them to the extent that the total-principal
amount each individually secures never exceeds the total-principal amount
secured by it on the date of this agreement.
(b) This Transaction. Lender Liens.
----------------
(c) Operating Leases. Any interest or title of a lessor in assets
----------------
being leased under an operating lease that does not constitute Debt.
(d) Hedging Contracts. Liens arising under Hedging Contracts that do
-----------------
not cover any Collateral.
(e) Purchase Money. Liens that secure any of the Permitted Debt
--------------
described in Section 8.1(d) (together with any renewal, extension,
amendment, or modification of any such Lien) so long as each such Lien
never cover any assets except the assets acquired, constructed, or improved
with the directly related Permitted Debt.
(f) Setoffs. Subject to any limitations imposed upon them in the Loan
-------
Documents, rights of set off or recoupment and banker's Liens.
(g) Insurance. Pledges or deposits (to the extent that they do that
---------
may not cover any Collateral except cash proceeds of Collateral arising in
the ordinary course of business) made to secure payment of workers'
compensation, unemployment insurance, or other forms of governmental
insurance or benefits or to participate in any fund in connection with
workers' compensation, unemployment insurance, pensions, or other social
security programs.
(h) Bids and Bonds. Good-faith pledges or deposits (to the extent
--------------
that they do not cover any Collateral except cash proceeds of Collateral
arising in the ordinary course of business) (i) for 10% or less of the
amounts due under (and made to secure) any Company's performance of bids,
tenders, contracts (except for the repayment of borrowed money), (ii) in
respect of any operating lease, that are for up to but not more than the
greater of either 10% of the total rental obligations for the term of the
lease or 50% of the total rental obligations payable during the first year
of the lease, or (iii) made to secure statutory obligations, surety or
appeal bonds, or indemnity, performance, or other similar bonds benefitting
any Company in the ordinary course of its business.
(i) Property Restrictions. Zoning and similar restrictions on the use
---------------------
of, and easements, restrictions, covenants, title defects, and similar
encumbrances on, real property that do not materially impair the use of the
real property and that are not violated by existing or proposed structures
or land use.
(j) Inchoate Liens. If no Lien has been filed in any jurisdiction or
--------------
agreed to (i) claims and Liens for Taxes not yet due and payable, (ii)
mechanic's Liens and materialman's Liens for services or materials and
similar Liens incident to construction and maintenance of real property, in
21 Credit Agreement
----------------
each case for which payment is not yet due and payable, (iii) landlord's
Liens for rental not yet due and payable, and (iv) Liens of warehousemen
and carriers and similar Liens securing obligations that are not yet due
and payable.
(k) Miscellaneous. Any of the following to the extent that the
-------------
validity or amount is being contested in good faith and by appropriate and
lawful proceedings diligently conducted, reserve or other appropriate
provision (if any) required by GAAP has been made, levy and execution has
not issued or continues to be stayed, they do not individually or
collectively detract materially from the value of the property of the
Person in question or materially impair the use of that property in the
operation of its business, and (other than any such Liens given statutory
priority) they are subordinate to the Lender Liens to the extent that they
cover any Collateral: (i) Claims and Liens for Taxes; (ii) claims and
Liens upon, and defects of title to, real or personal property, including
any attachment of personal or real property or other legal process before
adjudication of a dispute on the merits; (iii) claims and Liens of
mechanics, materialmen, warehousemen, carriers, landlords, or other like
Liens; (iv) Liens incident to construction and maintenance of real
property; and (v) adverse judgments, attachments, or orders on appeal for
the payment of money.
11/12/98
(l) Charter-School Liens. Liens incurred on or before January 31,
--------------------
1999, that secure only the Debt described in Section 8.1(g), that do not
cover any Collateral, and that cover only the charter-school leases or
loans of Equi-Mor financed with that Debt and related assets such as
proceeds.
8.3 Investments. Borrower may not make any Investments except the
-----------
following (collectively, "Permitted Investments"):
(a) Government Securities. Government Securities.
---------------------
(b) State Obligations. Readily marketable direct obligations of any
-----------------
state of the United States of America given on the date of such investment
a credit rating of at least Aa by ▇▇▇▇▇'▇ Investors Service, Inc., or AA by
Standard & Poor's Corporation, in each case due within one year from the
making of the investment.
(c) Certificates of Deposit, Etc. Certificates of deposit issued by,
-----------------------------
bank deposits in, eurocurrency deposits through, bankers' acceptances of,
and repurchase agreements covering Government Securities executed by (i)
any Lender or (ii) any domestic bank or any domestic branch or office of a
foreign bank, in either case having on the date of the investment a short-
term certificate of deposit credit rating of at least P-2 by ▇▇▇▇▇'▇
Investors Service, Inc., or A-2 by Standard & Poor's Corporation, in each
case due within one year after the date of the making of the investment.
(d) Government Repos. Repurchase agreements covering Government
----------------
Securities executed by a broker or dealer registered under Section 15(b) of
the Securities Exchange Act of 1934 having on the date of the investment
capital of at least $100,000,000, due within 30 days after the date of the
making of the investment, so long as the maker of the investment receives
written confirmation of the transfer to it of record ownership of the
Government Securities on the books of a "primary dealer" in the Government
Securities as soon as practicable after the making of the investment.
(e) Commercial Paper. Readily marketable commercial paper of domestic
----------------
corporations doing business in the United States of America or any of its
states or of any corporation that is the holding company for a bank
described in clause (c) above and having on the date of the investment a
credit rating of at least P-1 by ▇▇▇▇▇'▇ Investors Service, Inc., or A-1 by
Standard & Poor's Corporation, in each case due within 90 days after the
date of the making of the investment.
22 Credit Agreement
----------------
(f) Preferred Stock. "Money market preferred stock" issued by a
---------------
domestic corporation given on the date of the investment a credit rating of
at least Aa by ▇▇▇▇▇'▇ Investors Services, Inc., and AA by Standard &
Poor's Corporation, in each case having an investment period not exceeding
50 days, so long as (i) the amount of all of those investments issued by
the same issuer does not exceed $5,000,000 and (ii) the total amount of all
of those investments does not exceed $10,000,000.
(g) Mutual Funds. A readily redeemable "money market mutual fund"
------------
sponsored by a bank described in clause (c) above, or a registered broker
or dealer described in clause (d) above, that has and maintains an
investment policy limiting its investments primarily to instruments of the
types described in clauses (a) through (f) above and has on the date of
those investment total assets of at least $1,000,000,000.
(h) Other Companies. Investments by Borrower in any other Company in
---------------
compliance with Section 4.1.
(i) Directors, Etc.. Loans or advances to directors, officers, and
---------------
employees of the Borrower that never exceed a total of $1,000,000 in
principal-amount outstanding.
(j) Customers. Indebtedness of its customers created in its ordinary
---------
course of business in a manner consistent with its present practices.
(k) Hedge Contracts. Hedge Contracts.
---------------
08/18/97
(l) Miscellaneous. Other Investments made in the ordinary course of
-------------
business for a financial services firm.
11/12/98
(m) Charter-School Assets. Investments made on or before January 31,
---------------------
1999, in charter-school leases or loans originated or acquired by Equi-Mor
in the ordinary course of business.
For purposes of this Section 8.3, the total amount outstanding of any Investment
by any Person in any other Person is to be determined net of repayments and
dividends to, and sales of securities of the second Person by, the first Person.
06/29/98
8.4 Distributions. Borrower may not pay or declare any Distribution.
-------------
8.5 Merger or Consolidation. No Company may merge or consolidate with or
-----------------------
into any other Person except that any Company may merge into or be consolidated
with any other Company so long as Borrower is the surviving corporation if it is
involved.
8.6 Dispositions of Assets. Neither Borrower nor Matrix Bank may sell,
----------------------
assign, lease, transfer, or otherwise dispose of any of its assets (including,
without limitation, equity interests in any other Company) except (a) sales and
dispositions in the ordinary course of business for a fair and adequate
consideration and (b) sales of assets which are obsolete or are no longer in use
and which are not significant to the continuation of that Company's business.
8.7 Use of Proceeds. Borrower may not use the proceeds of Borrowings (a)
---------------
for any purpose other than as represented in this agreement, (b) for wages of
employees, unless a timely payment to or deposit with the United States of
America of all amounts of Tax required to be deducted and withheld with respect
to such wages is also made, or (c) in violation of the representation in Section
6.1.
23 Credit Agreement
----------------
8.8 Transactions with Affiliates. No Company may directly or indirectly
----------------------------
enter into any transaction with any of its Affiliates other than (a)
transactions between Companies that are in compliance with Section 4.1 and (b)
other transactions in the ordinary course of business or upon fair and
reasonable terms not materially less favorable than it could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate.
8.9 Employee Plans. Except where a Material-Adverse Event would not
--------------
result, no Company may directly or indirectly permit any of the events or
circumstances described in Section 6.12 to exist or occur.
8.10 Compliance with Laws and Documents. No Company may directly or
----------------------------------
indirectly (a) violate the provisions of any Laws applicable to it or of any
Material Agreement to which it is a party if that violation alone or with all
other violations is a Material-Adverse Event or (b) violate the provisions of
its charter or bylaws or repeal, replace or amend any provision of its charter
or bylaws if any such action is a Material-Adverse Event.
8.11 Government Regulations. No Company (other than United Capital
----------------------
Markets, Inc.) may directly or indirectly conduct its business in a way that it
becomes regulated under the Investment Company Act of 1940.
8.12 Fiscal Year Accounting. No Company may directly or indirectly change
----------------------
its fiscal year nor use any accounting method other than GAAP.
8.13 New Businesses. No Company may directly or indirectly engage in any
--------------
business except the businesses in which it or any of its Affiliates is presently
engaged and any other reasonably-related business.
8.14 Assignment. No Company may directly or indirectly assign or transfer
----------
any of its Rights, duties, or obligations under any of the Loan Documents.
SECTION 9 FINANCIAL COVENANTS. For so long as any Lender is committed to lend
--------- -------------------
under this agreement and until the Obligation has been fully paid and performed,
Borrower covenants and agrees with Agent and Lenders that, without first
obtaining Determining Lenders' consent to the contrary, it may not directly or
indirectly permit any of the following to occur or exist, as measured (unless
otherwise stated) at the end of each of the Companies' fiscal quarters included
below:
06/29/98
9.1 Net Worth. The Companies' Net Worth to be less than the greater of
---------
either (a) the sum of (i) 90% of actual Net Worth at the most recent fiscal year
end, plus (ii) 50% of cumulative Net Income (without deduction for losses) after
the most recent fiscal year end, plus (iii) 90% of all contributions to
Borrower's stockholders' equity made after the Closing Date, or (b) $40,000,000.
9.2 Adjusted Debt/Net Worth. The ratio of the Companies' Adjusted Debt to
-----------------------
Net Worth to exceed 4.0 to 1.0.
06/29/98
9.3 Cash Coverage. The ratio (calculated only in respect of Borrower) of
-------------
cash dividends and tax sharing payments available to be received by the Borrower
from its Subsidiaries divided by cash expenses and CMLTD paid by the Borrower,
may not be less than 1.5 to 1.0 for any four-fiscal-quarter period.
06/29/98
9.4 Net Income. Matrix Bank's Net Income to be less than $7,500,000 for
----------
any four-fiscal-quarter period.
9.5 Capital Ratio. Matrix Bank fails to maintain either (a) a "well
-------------
capitalized" designation from OTS with respect to its minimum "Risk Based
Capital," as defined in 12 C.F.R. (S) 565.4(b)(1), or (b) a "Risk Based Capital
Ratio," in 12 C.F.R. (S) 567.2(a)(1) of not less than 10%.
24 Credit Agreement
----------------
9.6 Leverage Ratio. Matrix Bank fails to maintain either (a) a "well
--------------
capitalized" designation from OTS with respect to its "Leverage," as defined in
12 C.F.R. (S) 565.4(b)(1), or (b) a "Leverage Ratio," in 12 C.F.R. (S)
567.2(a)(2)(ii) of not less than 5.0%.
9.7 Classified Assets/Total Capital. The ratio of Matrix Bank's
-------------------------------
Classified Assets to Total Capital (stated as a percentage) to exceed 50%.
06/29/98
9.8 Net Charge Offs/Total Loans. The ratio of Matrix Bank's Net Charge
---------------------------
Offs to Total Loans (stated as a percentage) to exceed 0.50%.
9.9 Adjusted Assets/Total Assets. The ratio of Matrix Bank's Adjusted
----------------------------
Assets to total assets (stated as a percentage) to be less than the greater of
either (a) the minimum percentage required by (S) 10(m) of the Home Owners' Loan
Act for "QTL" or (b) 60%.
08/18/97
9.10 Interest Rate Sensitivity. Deterioration in the base case
-------------------------
sensitivity, as measured by the "No Change" category of the "Present Value
Estimates by Interest Rate Scenario" in the quarterly OTS's "Interest Rate Risk
Exposure Report" for Matrix Bank may never exceed $10,000,000.
06/29/98
9.11 Commercial Loans/Total Capital. The ratio of the outstanding
------------------------------
principal balance of Commercial Loans owned by Matrix Bank to Total Capital of
Matrix Bank to exceed 200%.
SECTION 10 DEFAULTS AND REMEDIES.
---------- ---------------------
10. Default. The term "Default" means the existence or occurrence of any
-------
one or more of the following:
(a) Obligation. Borrower fails to pay (i) any interest on the
----------
Obligation when due under the Loan Documents and that failure continues for
five days or (ii) any other part of the Obligation when due under the Loan
Documents.
(b) Covenants. Any Company fails to punctually and properly perform,
---------
observe, and comply with any (i) any covenant, agreement, or condition
under Sections 8 or 9 or (ii) any covenant, agreement, or condition
contained in any of the Loan Documents -- other than covenants to pay the
Obligation and the covenants listed in clause (i) above -- and that failure
continues for a period of 30 calendar days after any Company has, or, with
the exercise of reasonable investigation, should have, notice of it.
(c) Misrepresentation. Any material statement, warranty, or
-----------------
representation by or on behalf of any Company or Guarantor in any Loan
Document or other writing authored by any Company or Guarantor and
furnished in connection with the Loan Documents, proves to have been
incorrect or misleading in any material respect as of the date made or
deemed made.
(d) Debtor Law. Any Company or Guarantor (i) is not Solvent, (ii)
----------
fails to pay its Debts generally as they become due, (iii) voluntarily
seeks, consents to, or acquiesces in the benefit of any Debtor Law, or (iv)
becomes a party to or is made the subject of any proceeding provided for by
any Debtor Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the Rights of Agent or any Lender granted in the
Loan Documents unless, if the proceeding is involuntary, the applicable
petition is dismissed within 60 days after its filing.
08/18/97
(e) Matrix Financial Loan Agreement. Either (i) the occurrence of a
-------------------------------
"Default," as defined in the Matrix Financial Loan Agreement or (ii) 90-
days elapse after the commitments to lend under the Matrix Financial Loan
Agreement are canceled or terminated by Matrix Financial under that
agreement in accordance with its terms or are not extended beyond their
current expiration by Matrix Financial.
25 Credit Agreement
----------------
(f) Other Debt. Any Company or Guarantor fails to make any payment
----------
due on any Debt or security (with respect to which any Company or Guarantor
has redemption, sinking fund, or other purchase obligations) or any event
occurs or any condition exists in respect of any Debt or security of any
Company or Guarantor, the effect of which is (i) to cause or to permit any
holder of that Debt or security or a trustee to cause (whether or not it
elects to cause) any of that Debt or security to become due before its
stated maturity or its regularly scheduled payment dates, or (ii) to permit
a trustee or the holder of any security (other than common stock of any
Company or Guarantor) to elect (whether or not it does elect) a majority of
the directors on the board of directors of that Company or Guarantor.
