CREDIT AGREEMENT
THIS
CREDIT AGREEMENT (this "Agreement") is entered into as of
June
30,
2006, by and between MATRIX BANCORP, INC., a Colorado corporation ("Borrower"),
and XXXXX FARGO
BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
Borrower
has requested that Bank extend or continue credit to Borrower as described
below,
and Bank has agreed to provide such credit to Borrower on the terms and
conditions contained
herein.
NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which
are
hereby
acknowledged, Bank and Borrower hereby agree as follows:
ARTICLE
I
CREDIT
TERMS
SECTION
1.1. LINE
OF
CREDIT.
(a) Line
of
Credit. Subject
to the terms and conditions of
this
Agreement, Bank hereby
agrees to make advances to Borrower from time to time up to and including June
30, 2007,
not
to exceed at any time the aggregate principal amount of Twelve Million Dollars
($12,000,000.00)
("Line of Credit"), the proceeds of which shall be used for Borrower's working
capital
purposes. Borrower's obligation to repay advances under the Line of Credit
shall
be evidenced by a promissory note dated as of June 30, 2006 ("Line of Credit
Note"), all terms of which are incorporated herein by this
reference.
(b) Borrowing
and Repayment. Borrower
may from time to time during the term of the Line of Credit borrow, partially
or
wholly repay its outstanding borrowings, and reborrow, subject
to all of the limitations, terms and conditions contained herein or in the
Line
of Credit Note; provided however, that the total outstanding borrowings under
the Line of Credit shall not at
any
time exceed the maximum principal amount available thereunder, as set forth
above.
SECTION
1.2. TERM COMMITMENT.
(a) Term
Commitment. Subject
to the terms and conditions of this Agreement, Bank hereby
agrees to make advances to Borrower from time to time up to and including June
30, 2007,
not
to exceed the aggregate principal amount of Five Million Dollars ($5,000,000.00)
("Term
Commitment"), the proceeds of which shall be used to refinance existing
indebtedness, and which shall be converted on June 30, 2007, to a term loan,
as
described more fully below. Borrower's
obligation to repay advances under the Term Commitment shall be evidenced by
a
promissory
note dated as of June 30, 2006 ("Term Commitment Note"), all terms of which
are
incorporated herein by this reference.
(b) Borrowing
and Repayment. Borrower
may from time to time up to and including June
30,
2007 borrow and partially or wholly repay its outstanding borrowings, and
reborrow, subject to all the limitations, terms and conditions contained herein;
provided however, that the total
outstanding borrowings under the Term Commitment shall not at any time exceed
the maximum principal amount available thereunder, as set forth above. Effective
July 1, 2007 no further
advance may be made. The principal amount of the Term Commitment shall be repaid
in
accordance with the provisions of the Term Commitment Note.
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(c) Prepayment. Borrower
may prepay principal on the Term Commitment solely in accordance
with the provisions of the Term Commitment Note.
SECTION
1.3. INTEREST/FEES.
(a) Interest. The
outstanding principal balance of each credit subject hereto shall bear
interest at the rate of interest set forth in each promissory note or other
instrument or document
executed in connection therewith.
(b) Computation
and Payment. Interest
shall be computed on the basis of a 360-day year, actual days elapsed. Interest
shall be payable at the times and place set forth in each promissory
note or other instrument or document required hereby.
(c) Unused
Commitment Fee. Borrower
shall pay to Bank a fee equal to one-eighth of
one
percent (0.125%) per annum (computed on the basis of a 360-day year, actual
days
elapsed) on the average daily unused amount of the Line of Credit, which fee
shall be calculated
on a calendar quarter basis by Bank and shall be due and payable by Borrower
in
arrears
on the last day of each March, June, September and December.
SECTION
1.4. COLLATERAL.
As
security for all indebtedness and other obligations of Borrower to Bank subject
hereto, Borrower hereby grants to Bank security interests of first priority
in
all Borrower's 45,000 shares of the common stock of Matrix Capital
Bank.
