THIRD AMENDMENT
TO
PURCHASE AND ASSUMPTION AGREEMENT
This Third Amendment (the "Third Amendment") to the Purchase and Assumption
Agreement (the "Agreement") is entered into as of this 31st day of August, 2003
by and between MATRIX FINANCIAL SERVICES CORPORATION, an Arizona corporation
("Seller"), MATRIX CAPITAL BANK, a federal savings bank ("Parent"), and AMPRO
MORTGAGE CORPORATION, a Delaware corporation ("Purchaser"). The Seller, Parent
and Purchaser together shall be the "Parties". Capitalized terms used herein and
not otherwise defined shall have the meanings given them in the Agreement.
WHEREAS, during the course of the Transition Period certain additional
third party service contracts and equipment leases were (i) discovered by
Seller, (ii) communicated to Purchaser, and (iii) determined by Seller and
Purchaser to be necessary for the continuation of doing business by the Acquired
Division; and
WHEREAS, it was mutually determined that previously identified Contract
Rights and Equipment Leases would not be assigned by Seller to Purchaser, by
virtue of lease buy-out, or contract termination; and
WHEREAS, the Parties have also determined, for reasons of lightening the
immediate work load burden of reproducing documentation of a historical and
archived nature, to grant each other reasonable access to such documentation
from and after the Final Closing Date; and
WHEREAS, the Parties hereto wish to be more specific than the Agreement has
hereto been concerning Aggregate Locked Loan Profitability Amount, Transition
Employees "stay" bonuses, Seller's employee advances, Hired Employees and the
related accrued vacation liabilities of each Party, and how the New Pipeline
Applications are to be handled; and
WHEREAS, the Parties have now determined it is in the best interests of the
Parties to modify the Agreement to accommodate these additions, deletions,
changes in work load, and other areas needing more specification.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties affirm and
agree as follows:
1. Schedule 4.2(f)-2 Equipment Leases is hereby modified to delete Fleet
Capital Leasing and ▇▇▇▇▇▇▇ Capital, Inc., and add Chesterfield
Financial Corp.
2. Schedule 4.2(g) Contract Rights is hereby modified to delete RMIC
Corporation and Broadwing Telecommunications Inc., and add GE Capital
Residential Connections Corporation (including its affiliates GE
Capital Contract Services, Inc. and General Electric Mortgage
Insurance Corporation), Lender E-Source Inc., ▇▇▇▇▇▇.▇▇▇ LLC, MGIC
Investor Services Corporation, and PMI Mortgage Services Co.
3. By the modifications made in paragraphs 1 and 2 above, the definitions
of Contract Rights, Equipment Leases and Assumed Obligations as set
forth in the Agreement are hereby modified accordingly.
4. Section 6.6 of the Agreement is hereby modified to add the following
language:
"From and after the Final Closing Date, each Party will give the other
Party and its attorneys, accountants, consultants and other
representatives reasonable access to the books, records and accounts
with respect to (i) the Production Assets, (ii) any work product or
records held by Purchaser or the Acquired Division relating to loans
closed prior to March 1, 2003, and (iii) any work product or records
held by Seller relating to loans closed after February 28, 2003.
Reasonable access is defined as giving reasonable advance notice,
access during normal business hours, and in a fashion that does not
disrupt the affected Party's business operations. Valid reasons for
requesting reasonable access, by either party, include information
that is required to be produced due to audits (regulatory, internal
and external), arbitration, litigation, loan investor requests, Agency
requests and regulatory requests."
5. The Aggregate Locked Loan Profitability Amount to be paid to Seller by
Purchaser, on the Final Closing Date, under Section 2.3(b) of the
Agreement is $159,626.00.
6. The Transition Employees "stay" bonus to be reimbursed to Seller by
Purchaser, on the Final Closing Date, under Section 6.8(a) is
$6,264.12. ($3,384.12 for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; $2,880.00 for ▇▇▇▇ ▇▇▇▇▇▇▇)
7. The amount to be reimbursed to Seller by Purchaser, on the Final
Closing Date, for payroll advances made by Seller to Hired Employees
prior to the Initial Closing Date is $63,260.99, as set forth on
"EXHIBIT A" attached hereto.
8. Each of the parties hereto acknowledges and agrees that during the
Transition Period the identity of the Hired Employees has changed as a
result of, among other things, ordinary employee turnover in the
Acquired Division, and Seller and Purchaser desire to provide a
definitive list as of the Final Closing Date as to whom shall be
considered Hired Employees for purposes of the Agreement.
Attached hereto as "EXHIBIT B" is a list of employees and former
employees of Matrix Financial Services Corporation, each of whom the
Seller and Purchaser acknowledge and agree is a Hired Employee for
purposes of the Agreement.