(g) Judgments. Any Company or Guarantor fails to pay any money
---------
judgment of $50,000 or more against it at least ten days prior to the date
on which any of the assets of that Company or Guarantor may be lawfully
sold to satisfy that judgment.
(h) Attachments. The failure to have discharged within a period of 30
-----------
days after the commencement of any attachment, sequestration, or similar
proceeding against any of the assets of any Company or Guarantor.
(i) Unenforceability. Any material provision of any Loan Document for
----------------
any reason ceases to be in full force and effect or is fully or partially
declared null and void or unenforceable or the validity or enforceability
of any Loan Document is challenged or denied by any Company.
06/29/98
(j) Change of Control. Any (i) material change in the ownership or
-----------------
management of Borrower or any Guarantor from that ownership and senior
management as it exists on the date of this agreement without the written
approval of all Lenders, (ii) failure to provide advance notice of any
change in ownership or management, or (iii) common stock, preferred stock,
or ownership interest in Matrix Bank ceases to be owned by Borrower.
(k) Capital Requirements or Restrictions/Bankers Bond. Matrix Bank
-------------------------------------------------
(i) has (or receives notice or a directive from OTS that it has) inadequate
capital to satisfy its minimum capital requirements, (ii) receives any
notice or capital directive from OTS restricting its ability to pay cash
Distributions to Borrower, or (iii) receives notice of intention to cancel
or of cancellation of its Bankers Blanket Bond.
10. Remedies.
--------
(a) Debtor Law. Upon the occurrence of a Default under Section
----------
10.1(d), the commitments of Lenders to extend credit under this agreement
automatically terminate and the full Obligation is automatically due and
payable, without presentment, demand, notice of default, notice of the
intent to accelerate, notice of acceleration, or other requirements of any
kind, all of which are expressly waived by Borrower.
(b) Other Defaults. While a Default exists -- other than those
--------------
described in clause (a) above -- Agent may and, upon the direction of
Determining Lenders, shall declare the Obligation to be immediately due and
payable, whereupon it shall be due and payable, whereupon the commitments
of Lenders to extend credit under this agreement are then automatically
terminated.
(c) Other Remedies. Following the termination of the commitments of
--------------
Lenders to extend credit under this agreement and the acceleration of the
Obligation, Agent may (and, at the direction of Determining Lenders, shall)
do any one or more of the following: (i) Reduce any claim to judgment;
(ii) foreclose upon or otherwise enforce any Lender Liens; and (iii)
exercise any other Rights in the Loan Documents, at Law, in equity, or
otherwise that Determining Lenders may direct. Should any Default continue
that, in Agent's opinion, materially and adversely affects the Collateral
or the interests of the Lenders under this agreement, Agent may, in a
notice to the Lenders of that
26 Credit Agreement
----------------
Default set forth one or more actions that Agent, in its opinion, believes
should be taken. Unless otherwise directed by Determining Lenders
(excluding the Lender serving as Agent) within ten days following the date
of the notice setting forth the proposed action or actions, Agent may, but
shall not be obligated to, take the action or actions set forth in that
notice.
10.3 Right of Offset. Borrower hereby grants to Agent and to each Lender a
---------------
right of offset, to secure the repayment of the Obligation, upon any and all
monies, securities, or other property of Borrower, and the proceeds therefrom
now or hereafter held or received by or in transit to Agent or such Lender from
or for the account of Borrower, whether for safekeeping, custody, pledge,
transmission, collection, or otherwise, and also upon any and all deposits
(general or special, time or demand, provisional or final) and credits of
Borrower, and any and all claims of Borrower against Agent or such Lender, at
any time existing. While a Default exists, Agent and each Lender are authorized
at any time and from time to time, without notice to either Company, to offset,
appropriate, and apply any and all of those items against the Obligation,
subject to Section 3.9.
10.4 Waivers. Borrower waives any right to require Agent to (a) proceed
-------
against any Person, (b) proceed against or exhaust any of the Collateral or
pursue its Rights and remedies as against the Collateral in any particular
order, or (c) pursue any other remedy in its power. Borrower and each surety,
endorser, guarantor, pledgor, and other party ever liable or whose property is
ever liable for payment of any of the Obligation jointly and severally waive
presentment and demand for payment, protest, notice of intention to accelerate,
notice of acceleration, and notice of protest and nonpayment, and agree that
their or their property's liability with respect to the Obligation, or any part
thereof, shall not be affected by any renewal or extension in the time of
payment of the Obligation, by any indulgence, or by any release or change in any
security for the payment of the Obligation, and hereby consent to any and all
renewals, extensions, indulgences, releases, or changes, regardless of the
number thereof.
10.5 Performance by Agent. Should any covenant, duty, or agreement of any
--------------------
Company fail to be performed in accordance with the terms of this agreement or
of any document delivered under this agreement, Agent may, at its option, after
notice to Borrower, as the case may be, perform, or attempt to perform, such
covenant, duty, or agreement on behalf of that Company and shall notify each
Lender that it has done so. In such event, Borrower shall jointly and
severally, at the request of Agent, promptly pay any amount expended by Agent in
such performance or attempted performance to Agent at its principal place of
business, together with interest thereon at the Maximum Rate from the date of
such expenditure by Agent until paid. Notwithstanding the foregoing, it is
expressly understood that Agent does not assume and shall never have, except by
express written consent of Agent, any liability or responsibility for the
performance of any duties of any Company under this agreement or under any other
document delivered under this agreement.
10.6 No Responsibility. Except in the case of fraud, gross negligence, or
-----------------
willful misconduct, neither Agent nor any of its officers, directors, employees,
or attorneys shall assume -- or ever have any liability or responsibility for --
any diminution in the value of the Collateral or any part of the Collateral.
10.7 No Waiver. The acceptance by Agent or any Lender at any time and from
---------
time to time of partial payment or performance by any Company of any of their
respective obligations under this agreement or under any Loan Document shall not
be deemed to be a waiver of any Default then existing. No waiver by Agent or any
Lender shall be deemed to be a waiver of any other then existing or subsequent
Default. No delay or omission by Agent or any Lender in exercising any right
under this agreement or under any other document required to be executed under
or in connection with this agreement shall impair such right or be construed as
a waiver thereof or any acquiescence therein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof, or the
exercise of any other right under this agreement or otherwise.
10.8 Cumulative Rights. All Rights available to Agent and the Lenders
-----------------
under this agreement or under any other document delivered under this agreement
shall be cumulative of and in addition to all other Rights granted to Agent and
the Lenders at Law or in equity, whether or not the Notes be due and payable
27 Credit Agreement
----------------
and whether or not Agent shall have instituted any suit for collection,
foreclosure, or other action in connection with this agreement or any other
document delivered under this agreement.
10.9 Rights of Individual Lenders. No Lender shall have any right by
----------------------------
virtue of, or by availing itself of, any provision of this agreement to
institute any actions or proceedings at Law, in equity, or otherwise (excluding
any actions in bankruptcy), upon or under or with respect to this agreement, or
for the appointment of a receiver, or for any other remedy under this agreement,
unless (a) the Determining Lenders previously shall have given to Agent written
notice of a Default and the continuance thereof, including a written request
upon Agent to institute such action or proceedings in its own name and offering
to indemnify Agent against the costs, expenses and liabilities to be incurred
therein or thereby, (b) Agent, for ten Business Days after its receipt of such
notice, shall have failed to institute any such action or proceeding, and (c) no
direction inconsistent with such written request shall have been given to Agent
by Determining Lenders. It is understood and intended, and expressly covenanted
by the taker and holder of every Note with every other taker and holder and
Agent, that no one or more holders of Notes shall have any right in any manner
whatever by virtue, or by availing itself, of any provision of this agreement to
affect, disturb or prejudice the Rights of any other Lenders, or to obtain or
seek to obtain priority over or preference to any other such Lender, or to
enforce any right under this agreement, except in the manner herein provided and
for the equal, ratable and common benefit of all Lenders. For the protection
and enforcement of the provisions of this Section 10.9, each and every Lender
and Agent shall be entitled to such relief as can be given either at law or in
equity.
10.10 Notice to Agent. Should any Default or Potential Default occur and be
---------------
continuing, any Lender having actual knowledge thereof shall notify Agent and
Borrower of the existence thereof, but the failure of any Lender to provide that
notice shall not prejudice that Lender's Rights under this agreement.
10.11 Costs. All court costs, reasonable attorneys' fees, other costs of
-----
collection, and other sums spent by Agent or any Lender in the exercise of any
Right provided in any Loan Document is payable to Agent or that Lender, as the
case may be, on demand, is part of the Obligation, and bears interest at the
Default Rate from the date paid by Agent or any Lender to the date repaid by
Borrower.
SECTION 11 AGENT.
---------- -----
11.1 Authorization and Action. Each Lender hereby appoints Agent as Agent
------------------------
under the Loan Documents and authorizes Agent to take such action on its behalf
and to exercise such powers and perform such duties as are expressly delegated
to Agent by the terms of the Loan Documents, together with such powers as are
reasonably incidental thereto. As to any matter not expressly provided for by
this agreement (including, without limitation, enforcement or collection of the
Notes), Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
Lenders, and those instructions shall be binding upon all Lenders and all
holders of the Notes. However, that Agent shall not be required to take any
action that exposes Agent to personal liability or that is contrary to this
agreement or applicable Laws. Agent agrees to give to each Lender prompt notice
of each notice given to it by Borrower pursuant to the terms of the Loan
Documents.
11.2 Agent's Reliance, Etc. Notwithstanding anything to the contrary in
----------------------
any Loan Document, neither Agent nor any of its Representatives shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, Agent: (a)
May treat the payee of any Note as the holder thereof; (b) may consult with
legal counsel (including counsel for Borrower), independent public accountants
and other experts selected by it or Borrower and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties, or representations made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
agreement on the part of Borrower or to inspect the property (including the
books and
28 Credit Agreement
----------------
records) of Borrower; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this agreement or any other instrument or document furnished pursuant hereto;
and (f) shall incur no liability under or in respect of this agreement by acting
upon any notice, consent, certificate or other instrument or writing (which may
be by telecopy) believed by it to be genuine and signed or sent by the proper
party or parties.
11.3 Agent and Affiliates. With respect to Borrowings made by it, and the
--------------------
one or more Notes issued to it, Agent shall have the same rights and powers
under this agreement and the other Loan Documents as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Agent in its
individual capacity. Agent and the Affiliates of Agent may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, Borrower, any of its Affiliates and any Person who may do
business with or own securities of Borrower or any of its Affiliates, all as if
Agent was not Agent and without any duty to account therefor to Lenders.
11.4 Credit Decision. Each Lender acknowledges that it has, independently
---------------
and without reliance upon Agent or any other Lender, and based on the financial
statements referred to in Sections 6.6 and 7.1 of this agreement and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter this agreement. Each Lender also acknowledges
that it will, independently and without reliance upon Agent or any Lender, and
based on such documents and information as it shall deem appropriate at the
time, make its own credit decisions in taking or not taking action under this
agreement.
11.5 Indemnification. Lenders shall indemnify Agent (to the extent not
---------------
reimbursed by Borrower), ratably according to their respective Commitment
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, judgments, suits, costs, expenses, or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this agreement or any
action taken or omitted by Agent under this agreement (including any of same
which may result from the negligence, but not gross negligence, of Agent).
However, no Lender shall be liable for any portion of those liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by Agent in connection with the preparation,
execution, delivery, administration, modification, amendment, or enforcement
(whether through negotiations, legal proceedings, or otherwise) of, or legal
advice in respect of rights or responsibilities under, this agreement, to the
extent that Agent is not reimbursed for such expenses by Borrower.
11.6 Successor Agent. Agent may resign at any time by giving written
---------------
notice thereof to Lenders and Borrower and may be removed at any time with or
without cause by 100% of Lenders. Upon any such resignation or removal, 100% of
Lenders shall have the right to appoint a successor Agent in the capacity of
Agent. If no successor Agent shall have been so appointed by 100% of Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Agent's giving of notice of resignation or the Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of Lenders, appoint a successor
Agent, which shall be a commercial bank or savings bank organized under the laws
of the United States of America or of any state thereof which has a combined
capital and surplus of at least $200,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges,
and duties of the retiring Agent, and the retiring Agent shall be discharged
from any further duties, and obligations under this agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this agreement. The appointment of a
successor Agent shall not release the retiring Agent from any liability it may
have for any actions taken or omitted to be taken by it while it was Agent under
this agreement.
29 Credit Agreement
----------------
SECTION 12 MISCELLANEOUS.
---------- -------------
12.1 Nonbusiness Days. Any action that is due under any Loan Document on
----------------
a non-Business Day may be delayed until the next Business Day. However, interest
accrues on any payment until it is made.
12.2 Communications. Unless otherwise stated, a communication under any
--------------
Loan Document to a party to this agreement must be written to be effective and
is deemed given:
. For Borrowing Requests, only when actually received by Agent.
. Otherwise, if by fax, when transmitted to the appropriate fax number
(but, without affecting the date deemed given, the fax must be
promptly confirmed by telephone).
. Otherwise, if by mail, on the third Business Day after enclosed in a
properly addressed, stamped, and sealed envelope deposited in the
appropriate official postal service.
. Otherwise, when actually delivered.
Until changed by written notice to each other party to this agreement, the
address and fax number are stated for (a) Borrower and Agent, beside their names
on the signature pages below, and (b) each Lender, beside its name on Schedule
2.
12.3 Form and Number of Documents. The form, substance, and number of
----------------------------
counterparts of each writing to be furnished under the Loan Documents must be
satisfactory to Agent and its counsel.
12.4 Exceptions to Covenants. An exception to any Loan Document covenant
-----------------------
does not permit violation of any other Loan Document covenant.
12.5 Survival. All Loan Document provisions survive all closings and are
--------
not affected by any investigation made by any party.
12.6 Governing Law. Unless otherwise stated, each Loan Document must be
-------------
construed and its performance enforced under the Laws of the State of Texas and
the United States of America.
12.7 Invalid Provisions. If any provision of a Loan Document is
------------------
judicially determined to be unenforceable, all other provisions of it remain
enforceable. If the provision determined to be unenforceable is a material part
of that Loan Document, then, to the extent lawful, it shall be replaced by a
judicially-construed provision that is enforceable but otherwise as similar in
substance and content to the original provision as the context of it reasonably
allows.
12.8 Conflicts Between Loan Documents. The provisions of this agreement
--------------------------------
control if in conflict (i.e., the provisions contradict each other as opposed to
a Loan Document containing additional provisions not in conflict) with the
provisions of any other Loan Document.
12.9 Discharge and Certain Reinstatement. Borrower's obligations under
-----------------------------------
the Loan Documents remain in full force and effect until no Lender has any
commitment to extend credit under the Loan Documents and the Obligation is fully
paid (except for provisions under the Loan Documents which by their terms
expressly survive payment of the Obligation and termination of the Loan
Documents). If any payment under any Loan Document is ever rescinded or must be
restored or returned for any reason, then all Rights and obligations under the
Loan Documents in respect of that payment are automatically reinstated as though
the payment had not been made when due.