All
of
the foregoing shall be evidenced by and subject to the terms of such security
agreements, financing statements and other documents as Bank shall reasonably
require, all in form
and
substance satisfactory to Bank. Borrower shall pay to Bank immediately upon
demand
the full amount of all charges, costs and expenses (to include fees paid to
third parties and
all
allocated costs of Bank personnel), expended or incurred by Bank in connection
with any of the foregoing security, including without limitation, filing and
recording fees and costs of appraisals, audits and title insurance.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Borrower
makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement
and
shall continue in
full
force and effect until the full and final payment, and satisfaction and
discharge, of all obligations
of Borrower to Bank subject to this Agreement.
SECTION
2.1. LEGAL
STATUS. Borrower is a corporation, duly organized and existing and
in
good standing under the laws of Colorado and is qualified or licensed to do
business (and
is
in good standing as a foreign corporation, if applicable) in all jurisdictions
in which such qualification
or licensing is required or in which the failure to so qualify or to be so
licensed could have
a
material adverse effect on Borrower.
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SECTION
2.2. AUTHORIZATION
AND VALIDITY. This Agreement and each promissory
note, contract, instrument and other document required hereby or at any time
hereafter
delivered to Bank in connection herewith (collectively, the "Loan Documents")
have been duly authorized, and upon their execution and delivery in accordance
with the provisions hereof will constitute legal, valid and binding agreements
and obligations of Borrower or the party which executes the same, enforceable
in
accordance with their respective terms.
SECTION
2.3. NO
VIOLATION. The execution, delivery and performance by Borrower of
each
of the Loan Documents do not violate any provision of any law or regulation,
or
contravene any provision of the Articles of Incorporation or By-Laws of
Borrower, or result in any breach of or default under any contract, obligation,
indenture or other instrument to which Borrower
is a party or by which Borrower may be bound.
SECTION
2.4. LITIGATION.
There are no pending, or to the best of Borrower's knowledge
threatened, actions, claims, investigations, suits or proceedings by or before
any governmental authority, arbitrator, court or administrative agency which
could have a material adverse effect on the financial condition or operation
of
Borrower other than those disclosed by Borrower
to Bank in writing prior to the date hereof.
SECTION
2.5. CORRECTNESS
OF FINANCIAL STATEMENT. The annual financial statement
of Borrower dated December 31, 2005, and all interim financial statements
delivered to Bank since said date, true copies of which have been delivered
by
Borrower to Bank prior to the
date
hereof, (a) are complete and correct and present fairly the financial condition
of Borrower, (b) disclose all liabilities of Borrower that are required to
be
reflected or reserved against under generally accepted accounting principles,
whether liquidated or unliquidated, fixed or contingent, and (c) unless
otherwise disclosed in writing to Bank or disclosed in Borrower's periodic
public filings, have been prepared in accordance with generally accepted
accounting principles
consistently applied. Since the dates of such financial statements there has
been no material
adverse change in the financial condition of Borrower, nor has Borrower
mortgaged, pledged, granted a security interest in or otherwise encumbered
any
of its assets or properties except in favor of Bank or as otherwise permitted
by
Bank in writing.
SECTION
2.6. INCOME
TAX RETURNS. Borrower has no knowledge of any pending assessments
or adjustments of its income tax payable with respect to any year.
SECTION
2.7. NO
SUBORDINATION. There is no agreement, indenture, contract or instrument
to which Borrower is a party or by which Borrower may be bound that requires
the
subordination
in right of payment of any of Borrower's obligations subject to this Agreement
to any other obligation of Borrower.
SECTION
2.8. PERMITS,
FRANCHISES. Borrower possesses, and will hereafter possess,
all permits, consents, approvals, franchises and licenses required and rights
to
all trademarks,
trade names, patents, and fictitious names, if any, necessary to enable it
to
conduct the
business in which it is now engaged in compliance with applicable
law.