9. Each of the parties hereto acknowledges and agrees that each Hired
Employee has an option to have its accrued vacation (a) "rolled-over"
to Purchaser or (b) paid out by Seller. In the event of (a), above,
Seller will pay to Purchaser, as soon after the Final Closing Date as
feasible, 25% of the amount of Hired Employee vacation that had
accrued as of August 31, 2003, for all Hired Employees electing option
(a). In the event of (b), above, the Purchaser will reimburse to
Seller, as soon after the Final Closing Date as feasible, 75% of the
amount of Hired Employee vacation that had accrued as of August 31,
2003, for all Hired Employees electing option (b). Attached hereto as
"EXHIBIT C" is the Accrued Vacation Schedule which estimates the
amounts that Seller will pay to Purchaser and that Purchaser will pay
to Seller. The parties also acknowledge (i) as of the Final Closing
Date "EXHIBIT C" can only be preliminary in nature, representing the
status of the Hired Employees as of the August 15, 2003 payroll, (ii)
"EXHIBIT C" will be presented as a "final" schedule within ten (10)
Business Days after the Final Closing Date, and reviewed and approved
by Seller and Purchaser, and (iii) any adjustments in payments due
between the parties will be paid to the appropriate party at that
time.
10. The parties acknowledge and agree that the New Pipeline Applications
and Loan Files related thereto in certain states or that meet certain
other criteria are not being delivered and conveyed to Purchaser on
the Final Closing date due to the fact that, as of the Final Closing
Date, Purchaser will not be properly licensed in such states. Those
states are: California, Connecticut, District of Columbia, Delaware,
Georgia, Illinois, Massachusetts, Minnesota, Nevada, New Jersey, New
York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota,
Vermont, Virginia, and West Virginia (such pipeline of loans being
collectively referred to herein as the "Excluded Pipeline Loans"). A
list of the Excluded Pipeline Loans is attached hereto as Exhibit D.
Following the Final Closing Date, Seller shall continue to fund in
Seller's name the Excluded Pipeline Loans in the same manner as is
described in the Agreement, without reference to the termination of
the Transition Period. The parties agree that such failure to convey
and deliver the Excluded Pipeline Loans by Seller on the Final Closing
Date shall not be deemed or construed in any respect as a breach of or
default under the Agreement by Seller or Parent, and that Seller and
Parent, by closing the transactions contemplated by the Agreement on
the Final Closing Date despite knowledge of the failure of Purchaser
to obtain various licenses and approvals shall not be deemed to have
waived any of Seller's or Parent's respective rights and remedies
under the Agreement. In addition, and without limiting the generality
of the foregoing or the indemnification rights of Seller under the
Agreement, Purchaser hereby agrees that Purchaser shall (A) purchase
from Seller, at such time (and from time to time) as may reasonably be
requested by Seller, each of the Excluded Pipeline Loans that is
ultimately funded by Seller and not sold and delivered by Seller in
consultation with Purchaser to a third-party Investor at Seller's
fully loaded cost (which shall include, without limitation, interest
payable under the Warehouse Agreement on such loans through the date
of purchase) and (B) indemnify, defend and hold Seller and Parent, and
each of their respective employees, directors, representatives and
Affiliates harmless and in respect of, and shall reimburse each
Indemnified Party for, any and all Loses arising out of, resulting
from or relating to (1) the failure by Purchaser to be properly
licensed as discussed above and/or (2) such processing, closing,
funding, sale or delivery to a third-party Investor of any of the
Excluded Pipeline Loans by Seller or Parent. The foregoing
indemnification shall not be subject to the "indemnification cap"
specified in Section 7.3(c) of the Agreement and shall be subject to
the four (4) year limitations period specified in Section 7.3(b) of
the Agreement. Notwithstanding the foregoing, the foregoing
indemnification in clause (2) above shall not apply and shall have no
force and effect with respect to any particular indemnified event if
the indemnified event results directly from an action or inaction on
the part of Seller taken specifically in contravention of a written
recommendation by Purchaser with regard to such action or inaction.
11. Purchaser hereby acknowledges receipt of and accepts delivery of each
of the Final Closing Date Sales Commitments.
12. Except to the extent expressly provided in this Third Amendment, the
Second Amendment and the First Amendment, all terms of the Agreement
shall remain in full force and effect and unaffected by the terms of
this Third Amendment.
13. This Third Amendment may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Third Amendment to
be executed as of the date first written above.
MATRIX FINANCIAL SERVICES
CORPORATION
By:_________________________
D. ▇▇▇▇ ▇▇▇▇▇▇▇
Chief Executive Officer
MATRIX CAPITAL BANK
By:________________________
D. ▇▇▇▇ ▇▇▇▇▇▇▇
President & CEO
AMPRO MORTGAGE CORPORATION
By:________________________
Name:
Title:
EXHIBIT A
Seller's Payroll Advances to Hired Employees
EXHIBIT B
Hired Employees
EXHIBIT C
Accrued Vacation Schedule
EXHIBIT D
Excluded Pipeline Applications and related Loan Files