30 Credit Agreement
----------------
12.10 Amendments, Consents, Conflicts, and Waivers. An amendment of --
--------------------------------------------
or an approval, consent, or waiver by Agent or by one or more Lenders under --
any Loan Document must be in writing and must be:
(a) Borrower, Agent, and All Lenders. Executed by Borrower and
--------------------------------
Agent and executed or approved in writing by all Lenders if action of all
Lenders is specifically provided in any Loan Document or if it purports to
(i) except as otherwise stated in this Section 12.10, extend the due date
or decrease the scheduled amount of any payment under -- or reduce the
rate or amount of interest, fees, or other amounts payable to Agent or any
Lender under -- any Loan Document, (ii) change the definition of Borrowing
Base (or any component of it), Commitment Percentage, Determining Lenders,
Maturity Date, Termination Percentage, or Stated-Termination Date, or
(iii) partially or fully release any Guaranty or any Collateral except
releases of Collateral contemplated in this agreement.
(b) Borrower, Agent, and Determining Lenders. Otherwise (i) for
----------------------------------------
this agreement, executed by Borrower, Agent, and Determining Lenders, or
(ii) for other Loan Documents, approved in writing by Determining Lenders
and executed by Borrower, Agent, and any other party to that Loan
Document.
No course of dealing or any failure or delay by Agent, any Lender, or any of
their respective Representatives with respect to exercising any Right of Agent
or any Lender under the Loan Documents operates as a waiver of that Right. An
approval, consent, or waiver is only effective for the specific instance and
purpose for which it is given. The Loan Documents may only be supplemented by
agreements, documents, and instruments delivered according to their respective
express terms.
12.11 Multiple Counterparts. Any Loan Document may be executed in any
---------------------
number of counterparts with the same effect as if all signatories had signed the
same document, and all of those counterparts must be construed together to
constitute the same document. This agreement is effective when counterparts of
it have been executed and delivered to Agent by each Lender, Agent, and
Borrower, or, in the case only of those Lenders, when Agent has received faxed
or other evidence satisfactory to it that each Lender has executed and is
delivering to Agent a counterpart of it.
12.12 Parties. This agreement binds and inures to Borrower, each Lender,
-------
Agent, and their respective successors and permitted assigns. Only those
Persons may rely upon or raise any defense about this agreement.
(a) Assignment by Companies. No Company may assign any Rights or
-----------------------
obligations under any Loan Document without first obtaining the written
consent of Agent and all Lenders.
(b) Assignment by Lender. Any Lender may assign, pledge, and
--------------------
otherwise transfer all or any of its Rights and obligations under the Loan
Documents either (i) to a Federal Reserve Bank without the consent of any
party to this agreement so long as that Lender is not released from its
obligations under the Loan Documents, or (ii) otherwise in the ordinary
course of its lending business and in accordance with all Laws, and with
Section 12.13 or 12.14 so long as (A) except for assignments, pledges, and
other transfers by a Lender to its Affiliates, the written consent of
Borrower and Agent, which may not be unreasonably withheld, must be first
obtained, (B) the assignment or transfer (other than a pledge) does not
involve a purchase price that directly or indirectly reflects a discount
from face value unless that Lender first offered that assignment or
transfer to the other Lenders on ratable basis according to their
Commitment Percentages, (C) neither Borrower nor Agent are required to
incur any cost or expense incident to any assignment, pledge, or other
transfer by any Lender, all of which are for the account of the assigning,
pledging, or transferring Lender and its assignee, pledgee, or transferee
as they may agree, and (D) if the Participant or Purchaser is organized
under the Laws of any jurisdiction other than the United States of America
or any of its states, it complies with Section 3.14.
31 Credit Agreement
----------------
(c) Otherwise Void. Any purported assignment, pledge, or other
--------------
transfer in violation of this section is void from beginning and not
effective.
12.13 Participations. Subject to Section 12.12(b) and this section and
--------------
only if no Default exists, a Lender may at any time sell to one or more Persons
(each a "Participant") participating interests in its Commitment and its share
of the Obligation.
(a) Additional Conditions. For each participation (i) the selling
---------------------
Lender must remain --and the Participant may not become -- a "Lender"
under this agreement, (ii) the selling Lender's obligations under the Loan
Documents must remain unchanged, (iii) the selling Lender must remain
solely responsible for the performance of those obligations, (iv) the
selling Lender must remain the holder of its one or more Notes and its
share of the Obligation for all purposes under the Loan Documents, and (v)
Borrower and Agent may continue to deal solely and directly with the
selling Lender in connection with those Rights and obligations.
(b) Participant Rights. The selling Lender may obtain for each of
------------------
its Participants the benefits of the Loan Documents related to
participations in its share of the Obligation, but Borrower is never
obligated to pay any greater amount that would be due to the selling
Lender under the Loan Documents calculated as though no participation had
been made. Otherwise, Participants have no Rights under the Loan Documents
except certain permitted voting Rights described below.
(c) Participation Agreements. An agreement for a participating
------------------------
interest (i) may only provide to a Participant voting Rights in respect of
any amendment of or approval, consent, or waiver under any Loan Document
related to the matters in Section 12.10(b) if it also provides for a
voting mechanism that a majority of that selling Lender's Commitment
Percentage or Termination Percentage, as the case may be (whether directly
held by that selling Lender or participated) controls the vote for that
selling Lender, and (ii) may not permit a Participant to assign, pledge,
or otherwise transfer its participating interest in the Obligation to any
Person except any Lender or its Affiliates.
12.14 Transfers. Subject to Section 12.12(b) and this section and only if
---------
no Default exists, a Lender may at any time sell to one or more financial
institutions (each a "Purchaser") all or part of its Rights and obligations
under the Loan Documents.
(a) Additional Conditions. The sale (i) must be accomplished by the
---------------------
selling Lender and Purchaser executing and delivering to Agent and
Borrower an Assignment and (ii) may not occur until the selling Lender
pays to Agent an administrative-transfer fee of $2,500 (unless waived by
Agent).
(b) Procedures. Upon satisfaction of the foregoing conditions and
----------
as of the Effective Date in the assignment and assumption agreement, which
may not be before delivery of that document to Agent and Borrower, then
(i) a Purchaser is for all purposes a Lender party to -- with all the
Rights and obligations of a Lender under -- this agreement, with a
Commitment as stated in the assumption agreement, (ii) the selling Lender
is released from its obligations under the Loan Documents to a
corresponding extent, (iii) Schedule 2 is automatically deemed to reflect
the name, address, and Commitment of the Purchaser and the reduced
Commitment of the selling Lender, and Agent shall deliver to Borrower and
Lenders an amended Schedule 2 reflecting those changes, (iv) Borrower
shall execute and deliver to each of the selling Lender and the Purchaser
a Note, each based upon their respective Commitments following the
transfer, (v) upon delivery of the one or more Notes under clause (iv)
above, the selling Lender shall return to the appropriate Company all
Notes previously delivered to it under this agreement, and (vi) the
Purchaser is subject to all the provisions in the Loan Documents, the same
as if it were a Lender that executed this agreement on its original date.
32 Credit Agreement
----------------
12.15 Jurisdiction; Venue; Service of Process; and Jury Trial. EACH
-------------------------------------------------------
PARTY, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE OF
BORROWER, FOR EACH OF ITS SUBSIDIARIES), (A) IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN TEXAS, AND
AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL
PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE
OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW, (B) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN
CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT,
(C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) AGREES TO DESIGNATE AND MAINTAIN
AN AGENT FOR SERVICE OF PROCESS IN DALLAS, TEXAS, IN CONNECTION WITH ANY SUCH
LITIGATION AND TO DELIVER TO AGENT EVIDENCE THEREOF, IF REQUESTED, (E)
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS SET FORTH
HEREIN, (F) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY
ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION SHALL
BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS, AND (G) IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED THEREBY. The scope of each of the foregoing
waivers is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Borrower (for itself and
on behalf of each of its Subsidiaries) and each other party to this agreement
acknowledge that this waiver is a material inducement to the agreement of each
party hereto to enter into a business relationship, that each has already relied
on this waiver in entering into this agreement, and each will continue to rely
on each of such waivers in related future dealings. Borrower (for itself and on
behalf of each of its Subsidiaries) and each other party to this agreement
warrant and represent that they have reviewed these waivers with their legal
counsel, and that they knowingly and voluntarily agree to each such waiver
following consultation with legal Counsel. THE WAIVERS IN THIS SECTION 12.15
ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN DOCUMENT. In the
event of Litigation, this agreement may be filed as a written consent to a trial
by the court.
12.16 Limitation of Liability. Neither Agent nor any Lender shall be
-----------------------
liable to any Company for any amounts representing indirect, special, or
consequential damages suffered by any Company, except where such amounts are
based substantially on willful misconduct by Agent or any Lender, but then only
to the extent any damages resulting from such wilful misconduct are covered by
Agent's and the other Lenders' fidelity bond or other insurance.
12.17 Entire Agreement. The Loan Documents represent the final agreement
----------------
between the parties with respect to the subject matter thereof and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties.
Remainder of page intentionally blank.
Signature page follows.
33 Credit Agreement
----------------
EXECUTED as of the date first stated in this agreement.
(address) MATRIX CAPITAL CORPORATION, as
Borrower
Matrix Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer --------------------------------------------
and President ▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
Tel (▇▇▇) ▇▇▇-▇▇▇▇ and President
Fax (▇▇▇) ▇▇▇-▇▇▇▇
(address) U.S. BANK NATIONAL ASSOCIATION, as 06/30/99
successor Agent
U.S. Bank National Association, Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President --------------------------------------------
Tel (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Fax (▇▇▇) ▇▇▇-▇▇▇▇
Signature Page to Credit Agreement
6/30/99
THIRD AMENDED SCHEDULE 2
------------------------
LENDERS AND COMMITMENTS
-----------------------
Name of Lender Term Loan Revolving Combined
Commitment Facility Commitment
Commitment
===============================================================================
U.S. Bank National Association $ 5,000,000 $ 5,000,000 $10,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------
Bank One, Texas, N.A. $ 2,500,000 $ 2,500,000 $ 5,000,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
-------------------------------------------------------------------------------
Residential Funding Corporation $ 2,500,000 $ 2,500,000 $ 5,000,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Director
Tel (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
===============================================================================
Total Commitments $10,000,000 $10,000,000 $20,000,000
===============================================================================
Third Amended Schedule 2
------------------------
SCHEDULE 5
----------
CLOSING CONDITIONS
------------------
Unless otherwise specified, all dated as of March 12, 1997
(the "Closing Date") or a date (a "Current Date")
within 30 days before the Closing Date.
1. CREDIT AGREEMENT (the "Credit Agreement") between MATRIX CAPITAL
CORPORATION, a Colorado corporation ("Borrower"), certain lenders
("Lenders"), and BANK ONE, TEXAS, N.A., as Agent for Lenders ("Agent")--
all the terms in which have the same meanings when used in this
schedule -- accompanied by:
Schedule 2 - Lenders and Commitments
Schedule 5 - Closing Conditions
Schedule 6.2 - Companies
Schedule 6.7 - Existing Debt
Schedule 6.9 - Litigation and Judgments
Schedule 6.10 - Affiliate Transactions
Schedule 6.13 - Existing Liens
Exhibit A-1 - Term Note
Exhibit A-2 - Revolving Note
Exhibit B - Guaranty
Exhibit C - Pledge Agreement
Exhibit D-1 - Borrowing Request
Exhibit D-2 - Compliance Certificate
Exhibit E - Opinion of Counsel
Exhibit F - Assignment and Assumption Agreement
2. TERM NOTE in the stated principal amount of $2,000,000, executed by
Borrower, payable to the order of Bank One, Texas, N.A., as the sole
initial Lender, and in substantially the form of Exhibit A-1 to the
Credit Agreement.
3. REVOLVING NOTE in the stated principal amount of $6,000,000, executed by
Borrower, payable to the order of Bank One, Texas, N.A., as the sole
initial Lender, and in substantially the form of Exhibit A-2 to the
Credit Agreement.
4. GUARANTY executed by all of Borrower's Subsidiaries named below as
Guarantors ("Guarantors"), accepted by Agent, and in substantially the
form of Exhibit B to the Credit Agreement.
Matrix Financial Services Corporation
Matrix Funding Corporation
United Capital Markets, Inc.
United Financial, Inc.
United Special Services, Inc.
Vintage Delaware Holdings, Inc.
Vintage Financial Services Corporation
(now named First Matrix Investment Services Corp.)
The Vintage Group, Inc.
H&B [5.]GUARANTY re-executed by First Matrix Investment Services Corp., as
Guarantor, accepted by Agent, and in substantially the form of Exhibit
B to the Credit Agreement.
6. PLEDGE AGREEMENT executed by Borrower as Debtor and Agent as Secured
Party, and in substantially the form of Exhibit C to the Credit
Agreement.
Schedule 5
----------
J&G [7.] STOCK CERTIFICATE(S) evidencing all of the issued and outstanding
common stock of Matrix Capital Bank accompanied by an ASSIGNMENT
SEPARATE FROM STOCK CERTIFICATE for each such stock certificate, duly
executed in blank by Borrower, and in substantially the form of Annex
A to the Pledge Agreement referred to above.
8. UCC SEARCH REPORTS for financing statements filed against Borrower as
Debtor with the following UCC filing offices:
Jurisdiction Search File Number File Description
Date Date
--------------------------------------------------------------------------------
Sec. of State CO 02/11/97 952051252 07/10/95 Accounts, fixtures,
(Bank One, equipment, contract
Arizona, N.A.) rights, inventory,
proceeds, products,
etc.
--------------------------------------------------------------------------------
Sec. of State TX 02/26/97 None None None
--------------------------------------------------------------------------------
9. TERMINATIONS OR AMENDMENTS OF FINANCING STATEMENTS reflected in the
UCC Search Reports described above that, in the judgment of Agent and
its special counsel, conflict with the priority of the Lender Liens
contemplated by the Loan Documents, each executed by the appropriate
secured party and (if necessary) debtor, and in form acceptable to
Agent for filing with the applicable UCC filing offices:
NONE
10. CORPORATE CHARTER for Borrower, certified as of January 17, 1997 by
the Colorado Secretary of State.
▇▇▇▇▇[11.]OFFICERS' CERTIFICATE for Borrower, executed by its President and
Secretary as to (a) the due incumbency of its officers authorized to
execute or attest to the Loan Documents, (b) resolutions duly adopted
by its directors approving and authorizing the execution of the Loan
Documents, (c) its corporate charter, (d) bylaws, to which must be
attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
12. CORPORATE CHARTER for Matrix Capital Bank, certified as of March 7,
1997, by the Office of Thrift Supervision.
13. CORPORATE CHARTER for Matrix Financial Services Corporation, certified
as of January 24, 1997, by the Arizona Secretary of State.
▇▇▇▇▇[14.]OFFICERS' CERTIFICATE for Matrix Financial Services Corporation,
executed by its President and Secretary as to (a) the due incumbency
of its officers authorized to execute or attest to the Loan Documents,
(b) resolutions duly adopted by its directors approving and
authorizing the execution of the Loan Documents, (c) its corporate
charter, (d) bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
Schedule 5
----------
2
H&B [15.] CORPORATE CHARTER for Matrix Funding Corporation, certified as of a
Current Date by the Colorado Secretary of State.