SECTION
2.9. ERISA.
Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
or
recodified from time to time ("ERISA"); Borrower has not violated any provision
of any defined employee pension benefit plan (as defined in ERISA) maintained
or
contributed to by Borrower (each,
a
"Plan"); no Reportable Event as defined in ERISA has occurred and is continuing
with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under
ERISA with respect to each Plan; and each Plan will be able to fulfill its
benefit obligations as
they
come due in accordance with the Plan documents and under generally accepted
accounting
principles.
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SECTION
2.10. OTHER OBLIGATIONS. Borrower is not in default on any obligation for
borrowed
money, any purchase money obligation or any other material lease, commitment,
contract, instrument or obligation.
SECTION
2.11. BANK SUBSIDIARIES. As of the date of this Agreement Borrower owns
100%
of
all issued and outstanding common voting stock in Matrix Capital Bank. Each
bank, if any,
named in this Section, and each bank at any time hereafter established or
acquired by Borrower, is referred to as a "Bank Subsidiary".
ARTICLE
III
CONDITIONS
SECTION
3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Bank
to
extend any credit contemplated by this Agreement is subject to the fulfillment
to Bank's satisfaction
of all of the following conditions:
(a) Approval
of Bank Counsel. All
legal
matters incidental to the extension of credit by Bank shall be satisfactory
to
Bank's counsel.
(b) Documentation. Bank
shall have received, in form and substance satisfactory to Bank,
each of the following, duly executed:
(i) This
Agreement and each promissory note or other instrument or document required
hereby.
(ii) Certificate
of Incumbency.
(iii) Corporate
Borrowing Resolution.
(iv) General
Pledge Agreement.
(v) Stock/Bond
Assignment.
(vi) Such
other documents as Bank may require under any other Section of this
Agreement.
(c) Financial
Condition. There
shall have been no material adverse change, as determined
by Bank, in the financial condition or business of Borrower, nor any material
decline, as determined by Bank, in the market value of any collateral required
hereunder or a substantial or
material portion of the assets of Borrower.
SECTION
3.2. CONDITIONS
OF EACH EXTENSION OF CREDIT. The obligation of Bank
to
make each extension of credit requested by Borrower hereunder shall be subject
to the fulfillment
to Bank's satisfaction of each of the following conditions:
(a) Compliance. The
representations and warranties contained herein and in each of the other Loan
Documents shall be true on and as of the date of the signing of this Agreement
and on the date of each extension of credit by Bank pursuant hereto, with the
same effect as though such representations and warranties had been made on
and
as of each such date, and on each such date, no Event of Default as defined
herein, and no condition, event or act
which
with the giving of notice or the passage of time or both would constitute such
an Event of Default, shall have occurred and be continuing or shall
exist.
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(b) Documentation. Bank
shall have received all additional documents which may be
required in connection with such extension of credit.
ARTICLE
IV
AFFIRMATIVE
COVENANTS
Borrower
covenants that so long as Bank remains committed to extend credit to Borrower
pursuant
hereto, or any liabilities (whether direct or contingent, liquidated or
unliquidated) of Borrower to Bank under any of the Loan Documents remain
outstanding, and until payment in full of all obligations of Borrower subject
hereto, Borrower shall, unless Bank otherwise consents in
writing:
SECTION
4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other
liabilities due under any of the Loan Documents at the times and place and
in
the manner specified
therein.
SECTION
4.2. ACCOUNTING
RECORDS. Maintain adequate books and records in accordance
with generally accepted accounting principles consistently applied unless
otherwise disclosed
in writing to Bank or disclosed in Borrower's periodic public
filings.