▇▇▇▇▇ [16.] OFFICERS' CERTIFICATE for Matrix Funding Corporation, executed by
its President and Secretary as to (a) the due incumbency of its
officers authorized to execute or attest to the Loan Documents, (b)
resolutions duly adopted by its directors approving and authorizing
the execution of the Loan Documents, (c) its corporate charter, (d)
bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
17. CORPORATE CHARTER for Sterling Trust Company, certified as of
February 26, 1997, by the Texas Secretary of State.
18. CORPORATE CHARTER for United Capital Markets, Inc., certified as of
February 21, 1997, by the Colorado Secretary of State.
▇▇▇▇▇ [19.] OFFICERS' CERTIFICATE for United Capital Markets, Inc., executed
by its President and Secretary as to (a) the due incumbency of its
officers authorized to execute or attest to the Loan Documents, (b)
resolutions duly adopted by its directors approving and authorizing
the execution of the Loan Documents, (c) its corporate charter, (d)
bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
20. CORPORATE CHARTER for United Financial, Inc., certified as of
February 21, 1997, by the Colorado Secretary of State.
▇▇▇▇▇ [21.] OFFICERS' CERTIFICATE for United Financial, Inc., executed by its
President and Secretary of Borrower as to (a) the due incumbency of
its officers authorized to execute or attest to the Loan Documents,
(b) resolutions duly adopted by its directors approving and
authorizing the execution of the Loan Documents, (c) its corporate
charter, (d) bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
22. CORPORATE CHARTER for United Special Services, Inc., certified as
of February 21, 1997, by the Colorado Secretary of State.
▇▇▇▇▇ [23.] OFFICERS' CERTIFICATE for United Special Services, Inc., executed
by its President and Secretary of Borrower as to (a) the due
incumbency of its officers authorized to execute or attest to the
Loan Documents, (b) resolutions duly adopted by its directors
approving and authorizing the execution of the Loan Documents, (c)
its corporate charter, (d) bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
24. CORPORATE CHARTER for Vintage Delaware Holdings, Inc., certified
as of February 28, 1997, by the Delaware Secretary of State.
3 Schedule 5
----------
▇▇▇▇▇ [25.] OFFICERS' CERTIFICATE for Vintage Delaware Holdings, Inc.,
executed by its President and Secretary of Borrower as to (a) the
due incumbency of its officers authorized to execute or attest to
the Loan Documents, (b) resolutions duly adopted by its directors
approving and authorizing the execution of the Loan Documents, (c)
its corporate charter, (d) bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
26. CORPORATE CHARTER for First Matrix Investment Services Corp.,
certified as of February 28, 1997, by the Texas Secretary of State.
▇▇▇▇▇ [27.] OFFICERS' CERTIFICATE for First Matrix Investment Services Corp.,
executed by its President and Secretary of Borrower as to (a) the
due incumbency of its officers authorized to execute or attest to
the Loan Documents, (b) resolutions duly adopted by its directors
approving and authorizing the execution of the Loan Documents, (c)
its corporate charter, (d) bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
28. CORPORATE CHARTER for The Vintage Group, Inc., certified as of
February 28, 1997, by the Texas Secretary of State.
▇▇▇▇▇ [29.] OFFICERS' CERTIFICATE for The Vintage Group, Inc., executed by its
President and Secretary of Borrower as to (a) the due incumbency of
its officers authorized to execute or attest to the Loan Documents,
(b) resolutions duly adopted by its directors approving and
authorizing the execution of the Loan Documents, (c) its corporate
charter, (d) bylaws, to which must be attached
Exhibit A - Resolutions
Exhibit B - Bylaws
Exhibit C - Charter
H&B [30.] CERTIFICATES OF QUALIFICATION, GOOD STANDING, AND AUTHORITY for the
following Companies, issued as of Current Dates by the appropriate
Tribunals for the following jurisdictions:
Company Jurisdiction Certificate Date
--------------------------------------------------------------------------------------------------
Matrix Capital Colorado Existence/ Good Standing 01/17/97
Corporation
--------------------------------------------------------------------------------------------------
Matrix Capital Bank OTS Existence/Good Standing 03/03/97
--------------------------------------------------------------------------------------------------
Matrix Financial Arizona Good Standing 01/24/97
Services Corporation
--------------------------------------------------------------------------------------------------
California Certificate of Foreign Status 01/24/97
--------------------------------------------------------------------------------------------------
Colorado Authorization/Good Standing 01/17/97
--------------------------------------------------------------------------------------------------
Florida Existence/Good Standing 01/24/97
--------------------------------------------------------------------------------------------------
Georgia Existence 01/24/97
--------------------------------------------------------------------------------------------------
Schedule 5
----------
4
==================================================================================================
Company Jurisdiction Certificate Date
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Iowa Authorization 01/27/97
--------------------------------------------------------------------------------------------------
Michigan Existence/Good Standing 01/24/97
--------------------------------------------------------------------------------------------------
Missouri Existence/Good Standing 01/24/97
--------------------------------------------------------------------------------------------------
North Carolina Authorization 01/24/97
--------------------------------------------------------------------------------------------------
Ohio Qualification 01/24/97
(Surrendered 07/18/96)
--------------------------------------------------------------------------------------------------
Texas Existence Forfeited 08/27/96
--------------------------------------------------------------------------------------------------
Utah Qualification 01/30/97
(Not Registered in State)
--------------------------------------------------------------------------------------------------
Matrix Funding Colorado Existence/Good Standing ordered
Corporation
--------------------------------------------------------------------------------------------------
Sterling Trust Texas Existence/Good Standing 02/25/97 and 02/28/97
Company
--------------------------------------------------------------------------------------------------
United Capital Colorado Existence/Good Standing 02/21/97
Markets, Inc.
--------------------------------------------------------------------------------------------------
United Financial, Inc. Colorado Existence/Good Standing 02/21/97
--------------------------------------------------------------------------------------------------
United Special Colorado Existence/Good Standing 02/21/97
Services, Inc.
--------------------------------------------------------------------------------------------------
Vintage Delaware Delaware Existence/Good Standing 02/28/97
Holdings, Inc.
--------------------------------------------------------------------------------------------------
First Matrix Texas Existence/Good Standing 02/28/97
Investment Services
Corp.
--------------------------------------------------------------------------------------------------
The Vintage Group, Texas Existence/Good Standing 02/28/97
Inc.
--------------------------------------------------------------------------------------------------
31. OPINION of Jenkens & ▇▇▇▇▇▇▇▇▇, P.C., Dallas, Texas, as counsel to
Borrower and Guarantors, addressed to Lender, and addressing the
matters described on Exhibit E to the Credit Agreement.
32. Any other documents and items as Agent or any Lender may reasonably
request.
Schedule 5
----------
5
SCHEDULE 6.2
------------
===================================================================================================================================
COMPANIES
===================================================================================================================================
===================================================================================================================================
Name Jurisdiction Jurisdictions Trade Names Used Still Using Chief Ownership
Organized Qualified to in Last Four Trade Executive
Business Months Name(s)? Y/N Office
-----------------------------------------------------------------------------------------------------------------------------------
Matrix ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Publicly
("Borrower") Street Traded
Suite 1410
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
Matrix Capital Bank Federal None None N 277 ▇. ▇▇▇▇▇▇ 100% -
Savings Bank ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
Matrix Financial Services Arizona California, Matrix Capital Y 201 West 100% -
Corporation ("Matrix Colorado, Florida, Mortgage Corp ▇▇▇▇▇▇▇▇ St. Borrower
Financial") Georgia, Maryland, Phoenix, AZ
Michigan, 85013
Missouri, North
Carolina, Ohio,
Pennsylvania,
Texas, and Utah
-----------------------------------------------------------------------------------------------------------------------------------
Matrix Funding Corp. Colorado None None NA 201 West 100% - Matrix
▇▇▇▇▇▇▇▇ St. Financial
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
Sterling Trust ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ Fish Pond 100% -
Rd. Vintage
▇▇▇▇, ▇▇ ▇▇▇▇▇ Delaware
-----------------------------------------------------------------------------------------------------------------------------------
United Capital Markets, Colorado Missouri None 1380 ▇▇▇▇▇▇▇▇ 100% -
Inc. Street Borrower
Suite 1420
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
United Financial, Inc. Colorado None None NA 1380 ▇▇▇▇▇▇▇▇ 100% -
Street Borrower
Suite 1420
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
United Special Services, Colorado None None NA 1380 ▇▇▇▇▇▇▇▇ 100% -
Inc. Street Borrower
Suite 1450
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
-----------------------------------------------------------------------------------------------------------------------------------
Vintage ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ Fish Pond 100% -
Inc. Rd. Vintage Group
▇▇▇▇, ▇▇ ▇▇▇▇▇
===================================================================================================================================
Schedule 6.2
------------
====================================================================================================================================
COMPANIES
====================================================================================================================================
====================================================================================================================================
Name Jurisdiction Jurisdictions Trade Names Used Still Using Chief Ownership
Organized Qualified to in Last Four Trade Executive
Business Months Name(s)? Y/N Office
-----------------------------------------------------------------------------------------------------------------------------------
First Matrix Investment Texas None Vintage NA 6001 W. I20 100% -
Services Corp. Financial Suite 208 Vintage Group
Services Arlington, TX
Corporation 76017
-----------------------------------------------------------------------------------------------------------------------------------
The Vintage Group, Inc. Texas None None NA ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇% -
▇▇. ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
====================================================================================================================================
2 Schedule 6.2
------------
SCHEDULE 6.7
------------
EXISTING DEBT
-------------
1. Balance @ 2/28/97 - $2,002,778 - Debt owed to Banker's Bank of the West due
in annual principal installments of $286,101, plus interest through 2003,
collateralized by common stock of Matrix Capital Bank, interest at prime
plus 1.0%. (the "Refinanced Debt").
2. Balance @ 2/28/97 - $2,910,000 - Senior subordinated notes, interest at
14.0% payable semiannually, unsecured and maturing July 2002, with
mandatory redemptions of $727,500 on each of July, 1999, 2000, and 2001.
3. Balance @ 2/28/97 - $930,538 - Debt owed to Bank One, Arizona, secured by a
first lien deed of trust on real estate, unpaid principal balance plus
interest due June 1998, interest at prime plus 1.0%.
4. Balance @ 2/28/97 - $520,866 - Debt owed to Cortrust Bank due in 28
consecutive installments, secured by mortgage servicing rights, interest
ranging from prime plus 2.5% to fixed at 10.0%.
5. Guaranty by Borrower of Debt arising under the Amended and Restated Loan
Agreement dated as of January 31, 1997, between Matrix Financial Services
Corporation, certain lenders, and Bank One, Texas, N.A., as Agent for those
lenders, providing for a secured revolving credit facility of up to
$100,000,000.
Schedule 6.7
------------
SCHEDULE 6.9
------------
LITIGATION AND JUDGMENTS
------------------------
1. Matrix Financial is a defendant in two lawsuits, ▇▇▇▇▇▇ v. Matrix Financial
Services Corporation (Court of Common Pleas, Ottawa County, Ohio, January
29, 1996), and ▇▇▇▇▇▇▇▇ v. Matrix Financial Services Corporation (United
States District Court for the District of Massachusetts, June 17, 1996),
which purport to cover a nationwide class of plaintiffs and involve similar
facts and legal claims. In both cases, the plaintiffs allege that Matrix
Financial breached the terms of plaintiffs' promissory notes and mortgages
by imposing certain fax and payoff statement fees at the time the
plaintiffs prepaid their loans. The plaintiffs claim that such fees
constitute unauthorized charges in violation of the terms of the notes, and
demand restitution and attorneys' fees. In addition, the plaintiffs in the
▇▇▇▇▇▇▇▇ action seek treble damages for Matrix Financial's alleged
violation of 18 U.S.C. (S) 1964.
Matrix Financial has entered into an agreement, which is subject to court
approval, to settle the ▇▇▇▇▇▇ action and the ▇▇▇▇▇▇▇▇ action. The
settlement agreement provides for the administration of the settlement of
both actions in the ▇▇▇▇▇▇ action and the dismissal of the ▇▇▇▇▇▇▇▇ action.
Accordingly, a settlement order of dismissal was entered in the ▇▇▇▇▇▇▇▇
action on November 13, 1996.
The Court in the ▇▇▇▇▇▇ action granted preliminary approval of the
settlement in January 1997. Accordingly, as provided by the settlement
agreement, Matrix established a settlement fund of $640,000. The costs of
notice and class administration, attorneys' fees, and recovery to class
members are all to come from the settlement fund. Notice to class members
was mailed in January 1997, and published in February 1997. The final
approval hearing for the settlement is scheduled for April 10, 1997.
2. The Companies are involved from time to time in routine Litigation
incidental to their businesses. However, other than described above, the
Companies believe that they are not party to any pending Litigation that,
if decided adversely to any of them, would be a Material-Adverse Event.
SCHEDULE 6.9
------------
SCHEDULE 6.10
-------------
AFFILIATE TRANSACTIONS
----------------------
1. In October, 1995, Borrower loaned Matrix Diversified, an affiliate of
Borrower, $750,000. The loan accrues at an interest rate of 13% and is
secured by a second lien on the assets of Matrix Diversified. Principal and
interest is due and payable in one lump sum on October 31, 2000.
2. Borrower leases approximately 7,400 square feet of office space to a
subsidiary of Matrix Diversified at a base rental rate of approximately
$8,500 per month. The lease expires September 1997, but Borrower
anticipates that the lease will be renewed for successive one-year terms at
a market rate.
3. Borrower has a loan to ▇▇. ▇▇▇▇▇▇▇, Vice Chairman of its Board, in the
amount of approximately $80,000. The loan accrues at an interest rate of
prime and is unsecured. The entire principal and interest is due in one
lump sum and is payable December 31, 1997. Borrower, at its option, may
extend the note in annual increments.
SCHEDULE 6.10
-------------
SCHEDULE 6.13
-------------
EXISTING LIENS
--------------
1. Pledge of the Capital Stock of Matrix Capital Bank to secure the Refinanced
Debt, which pledge will be released upon payment of the Refinanced Debt
pursuant to the Credit Agreement.
2. Mortgage Lien upon the commercial office building at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and related Financing Statement No. 952051252
filed on July 10, 1995, with the Colorado Secretary of State in respect of
the Debt described as Item 3 on Schedule 6.7.
3. Lien on servicing rights of Matrix Financial Services Corporation securing
the Debt described as Item 4 on Schedule 6.7.
SCHEDULE 6.13
-------------
06/30/99
SECOND AMENDED EXHIBIT A-1
--------------------------
TERM NOTE
---------
$___________________ June 30, 1999
FOR VALUE RECEIVED, MATRIX BANCORP, INC., a Colorado corporation formerly
named Matrix Capital Corporation ("Borrower"), promises to pay to the order of
___________________________________________ ("Lender") $____________, together
with interest.
This note is a "Term Note" under the Credit Agreement (as renewed,
extended, amended, or restated, the "Credit Agreement") dated as of March 12,
1997, between Borrower, Lender, certain other Lenders, and U.S. Bank National
Association, as Agent for Lenders. All of the defined terms in the Credit
Agreement have the same meanings when used, unless otherwise defined, in this
note.
This note incorporates by reference the principal and interest payment
terms in the Credit Agreement for this note, including, without limitation, the
final maturity, which is the Maturity Date. Principal and interest are payable
to the holder of this note through Agent at either (a) its offices at ▇▇▇ ▇▇/▇▇/
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or (b) at any other address so designated by
Agent in written notice to Borrower.
This note incorporates by reference all other provisions in the Credit
Agreement applicable to this note, such as provisions for disbursements of
principal, applicable-interest rates before and after Default, voluntary and
mandatory prepayments, acceleration of maturity, exercise of Rights, payment of
attorneys' fees, court costs, and other costs of collection, certain waivers by
Borrower and other obligors, assurances and security, choice of Texas and United
States federal Law, usury savings, and other matters applicable to Loan
Documents under the Credit Agreement.
This note is a renewal, extension, increase of, and substitution for (but
not novation of), the existing Term Note dated as of June 29, 1998, executed by
Borrower, payable to Payee, and in the stated principal amount of $____________.
MATRIX BANCORP, INC., as Borrower
By ____________________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer and President
SECOND AMENDED EXHIBIT A-1
--------------------------
06/30/99
SECOND AMENDED EXHIBIT A-2
--------------------------
REVOLVING NOTE
--------------
$___________________ June 30, 1999
FOR VALUE RECEIVED, MATRIX BANCORP, INC., a Colorado corporation formerly
named Matrix Capital Corporation ("Borrower"), promises to pay to the order of
___________________________________________ ("Lender") that portion of the
principal amount of $___________________________________________ that may from
time to time be disbursed and outstanding under this note together with
interest.
This note is a "Revolving Note" under the Credit Agreement (as renewed,
extended, amended, or restated, the "Credit Agreement") dated as of March 12,
1997, between Borrower, Lender, certain other Lenders, and U.S. Bank National
Association, as Agent for Lenders. All of the defined terms in the Credit
Agreement have the same meanings when used, unless otherwise defined, in this
note.
This note incorporates by reference the principal and interest payment
terms in the Credit Agreement for this note, including, without limitation, the
final maturity, which is the Maturity Date. Principal and interest are payable
to the holder of this note through Agent at either (a) its offices at ▇▇▇ ▇▇/▇▇/
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or (b) at any other address so designated by
Agent in written notice to Borrower.
This note incorporates by reference all other provisions in the Credit
Agreement applicable to this note, such as provisions for disbursements of
principal, applicable-interest rates before and after Default, voluntary and
mandatory prepayments, acceleration of maturity, exercise of Rights, payment of
attorneys' fees, court costs, and other costs of collection, certain waivers by
Borrower and other obligors, assurances and security, choice of Texas and United
States federal Law, usury savings, and other matters applicable to Loan
Documents under the Credit Agreement.
This note is a renewal, extension, increase of, and substitution for (but
not novation of), the existing Revolving Note dated as of June 29, 1998,
executed by Borrower, payable to Payee, and in the stated principal amount of
$____________.
MATRIX BANCORP, INC., as Borrower
By ____________________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer and President
SECOND AMENDED EXHIBIT A-2
--------------------------
EXHIBIT B
---------
GUARANTY
--------
06/30/99
THIS GUARANTY is executed as of March 12, 1997, by the undersigned (each a
"Guarantor") for the benefit of U.S. BANK NATIONAL ASSOCIATION (as successor to
Bank One, Texas, N.A., in its capacity as Agent for the Lenders now or in the
future party to the Credit Agreement described below, "Agent").
06/30/99
MATRIX BANCORP, INC., a Colorado corporation formerly named Matrix Capital
Corporation ("Borrower"), Agent, and Lenders have executed the Credit Agreement
(as renewed, extended, amended, or restated, the "Credit Agreement") dated as of
March 12, 1997. The execution and delivery of this guaranty are requirements to
Agent's and Lenders' execution of the Credit Agreement, are integral to the
transactions contemplated by the Loan Documents, and are conditions precedent to
Lenders' obligations to extend credit under the Credit Agreement. The execution
and delivery of this guaranty in no way constitute a condition to or inducement
to any Lender to extend any other credit to any Guarantor.
ACCORDINGLY, for adequate and sufficient consideration, each Guarantor
agrees with Agent and Lenders as follows:
1. Definitions. Terms defined in the Credit Agreement have the same
-----------
meanings when used, unless otherwise defined, in this guaranty. As used in this
guaranty:
"Agent" is defined in the preamble to this guaranty and includes its
successor appointed under the Loan Documents and acting as Agent for Lenders
under the Loan Documents.
"Borrower" is defined in the recitals to this guaranty and includes,
without limitation, Borrower, Borrower as a debtor-in-possession, and any
receiver, trustee, liquidator, conservator, custodian, or similar party
appointed for Borrower or for all or substantially all of Borrower's assets
under any Debtor Law.
"Credit Agreement" is defined in the recitals to this guaranty.
"Guaranteed Debt" means the Obligation, as defined in the Credit Agreement,
and all present and future costs, attorneys' fees, and expenses incurred by
Agent or any Lender to enforce Borrower's, Guarantor's, or any other obligor's
payment of any of the Obligation, including, without limitation, all present and
future amounts that would become due but for the operation of (S)(S) 502 or 506
or any other provision of Title 11 of the United States Code and all present and
future accrued and unpaid interest (including, without limitation, all post-
petition interest if Borrower voluntarily or involuntarily becomes subject to
any Debtor Law).
"Guarantor" is defined in the preamble to this guaranty.
"Subordinated Debt" means all present and future obligations of Borrower to
any Guarantor, whether those obligations are (a) direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several, (b)
due or to become due to any Guarantor, (c) held by or are to be held by any
Guarantor, (d) created directly or acquired by assignment or otherwise, or (e)
evidenced in writing.
2. Guaranty. Any Guarantor jointly and severally guarantees to Agent and
--------
Lenders the prompt payment of the Guaranteed Debt at (and at all times after)
maturity (by acceleration or otherwise). This is an absolute, irrevocable, and
continuing guaranty, and the circumstance that at any time or from time to time
the Guaranteed Debt may be paid in full does not affect the obligation of any
Guarantor with respect to the Guaranteed Debt incurred after that time. This
guaranty remains in effect until the Guaranteed Debt is fully
Exhibit B
---------
paid and performed and all commitments to extend any credit under the Credit
Agreement have terminated. No Guarantor may rescind or revoke its obligations
with respect to the Guaranteed Debt.
3. Representations and Warranties. Each Guarantor jointly and severally
------------------------------
represents and warrants to Agent that (a) each Guarantor has the power and
authority to execute, deliver, and perform this guaranty, which any execution,
delivery, and performance does not violate any Law or agreement by which any
Guarantor or any of any Guarantor's assets is bound, (b) the value of the
consideration received and to be received by each Guarantor is reasonably worth
at least as much as that Guarantor's liability under this guaranty, and that
liability may reasonably be expected to directly or indirectly benefit that
Guarantor, (c) this guaranty constitutes a legal and binding obligation of each
Guarantor, enforceable against that Guarantor in accordance with its terms,
except as enforceability may be limited by applicable Debtor Laws and general
principles of equity, (d) all financial statements and other information about
each Guarantor's financial condition and cash flow are true and correct in all
material respects and fairly present that Guarantor's financial condition, cash
flows, material liabilities, and (e) each Guarantor is Solvent.
4. Cumulative Rights. If any Guarantor becomes liable for any
-----------------
indebtedness owing by Borrower to Agent or any Lender, other than under this
guaranty, that liability may not be in any manner impaired or affected by this
guaranty. The Rights of Agent or Lenders under this guaranty are cumulative of
any and all other Rights that Agent or Lenders may ever have against each
Guarantor. The exercise by Agent or Lenders of any Right under this guaranty or
otherwise does not preclude the concurrent or subsequent exercise of any other
Right.
5. Payment Upon Demand. If a Default exists, each Guarantor shall (on
-------------------
demand and without further notice of dishonor and without any notice having been
given to any Guarantor previous to that demand of either the acceptance by Agent
or Lenders of this guaranty or the creation or incurrence of any Guaranteed
Debt) pay the amount of the Guaranteed Debt then due and payable to Agent and
Lenders. It is not necessary for Agent or Lenders, in order to enforce that
payment by any Guarantor, first or contempo raneously to institute suit or
exhaust remedies against Borrower or others liable on that indebtedness or to
enforce Rights against any collateral securing that indebtedness.
6. Subordination. The Subordinated Debt is expressly subordinated to the
-------------
full and final payment of the Guaranteed Debt. Each Guarantor agrees not to
accept any payment of any Subordinated Debt from Borrower if a Default exists.
If any Guarantor receives any payment of any Subordinated Debt in violation of
the foregoing, that Guarantor shall hold that payment in trust for Agent and
Lenders and promptly turn it over to Agent, in the form received (with any
necessary endorsements), to be applied to the Guaranteed Debt.
7. Subrogation and Contribution. Until the Guaranteed Debt has been paid
----------------------------
and performed in full (a) no Guarantor may assert, enforce, or otherwise
exercise any Right of subrogation to any of the Rights or Liens of Agent or
Lenders or any other beneficiary against Borrower or any other obligor on the
Guaranteed Debt or any collateral or other security or any Right of recourse,
reimbursement, subrogation, contribution, indemnification, or similar Right
against Borrower or any other obligor on any Guaranteed Debt or any guarantor of
it, and (b) each Guarantor irrevocably waives the benefit of, and any Right to
participate in, any collateral or other security given to Agent or Lenders or
any other beneficiary to secure payment of any Guaranteed Debt.
8. No Release. No Guarantor's obligations under this guaranty may be
----------
released, diminished, or affected by the occurrence of any one or more of the
following events: (a) any taking or accepting of any other security or assurance
for any Guaranteed Debt; (b) any release, surrender, exchange, subordination,
impairment, or loss of any collateral securing any Guaranteed Debt; (c) any full
or partial release of the liability of any other obligor on the Obligation; (d)
the modification of, or waiver of compliance with, any terms of any other Loan
Document; (e) the insolvency, bankruptcy, or lack of corporate or partnership
power of any party at any time liable for any Guaranteed Debt, whether now
existing or occurring in the future; (f) any renewal, extension, or
rearrangement of any Guaranteed Debt or any adjustment, indulgence, forbearance,
or com-
2 Exhibit B
---------
promise that may be granted or given by Agent or any Lender to any other obligor
on the Obligation; (g) any neglect, delay, omission, failure, or refusal of
Agent or any Lender to take or prosecute any action in connection with the
Guaranteed Debt; (h) any failure of Agent or any Lender to notify any Guarantor
of any renewal, extension, or assignment of any Guaranteed Debt, or the release
of any security or of any other action taken or refrained from being taken by
Agent or any Lender against Borrower or any new agreement between Agent, any
Lender, and Borrower, it being understood that neither Agent nor any Lender is
required to give any Guarantor any notice of any kind under any circumstances
whatsoever with respect to or in connection with any Guaranteed Debt, other than
any notice required to be given to any Guarantor elsewhere in this guaranty; (i)
the unenforceability of any Guaranteed Debt against any party because it exceeds
the amount permitted by Law, the act of creating it is ultra ▇▇▇▇▇, the officers
creating it exceeded their authority or violated their fiduciary duties in
connection with it, or otherwise; or (j) any payment of the Obligation to Agent
or Lenders is held to constitute a preference under any Debtor Law or for any
other reason Agent or any Lender is required to refund that payment or make
payment to someone else (and in each such instance this guaranty will be
reinstated in an amount equal to that payment).
9. Waivers. Each Guarantor waives all Rights by which it might be
-------
entitled to require suit on an accrued Right of action in respect of any
Guaranteed Debt or require suit against Borrower or others, whether arising
under (S) 34.02 of the Texas Business and Commerce Code, as amended (regarding
its Right to require Agent or Lenders to ▇▇▇ Borrower on accrued Right of action
following its written notice to Agent or Lenders), (S) 17.001 of the Texas Civil
Practice and Remedies Code, as amended (allowing suit against it without suit
against Borrower, but precluding entry of judgment against it before entry of
judgment against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as
amended (requiring Agent or Lenders to join Borrower in any suit against it
unless judgment has been previously entered against Borrower), or otherwise.
10. Credit Agreement Provisions. Each Guarantor acknowledges that certain
---------------------------
(a) representations and warranties in the Credit Agreement are applicable to it
and confirms that each such representation and warranty is true and correct, and
(b) covenants and other provisions in the Credit Agreement are applicable to it
or are imposed upon it and agrees to promptly and properly comply with or be
bound by each of them.
11. Reliance and Duty to Remain Informed. Each Guarantor confirms that it
------------------------------------
has executed and delivered this guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this guaranty. Each Guarantor confirms that it has made its own
independent investigation with respect to Borrower's creditworthiness and is not
executing and delivering this guaranty in reliance on any representation or
warranty by Agent or any Lender as to that creditworthiness. Each Guarantor
expressly assumes all responsibilities to remain informed of the financial
condition of Borrower and any circumstances affecting Borrower's ability to
perform under the Loan Documents to which it is a party or any collateral
securing any Guaranteed Debt.
12. No Reduction. The Guaranteed Debt may not be reduced, discharged, or
------------
released because or by reason of any existing or future offset, claim, or
defense (other than credits toward outstanding amounts in respect of payments
under this guaranty and except for the defense of complete and final payment of
the Guaranteed Debt) of Borrower or any other party against Agent or Lenders or
against payment of the Guaranteed Debt, whether that offset, claim, or defense
arises in connection with the Guaranteed Debt or otherwise. Those claims and
defenses include, without limitation, failure of consideration, breach of
warranty, fraud, bankruptcy, incapacity/infancy, statute of limitations, lender
liability, accord and satisfaction, usury, forged signatures, mistake,
impossibility, frustration of purpose, and unconscionability.
13. Bankruptcy. If any Guarantor becomes insolvent, fails to pay
----------
Guarantor's debts generally as they become due, voluntarily seeks (or consents
to or acquiesces in) any benefits of any Debtor Law, or becomes a party to (or
is made the subject of) any proceeding under any Debtor Law (other than as a
creditor or claimant) that could suspend or otherwise adversely affect the
Rights of Agent or any Lender under this guaranty, then, in any such event, the
Guaranteed Debt is automatically (as between that Guarantor, Agent,
Exhibit B
---------
3
and Lenders), a fully matured, due, and payable obligation of that Guarantor to
Agent and Lenders (without regard to whether Borrower is then in default under
the Credit Agreement or whether any of the Obligation is then due and owing by
Borrower), payable in full (i.e., the estimated amount owing in respect of the
contingent claim created under this guaranty) by Guarantor to Agent and Lenders
upon demand.
14. Loan Document. This guaranty is a Loan Document and is subject to the
-------------
applicable provisions of Sections 1 and 12 of the Credit Agreement, all of which
are incorporated into this guaranty by reference the same as if set forth in
this guaranty verbatim.
15. Communications. For purposes of Section 12.2 of the Credit Agreement,
--------------
each Guarantor's address and telecopy number are set forth on the signature page
to this guaranty.
16. Amendments, Etc. No amendment, waiver, or discharge to or under this
----------------
guaranty is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of Section 12.10 of the Credit Agreement.
17. Entirety. This guaranty represents the final agreement between the
--------
parties about the subject matter of this guaranty and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
18. Agent and Lenders. Agent is the agent for each Lender under the
-----------------
Credit Agreement. All Rights granted to Agent under or in connection with this
guaranty are for each Lender's ratable benefit. Agent may, without the joinder
of any Lender, exercise any Rights in Agent's or Lenders' favor under or in
connection with this guaranty. Agent's and each Lender's Rights and obligations
vis-a-vis each other may be subject to one or more separate agreements between
those parties. However, no Guarantor is required to inquire about any such
agreement and is not subject to any terms of it unless that Guarantor
specifically joins it. Therefore, neither any Guarantor nor its successors or
assigns is entitled to any benefits or provisions of any such separate agreement
or is entitled to rely upon or raise as a defense any party's failure or refusal
to comply with the provisions of it.
19. Parties. This guaranty benefits Agent, Lenders, and their respective
-------
successors and assigns and binds each Guarantor and each Guarantor's successors
and assigns. Upon appointment of any successor Agent under the Credit
Agreement, all of the Rights of Agent under this guaranty automatically vest in
that new Agent as successor Agent on behalf of Lenders without any further act,
deed, conveyance, or other formality other than that appointment. The Rights of
Agent and Lenders under this guaranty may be transferred with any assignment of
the Guaranteed Debt. The Credit Agreement contains provisions governing
assignments of the Guaranteed Debt and of Rights and obligations under this
guaranty.
Remainder of page intentionally blank.
Signature page follows.
4 Exhibit B
---------
EXECUTED as of the date first stated in this guaranty.
-----------------------------------
as Guarantor
(address)
-------------------------------
-------------------------------
By
------------------------------- -------------------------------
Tel Name:
--------------------------- ------------------------
Fax Title:
--------------------------- ------------------------
Agent executes this guaranty in acknowledgment of Paragraph 17 above.
BANK ONE, TEXAS, N.A., as Agent
By
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Signature Page to Guaranty Exhibit B
---------
EXHIBIT C
---------
PLEDGE AGREEMENT
----------------
06/30/99
THIS AGREEMENT is entered into as of March 12, 1997, between MATRIX
BANCORP, INC., a Colorado corporation formerly named Matrix Capital Corporation
("Debtor"), certain Lenders, and U.S. BANK NATIONAL ASSOCIATION as successor to
Bank One, Texas, N.A., as Agent for Lenders (in that capacity, "Secured Party").
Debtor, Lenders, and Agent have entered into the Credit Agreement (as
renewed, extended, amended, or restated, the "Credit Agreement") dated as of
March 12, 1997. As a continuing inducement to the Lenders to extend credit to
Debtor under the Credit Agreement, and as a condition precedent to that credit,
Debtor is executing and delivering this agreement for the benefit of Lenders and
Secured Party.
ACCORDINGLY, for adequate and sufficient consideration, Debtor and Secured
Party agree as follows:
SECTION 1. DEFINITIONS AND REFERENCES. Unless stated otherwise, (a) terms
--------- --------------------------
defined in the Credit Agreement or the UCC have the same meanings when used in
this agreement, and (b) to the extent permitted by Law, if in conflict (i) the
definition of a term in the Credit Agreement controls over the definition of
that term in the UCC, and (ii) the definition of a term in Article 9 of the UCC
controls over the definition of that term elsewhere in the UCC.
"Collateral" is defined in Section 2.2 of this agreement.
"Debtor" is defined in the preamble to this agreement and includes, without
limitation, Debtor, Debtor as a debtor-in-possession, and any receiver, trustee,
liquidator, conservator, custodian, or similar party appointed for Debtor or for
substantially all of Debtor's assets under any Debtor Law.
"Obligor" means any Person obligated with respect to any Collateral
(whether as an account debtor, obligor on an instrument, issuer of securities,
or otherwise).
"Pledged Securities" is defined in Section 2.2 of this agreement.
"Secured Party" is defined in the preamble to this agreement and includes
its successor appointed and acting as Agent for Lenders under the Loan
Documents.
"Security Interest" means the security interest granted and the pledge and
assignment made under Section 2.1 of this agreement, which is a Lender Lien
under the Credit Agreement.
SECTION 2. SECURITY INTEREST AND COLLATERAL.
--------- --------------------------------
2.1 Security Interest. To secure the full payment and performance of the
-----------------
Obligation, Debtor grants to Secured Party for Lenders a security interest in
the Collateral and pledges and assigns the Collateral to the Secured Party, all
upon and subject to the terms and conditions of this agreement. The grant of
the Security Interest does not subject the Secured Party or any Lender to the
terms of any Collateral or in any way transfer, modify, or otherwise affect any
of Debtor's obligations with respect to any Collateral or the Lender Liens under
the Credit Agreement.
2.2 Collateral. As used in this agreement, the term "Collateral" means
----------
the present and future items and types of property described below, whether now
owned or acquired in the future by Debtor. This description of Collateral does
not permit any action prohibited by any Loan Document.
Exhibit C
---------
C
All present and future shares of capital stock or other ownership
interest issued by Matrix Capital Bank, a federal savings bank (the
"Pledged Securities"), together with all present and future increases,
profits, combinations, reclassifications, dividends, and substitutes
and replacements for any of the foregoing and all present and future
cash and noncash proceeds of any of the foregoing, including, without
limitation, all cash, accounts, general intangibles, documents,
instruments, chattel paper, goods, and any other property received
upon the sale or disposition of any of the foregoing.
SECTION 3.REPRESENTATIONS AND WARRANTIES. By entering into this agreement,
--------- ------------------------------
and by each subsequent delivery of additional Collateral under this agreement,
Debtor reaffirms the representations and warranties contained in the Credit
Agreement. Debtor further represents and warrants to Secured Party for Lenders
as follows:
3.1 Binding Obligation. This agreement creates a legal, valid, and
------------------
binding Lender Lien in and to the Collateral in favor of Secured Party and is
enforceable against Debtor, except as enforcement may be limited by applicable
Debtor Laws and general principles of equity. The taking by Secured Party of
physical possession in Texas of the stock certificates or other instruments
representing the Pledged Securities will perfect the Security Interest in that
Collateral. Once perfected, the Security Interest will constitute a first-
priority Lender Lien on the Collateral, subject only to Permitted Liens. The
creation of the Security Interest does not require the consent of any Person
that has not been obtained.
3.2 Securities. All Pledged Securities are duly authorized, validly
----------
issued, fully paid, and non-assessable, and the transfer of them is not subject
to any restrictions other than restrictions imposed by applicable corporate and
securities Laws.
3.3 Additional Collateral. The foregoing representations and warranties
---------------------
will be true and correct in all respects with respect to any additional
Collateral or additional specific descriptions of certain Collateral delivered
to Secured Party in the future by Debtor.
The failure of any of these representations or warranties to be accurate and
complete does not impair the Security Interest in any Collateral.
SECTION 4.COVENANTS. Until all commitments by Secured Party and Lenders to
--------- ---------
extend credit under the Credit Agreement have been canceled or terminated and
the Obligation is fully paid and performed, Debtor covenants and agrees with
Secured Party for Lenders as follows:
4.1 Other Notices and Actions. Debtor shall promptly notify Secured Party
-------------------------
of (a) any change in any material fact or circumstance represented or warranted
by Debtor with respect to any of the Collateral, and (b) any claim, action, or
proceeding challenging the Security Interest or affecting title to all or any
material portion of the Collateral or the Security Interest (and, at Secured
Party's request, Debtor shall appear in and defend any such action or proceeding
at Debtor's expense).
4.2 Collateral In Trust. While a Default or Potential Default exists,
-------------------
Debtor shall upon request of Secured Party (unless prevented by operation of
applicable Law from making that request, in which event Debtor shall) (a) hold
in trust (and not commingle with its other assets) for Secured Party all of its
Collateral that is chattel paper, instruments, or documents of title at any time
received by it, (b) promptly deliver that Collateral to Secured Party unless
Secured Party at its option gives Debtor written permission to retain any of it,
and (c) cause each chattel paper, instrument, or document of title so retained
to be marked to state that it is assigned to Secured Party and each instrument
to be endorsed to the order of Secured Party (but failure to be so marked or
endorsed may not impair the Security Interest in any such Collateral).
2 Exhibit C
---------
4.3 Impairment of Collateral. Debtor may not do or permit any act that is
------------------------
reasonably likely to adversely impair the value of any Collateral.
SECTION 5. DEFAULT AND REMEDIES. If a Default exists, then Secured Party may,
--------- --------------------
at its election (but subject to the terms and conditions of the Credit
Agreement), exercise any and all Rights available to a secured party under the
UCC, in addition to any and all other Rights afforded by the Loan Documents, at
Law, in equity, or otherwise, including, without limitation (a) requiring Debtor
to assemble all or part of the Collateral and make it available to Secured Party
at a place to be designated by Secured Party which is reasonably convenient to
Debtor and Secured Party, (b) surrendering any policies of insurance on all or
part of the Collateral and receiving and applying the unearned premiums as a
credit on the Obligation, (c) applying by appropriate judicial proceedings for
appointment of a receiver for all or part of the Collateral (and Debtor hereby
consents to any such appointment), and (d) applying to the Obligation any cash
held by Secured Party or any Lender under the Loan Documents.
5.1 Notice. Reasonable notification of the time and place of any public
------
sale of the Collateral, or reasonable notification of the time after which any
private sale or other intended disposition of the Collateral is to be made,
shall be sent to Debtor and to any other Person entitled to notice under the
UCC. If any Collateral threatens to decline speedily in value or is of the type
customarily sold on a recognized market, Secured Party may sell or otherwise
dispose of the Collateral without notification, advertisement, or other notice
of any kind. Notice sent or given not less than five calendar days before the
taking of the action to which the notice relates is reasonable notification and
notice for the purposes of this section.
5.2 Sales of Securities. In connection with the sale of any Collateral
-------------------
that is securities, Secured Party is authorized, but not obligated, to limit
prospective purchasers to the extent deemed necessary or desirable by Secured
Party to render that sale exempt from the registration and similar requirements
under applicable corporate and securities Laws, and no sale so made in good
faith by Secured Party may be deemed not to be "commercially reasonable" because
so made.
5.3 Other Sales. Secured Party's sale of less than all Collateral does
-----------
not exhaust Secured Party's Rights under this agreement and Secured Party is
specifically empowered to make successive sales until all Collateral is sold.
If the proceeds of a sale of less than all Collateral is less than the Secured
Obligation, then this agreement and the Security Interest remain in full force
and effect as to the unsold portion of the Collateral just as though no sale had
been made. In the event any sale under this agreement is not completed or is,
in Secured Party's opinion, defective, that sale does not exhaust Secured
Party's Rights under this agreement, and Secured Party is entitled to cause a
subsequent sale or sales to be made. All statements of fact or other recitals
made in any ▇▇▇▇ of sale or assignment or other instrument evidencing any
foreclosure sale under this agreement -- whether about nonpayment of the Secured
Obligation, the occurrence of any Default, Secured Party's having declared all
of the Obligation to be due and payable, notice of time, place, and terms of
sale and the properties to be sold having been duly given, or any other act or
thing having been duly done by Secured Party -- shall be taken as prima facie
evidence of the truth of the facts so stated and recited. Secured Party may
appoint or delegate any one or more Persons as agent to perform any act or acts
necessary or incident to any sale held by Secured Party, including the sending
of notices and the conduct of sale, but such acts must be done in the name and
on behalf of Secured Party.
5.4 Obligors. While a Default exists, Secured Party may notify or require
--------
each Obligor to make payment directly to Secured Party, and Secured Party may
take control of the proceeds paid to Secured Party. Until Secured Party elects
to exercise these Rights, Debtor is authorized to collect and enforce the
Collateral and to retain and expend all payments made on Collateral. While
Secured Party is entitled to and elects to exercise these Rights, Secured Party
has the Right in its own name or in the name of Debtor to (a) compromise or
extend time of payment with respect to Collateral for such amounts and upon such
terms as Secured Party may reasonably determine, (b) demand, collect, receive,
receipt for, ▇▇▇ for, compound, and give acquittance for any and all amounts due
or to become due with respect to Collateral, (c) take control of cash and other
proceeds of any Collateral, (d) endorse the applicable Pledgor's name on any
notes, acceptances, checks, drafts, money orders, or other evidences of payment
on Collateral that may come into
3 Exhibit C
---------
Secured Party's possession, (e) sign Debtor's name on any invoice or ▇▇▇▇ of
lading relating to any Collateral, on any drafts against Obligors or other
Persons making payment with respect to Collateral, on assignments and
verifications of accounts or other Collateral, and on notices to Obligors making
payment with respect to Collateral, (f) send requests for verification of
obligations to any Obligor, and (gi) do all other acts and things reasonably
necessary to carry out the intent of this agreement. If any Obligor fails to
make payment on any Collateral when due while a Default exists, Secured Party is
authorized, in its sole discretion, either in its own name or in Debtor's name,
to take such action as Secured Party reasonably shall deem appropriate for the
collection of any amounts owed with respect to Collateral or upon which a
delinquency exists. However, Secured Party is neither (A) liable for its failure
to collect, or for its failure to exercise diligence in the collection of, any
amounts owed with respect to Collateral (except for its own fraud, gross
negligence, willful misconduct, or violation of any applicable law), nor (B)
under any duty whatsoever to anyone except Debtor and Lenders to account for
funds that it shall actually receive under this agreement. A receipt given by
Secured Party to any Obligor is a full and complete release, discharge, and
acquittance to that Obligor, to the extent of any amount so paid to Secured
Party. While a Default exists, Secured Party may apply or set off amounts paid
and the deposits against any liability of Debtor to Secured Party. Regarding the
existence of Default for purposes of this agreement, Debtor agrees that the
Obligors on any Collateral may rely upon written certification from Secured
Party that a Default exists.
5.5 Power-of-Attorney. Secured Party is deemed to be irrevocably
-----------------
appointed as Debtor's agent and attorney-in-fact with the Right to enforce all
of Debtor's Rights under or in connection with the Collateral effective and
operable at all times while a Default exists. All reasonable costs, expenses,
and liabilities incurred and all payments made by Secured Party as Debtor's
agent and attorney-in-fact (including, without limitation, reasonable attorney's
fees and expenses) are considered a loan by Secured Party to Debtor that is
repayable on demand, accrues interest at the Default Rate until paid, and is
part of the Obligation.
5.6 Application of Proceeds. Secured Party shall apply the proceeds of
-----------------------
any sale or other disposition of the Collateral under this Section 5 in the
order and manner specified in Section 3.9 of the Credit Agreement. Any surplus
remaining shall be delivered to Debtor or as a court of competent jurisdiction
may direct. If the proceeds are insufficient to pay the Obligation in full,
Debtor remains liable for any deficiency.
SECTION 6. OTHER RIGHTS.
--------- -----------
6.1 Performance. If Debtor fails to preserve the priority of the Security
-----------
Interest in any of the Collateral or otherwise fail to perform any of its
obligations under any Loan Documents with respect to the Collateral, then
Secured Party may, at its option, but without being required to do so, prosecute
or defend any suits in relation to the Collateral or take all other action which
Debtor is required, but has failed or refused, to take under the Loan Documents.
Any sum which may be expended or paid by Secured Party under this section
(including, without limitation, court costs and attorneys' fees) shall bear
interest from the dates of expenditure or payment at the Default Rate until paid
and, together with such interest, shall be payable by Debtor to Secured Party
upon demand and is part of the Obligation.
6.2 Record Ownership of Securities. While a Default exists, Secured Party
------------------------------
may have any Collateral that is securities and that is in the possession of
Secured Party, or its nominee or nominees, registered in its name or in the name
of its nominee or nominees as pledgee.
6.3 Voting of Securities. As long as no Default exists, Debtor may
--------------------
exercise all voting Rights pertaining to any Collateral that is securities.
While a Default exists, the Right to vote any Collateral that is securities is
vested exclusively in Secured Party. Accordingly, Debtor irrevocably
constitutes and appoints Secured Party as Debtor's proxy and attorney-in-fact --
effective only after notice to Debtor and while a Default exists but with full
power of substitution -- to vote and to act with respect to any Collateral that
is securities standing in the name of Debtor or with respect to which Debtor is
entitled to vote and act. That proxy is coupled with an interest, is
irrevocable, and continues until the Obligation are fully paid and performed.
4 Exhibit C
---------
6.4 Certain Proceeds. The provisions of this Section 6.4 are applicable
----------------
only while a Default exists. Notwithstanding any contrary provision, all
dividends or distributions of property in respect of, and all proceeds of, any
Collateral that is securities -- whether those dividends, distributions, or
proceeds result from a subdivision, combination, or reclassification of the
outstanding capital stock of any issuer or as a result of any merger,
consolidation, acquisition, or other exchange of assets to which any issuer may
be a party, or otherwise -- are part of the Collateral, shall, if received by
Debtor, be held in trust for Secured Party's benefit, and shall immediately be
delivered to Secured Party (accompanied by proper instruments of assignment or
stock or bond powers executed by Debtor in accordance with Secured Party's
instructions) to be held subject to the terms of this agreement. Any cash
proceeds of any Collateral that come into Secured Party's possession (including,
without limitation, insurance proceeds) may, at Secured Party's option, be
applied in whole or in part to the Obligation (to the extent then due), be fully
or partially released to or under the written instructions of Debtor for any
general or specific purpose, or be fully or partially retained by Secured Party
as additional Collateral. Any cash Collateral in Secured Party's possession may
be invested by Secured Party in certificates of deposit issued by Secured Party,
any Lender, or any other state or national bank having combined capital and
surplus greater than $100,000,000 or in securities issued or guaranteed by the
United States of America or any of its agencies. Secured Party is never
obligated to make any investment and never has any liability to Debtor or any
Lender for any loss that may result from any investment or non-investment. All
interest and other amounts earned from any investment may be dealt with by
Secured Party in the same manner as other cash Collateral.
SECTION 7. MISCELLANEOUS.
--------- -------------
7.1 Miscellaneous. Because this agreement is a "Loan Document" referred
-------------
to in the Credit Agreement, the provisions relating to Loan Documents in
Sections 1 and 12 of the Credit Agreement are incorporated into this agreement
by reference the same as if included in this agreement verbatim.
7.2 Term. This agreement terminates upon full payment and performance of
----
the Obligation. No Obligor is ever obligated to make inquiry of the termination
of this agreement but is fully protected in making any payments on the
Collateral directly to Secured Party.
7.3 Matters Not Relevant. The Security Interest, Debtor's obligations,
--------------------
and Secured Party's and Lenders' Rights under this agreement are not released,
diminished, impaired, or adversely affected by any one or more of the following:
(a) Secured Party's or any Lender taking or accepting any additional -- or any
release, surrender, exchange, subordination, or loss of any other -- guaranty,
assurance, or security for any of the Obligation; (b) any full or partial
release of any other Person obligated on any of the Obligation; (c) the
modification or assignment of -- or waiver of compliance with -- any other Loan
Document; (d) any present or future insolvency, bankruptcy, or lack of
corporate, partnership, or trust power of any other Person obligated on any of
the Obligation; (e) any renewal, extension, or rearrangement of any of the
Obligation, or any adjustment, indulgence, forbearance, or compromise granted to
any Person obligated on any of the Obligation; (f) any Person's neglect, delay,
omission, failure, or refusal to take or prosecute any action in connection with
any of the Obligation; (g) any existing or future affect, claim, or defense
(other than credits toward outstanding amounts in respect of application of
proceeds of Collateral under this agreement and except for the defense of full
and final payment of the Obligation) of Debtor or any other Person against
Secured Party or any Lender; (h) the unenforceability of any of the Obligation
against any Person obligated or any of the Obligation because it exceeds the
amount permitted by Law, the act of creating it is ultra ▇▇▇▇▇, or the officers,
partners, or trustees creating it exceeded their authority or violated their
fiduciary duties, or otherwise; (i) any payment of the Obligation is held to
constitute a preference under any Debtor Law or for any other reason Secured
Party or any Lender is required to refund any payment or make payment to another
Person; or (j) any Person's failure to notify Debtor, Secured Party, or any
Lender of their acceptance of this agreement or any Person's failure to notify
Debtor about the foregoing events or occurrences, and Debtor waives any notice
of any kind under any circumstances whatsoever with respect to this agreement or
any of the Obligation other than as specifically provided in this agreement.
5 Exhibit C
---------
7.4 Waivers. Except to the extent expressly otherwise provided in the
-------
Loan Documents, Debtor waives (a) any Right to require Secured Party or any
Lender to proceed against any other Person, to exhaust its Rights in the
Collateral, or to pursue any other Right which Secured Party or any Lender may
have, and (b) all Rights of marshaling in respect of the Collateral.
7.5 Financing Statement. Secured Party may, at any time, file this
-------------------
agreement or a carbon, photographic, or other reproduction of this agreement as
a financing statement, but Secured Party's failure to do so does not impair the
validity or enforceability of this agreement.
7.6 Parties. This agreement binds and inures to Debtor, Secured Party,
-------
and each Lender, and their respective successors and permitted assigns. Only
those Persons may rely or raise any defense about this agreement.
(a) Assignments. Debtor may not assign any Rights or obligations
-----------
under this agreement without first obtaining the written consent of Secured
Party and all Lenders. Secured Party's Rights under this agreement may be
assigned to any successor agent appointed under the Credit Agreement. Any
Lender may assign, pledge, and otherwise transfer all or any of its Rights
under this agreement to any participant or transferee permitted by the
Credit Agreement.
(b) Secured Party. Secured Party is the agent for each Lender.
-------------
Secured Party may, without the joinder of any Lender, exercise any Rights
in favor of any of them under this agreement. The Rights of Secured Party
and Lenders vis-a-vis each other may be subject to other agreements between
them. Neither Debtor nor its successors or permitted assigns need to
inquire about any such agreement or be subject to the terms of it unless
they join in it and, therefore, are not entitled to the benefits of any
such agreement or entitled to rely upon or raise as a defense the failure
of any party to comply with it.
7.7 Entire Agreement. This agreement and the other loan documents
----------------
represent the final agreement between the parties with respect to the subject
matter thereof and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.
Remainder of page intentionally blank.
Signature page follows.
6 Exhibit C
---------
EXECUTED as of the date first stated above.
MATRIX CAPITAL SERVICES CORPORATION, BANK ONE, TEXAS, N.A., AGENT, as
as Debtor Secured Party
By By
------------------------------------- ---------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Office ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
and President
The undersigned agrees that to the extent that any of the stock certificates
evidencing any of the capital stock that is included in the Collateral bear any
restrictive legend in respect of the transfer of those certificates, then, in
each case, the undersigned waives the requirements of those restrictive legends
in respect of the pledge of those shares of capital stock to Secured Party.
MATRIX CAPITAL BANK
By
-------------------------------------
Name:
-------------------------------
Title:
-------------------------------
Signature Page to Pledge Agreement Exhibit C
---------
ANNEX A
-------
ASSIGNMENT SEPARATE FROM STOCK CERTIFICATE
------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto___
________________________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS OF ASSIGNEE)
________________________________________________________________________________
---------------------------------
| INSERT SOCIAL SECURITY |
| OR OTHER IDENTIFICATION |
| NUMBER OF ASSIGNEE |
---------------------------------
__________________________________________________(_____________________) shares
of the ______________________________________________________ Capital Stock of
MATRIX CAPITAL BANK standing in ________________________ name on the books of
that bank as represented by Certificate
No.(s)_________________________________________________________________________
that accompany(ies) this assignment, and hereby irrevocably constitutes and
appoints _________________attorney to transfer that stock on the books of that
bank with full power of substitution in the premises.
EXECUTED as of March 12, 1997.
MATRIX CAPITAL CORPORATION
By ___________________________________
▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive
Officer and President
Exhibit C
---------
SECOND AMENDED EXHIBIT D-1 06/30/99
--------------------------
BORROWING REQUEST
-----------------
AGENT: U.S. Bank National Association DATE: _______________, 199___
BORROWER: Matrix Bancorp, Inc.
--------------------------------------------------------------------------------
This request is delivered under the Credit Agreement (as renewed, extended,
and amended, the "Credit Agreement") dated as of March 12, 1997, between
Borrower, Agent, and certain Lenders. Terms defined in the Credit Agreement
have the same meanings when used, unless otherwise defined, in this request.
Borrower requests a $____________________________/1/ Borrowing (the
"Requested Borrowing") under the Revolving Facility to be funded on
________________________________, 199_____ /2/ (the "Requested Borrowing Date").
Borrower certifies to Agent and Lenders that (a) the proceeds of the
Requested Borrowing shall be promptly paid to Matrix Bank as a contribution to
its capital or are to refinance contributions to the capital of Matrix Bank
already made by Borrower and for none of which Borrower has requested any other
Borrowing, and (b) after giving effect to the Requested Borrowing, the Principal
Debt of the Revolving Facility will not exceed the least of (i) the Commitments
for the Revolving Facility, (which are $10,000,000), and (ii) 40% of the book
value of Matrix Bank's issued and outstanding capital stock subject to Lender
Liens (which is 40% x $________________________ = $__________________________).
Borrower certifies that on the date of this request and on the Requested
Borrowing Date (after giving effect to the Requested Borrowing) (a) the
representations and warranties of Borrower in the Loan Documents are true and
correct in all material respects except to the extent that (i) a representation
or warranty speaks to a specific date or (ii) the facts on which a
representation or warranty is based have changed by transactions or conditions
contemplated or permitted by the Loan Documents, (b) no Default or Potential
Default exists, and (c) the extension of the Requested Borrowing does not cause
any Borrowing Excess to exist.
MATRIX BANCORP, INC., as Borrower
By ____________________________________________
Name: ___________________________________
/3/Title: _______________________________
------------------------
/1/ Must be a Responsible Officer of Borrower.
/2/ Must be $500,000 or a greater integral multiple of $100,000.
/3/ Must be at least the Business Day after date of request.
Second Amended Exhibit D-1
--------------------------
06/30/99
THIRD AMENDED EXHIBIT D-2
-------------------------
COMPLIANCE CERTIFICATE
----------------------
AGENT: U.S. Bank National Association DATE:______________, 19___
BORROWER: Matrix Bancorp, Inc.
SUBJECT PERIOD: ________________ ended ________________, 199____
================================================================================
This certificate is delivered under the Credit Agreement (as renewed,
extended, and amended, the "Credit Agreement") dated as of March 12, 1997,
between Borrower, Agent, and certain Lenders. Terms defined in the Credit
Agreement have the same meanings when used, unless otherwise defined, in this
certificate.
The undersigned officer certifies to Agent and Lenders, that on the date of
this certificate:
1. The undersigned officer is the officer of Borrower designated below.
2. ___________________________________________ (Borrower's or Matrix
Bank's) Financial Statements that are attached to this certificate were prepared
in accordance with GAAP and present fairly _____________________________________
(Borrower's or Matrix Bank's) __________________________________ (consolidated,
consolidating, or both) financial condition and results of operations as of (and
for the fiscal year or portion of the fiscal year ending on) the last day of the
Subject Period.
3. The proceeds of all Borrowings have been promptly paid to Matrix Bank
as a contribution to its capital or have refinanced contributions to the capital
of Matrix Bank already made by Borrower and for none of which Borrower has
requested any other Borrowing. The Principal Debt of the Revolving Facility
does not exceed the least of (a) the Commitments for the Revolving Facility
(which are $10,000,000), and (b) 40% of the book value of Matrix Bank's issued
and outstanding capital stock subject to Lender Liens (which is 40% x
$___________________________________ = $______________________________________).
4. The undersigned officer supervised a review of the Companies'
activities during the Subject Period in respect of the following matters and has
determined the following: (a) The representations and warranties in the Credit
Agreement are true and correct in all material respects, except (i) to the
extent that a representation or warranty speaks to a specific date or the facts
on which it is based have changed by transactions or conditions contemplated or
permitted by the Loan Documents and (ii) for the changes, if any, described on
the attached Schedule 1; (b) each Company has complied with all of its
obligations under the Loan Documents, other than for the deviations, if any,
described on the attached Schedule 1; (c) no Default or Potential Default exists
or is imminent, other than those, if any, described on the attached Schedule 1;
and (d) the Companies' compliance with certain financial covenants in Sections 8
and 9 of the Credit Agreement is accurately calculated on the attached Schedule
1.
By ______________________________________________
Name: ________________________________________
/1/Title: ____________________________________
______________________
/1/ Must be a Responsible Officer of Borrower.
Third Amended Exhibit D-2
-------------------------
SCHEDULE 1
----------
A. Describe deviations from compliance with obligations, if any -- clause
4(a) and 4(b) of attached Compliance Certificate -- if none, so state:
B. Describe Potential Defaults or Defaults, if any -- clause 4(c) of the
attached Compliance Certificate -- if none, so state:
C. Calculate compliance with certain covenants in Sections 8 and 9 at end
of Subject Period (on a consolidated basis, if applicable) -- clause 4(d) of the
attached Compliance Certificate. The following table is a short-hand reflection
of that compliance and must be completed fully in accordance with the express
language of the Credit Agreement:
===================================================================================================================================
Covenant At End of Subject Period
===================================================================================================================================
1. Net Worth -- Sec. 9.1
-----------------------------------------------------------------------------------------------------------------------------------
(a) First minimum $40,000,000
-----------------------------------------------------------------------------------------------------------------------------------
(b) 90% of actual Net Worth at the end of the most recent fiscal year $
-----------------------------------------------------------------------------------------------------------------------------------
(c) 50% of the Companies' cumulative Net Income (without deduction for losses) after
the end of the most recent fiscal year
-----------------------------------------------------------------------------------------------------------------------------------
(d) 90% of all contributions made to stockholders' equity after the Closing Date $
-----------------------------------------------------------------------------------------------------------------------------------
(e) Second Minimum sum of Lines 1(b) through 1(d) $
-----------------------------------------------------------------------------------------------------------------------------------
(f) Actual Net Worth -- may not be less than the greater of Lines 1(a) and 1(e) $
===================================================================================================================================
2. Adjusted Debt/Net Worth -- Sec. 9.2
-----------------------------------------------------------------------------------------------------------------------------------
(a) Debt of Companies $
-----------------------------------------------------------------------------------------------------------------------------------
(b) Bank repurchase obligations $
-----------------------------------------------------------------------------------------------------------------------------------
(c) Escrow-arbitrage-type-facility obligations $
-----------------------------------------------------------------------------------------------------------------------------------
(d) Deposits at Matrix Bank $
-----------------------------------------------------------------------------------------------------------------------------------
(f) Adjusted Debt -- sum of Line 2(a) minus Lines 2(b) through 2(e) $
-----------------------------------------------------------------------------------------------------------------------------------
(g) Ratio of Line 2(f) to Line 1(f) -- may not exceed 4.0 to 1.0 ____ to 1.0
===================================================================================================================================
2 Third Amended Exhibit D-2
-------------------------
==================================================================================================================================
3. Cash Dividends/Expenses and CMLTD - Sec. 9.3 (calculated for quarter each four quarters)
----------------------------------------------------------------------------------------------------------------------------------
(a) Cash dividends available to Borrower $
----------------------------------------------------------------------------------------------------------------------------------
(b) Tax sharing payments received by Borrower $
----------------------------------------------------------------------------------------------------------------------------------
(c) Cash expenses paid by Borrower $
----------------------------------------------------------------------------------------------------------------------------------
(d) Current maturities of long-term Debt of Borrower $
----------------------------------------------------------------------------------------------------------------------------------
(e) Total of Lines 3(a) and (b) $
----------------------------------------------------------------------------------------------------------------------------------
(f) Total of Lines 3(c) and (d) $
----------------------------------------------------------------------------------------------------------------------------------
(g) Ratio of Line 3(e) to Line 3(f) -- may not be less than 1.5 to 1.0 ______ to 1.0
==================================================================================================================================
4. Net Income -- Sec. 9.4 (calculated only for Matrix Bank for each four-fiscal-quarter-period: $
Actual net income (less deduction for minority interests) -- may not be less than $7,500,000
==================================================================================================================================
5. Capital Ratio -- Sec. 9.5 (only for Matrix Bank)
----------------------------------------------------------------------------------------------------------------------------------
(a) Maintains "well capitalized" designation by OTS for its "Risk Base Capital" -- insert Yes or No
----------------------------------------------------------------------------------------------------------------------------------
(b) "Risk Base Capital Ratio" -- may not be less than 10% %
==================================================================================================================================
6. Leverage Ratio -- Sec. 9.6 (Matrix Bank only)
----------------------------------------------------------------------------------------------------------------------------------
(a) Maintains "well capitalized" designation by OTS for its "Leverage" -- insert Yes or No
----------------------------------------------------------------------------------------------------------------------------------
(b) "Leverage Ratio" -- may not be less than 5.0% %
==================================================================================================================================
7. Classified Assets/Total Capital -- Sec. 9.7 (Matrix Bank only)
----------------------------------------------------------------------------------------------------------------------------------
(a) Classified Assets
----------------------------------------------------------------------------------------------------------------------------------
(i) Assets classified as "substantial," "doubtful," or "loss" by regulators $
----------------------------------------------------------------------------------------------------------------------------------
(ii) Assets subject to other credit quality supervision $
----------------------------------------------------------------------------------------------------------------------------------
(iii)Other Real Estate owned $
----------------------------------------------------------------------------------------------------------------------------------
(iv) Other Impaired Assets $
----------------------------------------------------------------------------------------------------------------------------------
(v) Sum of Lines 7(a)(i) through 7(a)(iv) $
----------------------------------------------------------------------------------------------------------------------------------
(b) Total Capital
----------------------------------------------------------------------------------------------------------------------------------
(i) Stated par value of common stock $
----------------------------------------------------------------------------------------------------------------------------------
(ii) Stated par value of perpetual preferred stock $
----------------------------------------------------------------------------------------------------------------------------------
(iii)Undivided profits, surplus, or retained earnings $
----------------------------------------------------------------------------------------------------------------------------------
(iv) "Loan Loss reserve" account $
----------------------------------------------------------------------------------------------------------------------------------
(v) Continuous reserve $
----------------------------------------------------------------------------------------------------------------------------------
(vi) Sum of Lines 7(b)(i) through 7(b)(v) $
----------------------------------------------------------------------------------------------------------------------------------
(c) Ratio of Line 7(a)(v) to Line 7(b)(vi) (stated as percentage) -- may not exceed 50% $
==================================================================================================================================
8. Net Charge Offs/Total Loans -- Sec. 9.8 (Matrix Bank only)
----------------------------------------------------------------------------------------------------------------------------------
(a) Net Charge Offs $
----------------------------------------------------------------------------------------------------------------------------------
(b) Total loans $
----------------------------------------------------------------------------------------------------------------------------------
(c) Ratio of Line 8(a) to Line 8(b) -- (stated as a percentage) -- may not exceed 0.50% %
==================================================================================================================================
9. Adjusted Assets/Total Assets -- Sec. 9.9 (Matrix Bank only)
----------------------------------------------------------------------------------------------------------------------------------
(a) Adjusted Assets
==================================================================================================================================
3 Third Amended Exhibit D-2
-------------------------
----------------------------------------------------------------------------------------------------------------------------------
(i) Cash $
----------------------------------------------------------------------------------------------------------------------------------
(ii) Cash Equivalents $
----------------------------------------------------------------------------------------------------------------------------------
(iii) Loans that are not non-residential commercial loans $
----------------------------------------------------------------------------------------------------------------------------------
(iv) Mortgage-backed Securities $
----------------------------------------------------------------------------------------------------------------------------------
(v) Sum of Lines 9(a)(i) through 9(a)(iv) $
----------------------------------------------------------------------------------------------------------------------------------
(b) Total Assets $
----------------------------------------------------------------------------------------------------------------------------------
(c) Ratio of Line 9(a)(v) to Line 9(b) (stated as a percentage) -- must not be less than %
greater of (1) minimum required under HOLA for "QTL" or (2) 60%
==================================================================================================================================
10. Interest Rate Sensitivity -- Sec. 9.10. May not exceed $10,000,000 (Matrix Bank only) $
==================================================================================================================================
11. Commercial Loans/Total Capital -- Sec. 9.11 (Matrix Bank only)
----------------------------------------------------------------------------------------------------------------------------------
(a) Commercial Loans $
----------------------------------------------------------------------------------------------------------------------------------
(b) Total Capital $
----------------------------------------------------------------------------------------------------------------------------------
(c) Ratio of Line 11(a) to Line 11(b) (stated as a percentage) -- must not be greater than 200% %
==================================================================================================================================
4 Third Amended Exhibit D-2
-------------------------
EXHIBIT E
---------
OPINION OF COUNSEL
------------------
Matters to which Jenkens & ▇▇▇▇▇▇▇▇▇, P.C., of Dallas, Texas, counsel to the
Companies, are to opine as of the Closing Date:
1. Each Company is a corporation or bank duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
organization and is duly qualified and in good standing as a foreign corporation
in each jurisdiction where qualification or licensing is required by the nature
of its business or the character and location of its property, business, or
customers and in which the failure to have such license, authorization, consent,
approval, or qualification, as the case may be, in the aggregate, could have a
material adverse effect on the ability of any Company to perform its obligations
under the Loan Documents.
2. Each Company possesses all requisite corporate power and authority to
conduct its business as is now being conducted and as proposed under the Loan
Documents to be conducted and to own and operate its assets as now owned and
operated and as proposed to be owned and operated under the Loan Documents.
3. The execution and delivery by each Company of each Loan Document to
which it is a party and the performance by it of its obligations under those
Loan Documents (a) are within its corporate power, (b) have been duly authorized
by all necessary corporate action, (c) require no action by or filing with any
governmental authority (except any action or filing that has been taken or made
on or before the date of this opinion), (d) do not violate any provision of its
charter or bylaws, and (e) do not violate any provision of law applicable to it
or any material agreement to which it is a party.
4. Each Loan Document constitutes a legal and binding obligation of each
Company party to it, enforceable against that Company in accordance with that
Loan Document's terms.
5. To the best of our knowledge, no Company is subject to, nor under the
threat of, any Litigation that is reasonably likely to be determined adversely
to any Company. There exist no outstanding and unpaid judgments against any
Company.
6. Borrower is duly registered under the Savings and Loan Holding Company
Act, as amended. No Company is subject to regulation under the Investment
Company Act of 1940 or the Public Utility Holding Company Act of 1935, as they
may be amended.
7. The Pledge Agreement creates valid security interests (the "Security
Interests") in the pledged securities described in it that have been issued by
Matrix Bank (the "Collateral"). The Security Interests in the Collateral will
be properly perfected by Agent's possession of the Collateral.
Exhibit E
---------
06/30/99
AMENDED EXHIBIT F
-----------------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is entered into effective as of
__________________, 199____, between ________________________ ("Assignor"), and
________________________________ ("Assignee").
MATRIX BANCORP, INC., a Colorado corporation formerly named Matrix Capital
Corporation ("Borrower"), certain lenders ("Lenders"), and U.S. BANK NATIONAL
ASSOCIATION (in its capacity as Agent for Lenders, "Agent"), are party to the
Credit Agreement (as renewed, extended, amended, or restated, the "Credit
Agreement") dated as of March 12, 1997, all of the defined terms in which have
the same meanings when used -- unless otherwise defined -- in this agreement.
This agreement is entered into as required by Section 12.14 of the Credit
Agreement and is not effective until consented to by Borrower and Agent, which
consents may not under the Credit Agreement be unreasonably withheld.
ACCORDINGLY, for adequate and sufficient consideration, Assignor and
Assignee agree as follows:
1. Assignment and Assumption. By this agreement, and effective as of
-------------------------
_____________________, 199____, (the "Effective Date"), Assignor sells and
assigns to Assignee (without recourse to Assignor) and Assignee purchases and
assumes from Assignor an interest in and to all of Assignor's Rights and
obligations under the Credit Agreement (except any Rights and obligations
pertaining to Assignor's role as Agent if applicable) as of the Effective Date,
including, without limitation, a __________% interest in Assignor's total
Commitment, a corresponding amount of the Principal Debt outstanding under
Assignor's existing Notes, all interest accruing in respect of the interests
assigned above (collectively, the "Assigned Interests") after the Effective
Date, and all commitment fees accruing in respect of the Assigned Interest after
the Effective Date.
2. Assignor Provisions. Assignor (a) represents and warrants to Assignee that
-------------------
as of the Effective Date (i) $_____________________________ and
$______________________________ are outstanding (without reduction for any
assignments that have not yet become effective) respectively under the
Assignor's Term Note and Revolving Note, (ii) Assignor is the legal and
beneficial owner of the Assigned Interest, which is free and clear of any
adverse claim, and (iii) Assignor has not been notified of an existing Default
or Potential Default, and (b) makes no representation or warranty to Assignee
and assumes no responsibility to Assignee with respect to (i) any statements,
warranties, or representations made in or in connection with any Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of any Loan Document, or (iii) the financial condition of
any Company or the performance or observance by any Company of any of its
obligations under any Loan Document.
3. Assignee Provisions. Assignee (a) represents and warrants to Assignor,
-------------------
Borrower, and Agent that Assignee is legally authorized to enter into this
agreement and each other Loan Document to which it will become a party, (b)
confirms that it has received a copy of the Credit Agreement, copies of the
Current Financials, and such other documents and information as it deems
appropriate to make its own credit analysis and decision to enter into this
agreement, (c) agrees with Assignor, Borrower, and Agent that Assignee shall --
independently and without reliance upon Agent, Assignor, or any other Lender and
based on such documents and information as Assignee deems appropriate at the
time -- continue to make its own credit decisions in taking or not taking action
under the Loan Documents, (d) appoints and authorizes Agent to take such action
as agent on its behalf and to exercise such powers under the Loan Documents as
are delegated to Agent by the terms of the Loan Documents and all other
reasonably-incidental powers, (e) agrees with Assignor, Borrower, and Agent that
Assignee shall perform and comply with all provisions of the Loan Documents
applicable to Lenders in accordance with their respective terms, and (f) if
Assignee is not organized under the Laws of the United States of America or one
of its states, it (i) represents and warrants to Assignor, Agent, and Borrower
that no Taxes are required to be withheld by Assignor, Agent, or Borrower with
respect to any payments to be made to it in respect of the Obligation, and it
has furnished to Agent and Borrower two duly
Amended Exhibit F
-----------------
completed copies of either U.S. Internal Revenue Service Form 4224, Form 1001,
Form W-8, or any other form acceptable to Agent that entitles Assignee to
exemption from U.S. federal withholding Tax on all interest payments under the
Loan Documents, (ii) covenants to provide Agent and Borrower a new Form 4224,
Form 1001, Form W-8, or other form acceptable to Agent upon the expiration or
obsolescence of any previously delivered form according to Law, duly executed
and completed by it, and to comply from time to time with all Laws with regard
to the withholding Tax exemption, and (iii) agrees with Agent and Borrower that,
if any of the foregoing is not true or the applicable forms are not provided,
then Agent and Borrower (without duplication) may deduct and withhold from
interest payments under the Loan Documents any United States federal-income Tax
at the full rate applicable under the IRC.
4. Credit Agreement and Commitments. From and after the Effective Date (a)
--------------------------------
Assignee shall be a party to the Credit Agreement and (to the extent provided in
this agreement) have the Rights and obligations of a Lender under the Loan
Documents and (b) Assignor shall (to the extent provided in this agreement)
relinquish its Rights and be released from its obligations under the Loan
Documents. On the Effective Date, after giving effect to this and certain other
assignment and assumption agreements that become effective on the Effective
Date, but without giving effect to any other assignments that have not yet
become effective, Assignor's and Assignee's Commitments will be as follows:
==============================================================
Lender Term Loan Revolving Facility Combined
Commitments
==============================================================
Assignor $ $ $
--------------------------------------------------------------
Assignee $ $ $
==============================================================
5. Notes. Assignor and Assignee request Borrower to issue new Notes to
-----
Assignor and Assignee in the amounts of their respective commitments under
Paragraph 4 above and otherwise issue these Notes in accordance with the Credit
Agreement. Upon delivery of those Notes, Assignor shall return to Borrower all
Notes previously delivered to Assignor under the Credit Agreement.
6. Payments and Adjustments. From and after the Effective Date, Agent shall
------------------------
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees, and other amounts) to Assignee. Assignor and
Assignee shall make all appropriate adjustments in payments for periods before
the Effective Date by Agent or with respect to the making of this assignment
directly between themselves. Assignor agrees to apply any payments and proceeds
with respect to the Obligation ratably with Assignee.
7. Conditions Precedent. Paragraphs 1 through 6 above are not effective until
--------------------
(a) counterparts of this agreement are executed by Assignor, Assignee, Agent,
and Borrower, and are delivered to Agent and Borrower and (b) pursuant to
Section 12.14(a)(ii), Assignor pays to Agent an administrative transfer fee of
$2,500. If Agent is the Assignor, the requirement of Section 12.14(a)(ii) is
waived with regard to this agreement.
8. Incorporated Provisions. Although this agreement is not a Loan Document,
-----------------------
the provisions of the Credit Agreement applicable to Loan Documents are
incorporated into this instrument by reference the same as if this agreement
were a Loan Document and those provisions were set forth in this agreement
verbatim.
9. Communications. For purposes of Section 12.2 of the Credit Agreement,
--------------
Assignee's address and telecopy number -- until changed under that section --
are beside its signature below.
10. Amendments, Etc. No amendment, waiver, or discharge to or under this
---------------
agreement is valid unless in writing that is signed by the party against whom it
is sought to be enforced and is otherwise in conformity with the requirements of
the Credit Agreement.
Amended Exhibit F
-----------------
2
11. ENTIRETY. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN ASSIGNOR
--------
AND ASSIGNEE ABOUT ITS SUBJECT MATTER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF ASSIGNOR AND ASSIGNEE.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN ASSIGNOR AND ASSIGNEE.
12. Parties. This agreement binds and benefits Assignor, Assignee, and their
-------
respective successors and assigns as permitted under the documents.
EXECUTED as of the date first stated above.
_________________________, as Assignor _________________________, as Assignee
By _________________________________ By _______________________________
Name: ___________________________ Name _______________________________
Title: __________________________ Title _______________________________
(Address) __________________________
__________________________
__________________________
Attn: ____________________
(Tel. No.)(___)___-____
(Fax No.) (___)___-____
As of the Effective Date, Agent and Borrower consent to this agreement and
the transactions contem plated in it.
U.S. BANK NATIONAL ASSOCIATION, as Agent MATRIX BANCORP, INC., as Borrower
By _________________________________ By _______________________________
Name: ___________________________ Name _________________________
Title: __________________________ Title _________________________
Amended Exhibit F
-----------------
3