SECTION
4.3. FINANCIAL
STATEMENTS. Provide to Bank all of the following, in form and detail
satisfactory to Bank:
(a) not
later
than 120 days after and as of the end of each fiscal year, an unqualified
audit
report of the financial statement of Borrower, prepared by an independent
certified public accountant
acceptable to Bank, to include balance sheet, income statement, statement of
cash flow,
management report, auditor's report, all supporting schedules, footnotes and
a
copy of 10K
report filed with the Securities Exchange Commision;
(b)
not
later
than 60 days after and as of the end of each fiscal quarter, a financial
statement
of Borrower, to include balance sheet, income statement, statement of cash
flow,
management
report, auditor's report, all supporting schedules, footnotes and a copy of
10Q
report
filed with the Securities Exchange Commision;
(c) not
later
than 60 days after and as of the end of each fiscal quarter, a thrift financial
report from Subsidiary Bank;
(d) not
later
than 60 days after the beginning of each fiscal year of the Borrower,
statements
of forecasted consolidated and consolidating income for the Borrower for each
fiscal
quarter in such fiscal year and a forecasted consolidated balance sheet of
the
Borrower, together
with supporting assumptions, as at the end of each fiscal quarter;
(e) contemporaneously
with each quarterly financial statement of Borrower required hereby,
a
compliance certificate of the president or chief financial officer of Borrower
that said financial statements are accurate, that there exists no Event of
Default nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
an Event of Default, and demonstrating compliance with the financial covenants
contained in this Agreement;
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(f) as
soon
as available (but without duplication of any other requirements set forth in
this Section 4.3) a copy of all reports which are required by law to be
furnished to any regulatory authority having jurisdiction over Borrower or
any
Bank Subsidiary (including without limitation Call Reports, but excluding any
report which applicable law or regulation prohibits Borrower or a Bank
Subsidiary from furnishing to Bank);
(g) from
time
to time such other information as Bank may reasonably request.
SECTION
4.4. COMPLIANCE. Preserve and maintain all licenses, permits, governmental
approvals, rights, privileges and franchises necessary for the conduct of its
business;
and comply with the provisions of all documents pursuant to which Borrower
is
organized
and/or which govern Borrower's continued existence and with the requirements
of
all laws, rules, regulations and orders of any governmental authority applicable
to Borrower and/or its business.
SECTION
4.5. INSURANCE.
Maintain and keep in force, for each business in which Borrower
is engaged, insurance of the types and in amounts customarily carried in similar
lines of business, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request schedules setting
forth all insurance then in effect.
SECTION
4.6. FACILITIES.
Keep all properties useful or necessary to Borrower's business
in good repair and condition, and from time to time make necessary repairs,
renewals and
replacements thereto so that such properties shall be fully and efficiently
preserved and maintained.
SECTION
4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any and
all
indebtedness, obligations, assessments and taxes, both real or personal,
including without
limitation federal and state income taxes and state and local property taxes
and
assessments,
except such (a) as Borrower may in good faith contest or as to which a bona
fide
dispute
may arise, and (b) for which Borrower has made provision, to Bank's
satisfaction, for eventual
payment thereof in the event Borrower is obligated to make such
payment.
SECTION
4.8. LITIGATION. Promptly give notice in writing to Bank of any litigation
pending or threatened against Borrower with a claim in excess of
$3,000,000.00.
SECTION
4.9. BANK
SUBSIDIARY FINANCIAL CONDITION. Cause each Bank Subsidiary
to maintain its financial condition as follows using generally accepted
accounting principles consistently applied and used consistently with prior
practices (except to the extent modified by the definitions herein), with
compliance determined commencing with such Bank Subsidiary's
financial statements for the period ending December 31, 2006 with respect to
subsection
4.9(a) below and for the period ending September 30, 2006 for subsections 4.9(b)
and
(c)
below:
(a)
ROA
not
less than 0.60% on a rolling four quarter basis, determined as of each
fiscal
quarter end, with "ROA" defined as the percentage arrived at by dividing net
income by Total
Assets, as reported in the most recent Call Report.
(b) Non-Performing
Assets not greater than 20.0% of Primary Equity Capital, determined
as of each fiscal quarter end, with "Non-Performing Assets" defined as the
sum
of: (i)
all
loans classified as past due 90 days or more and still accruing interest; (ii)
all loans classified as 'non-accrual' and no longer accruing interest; and
(iii)
all other 'non-performing assets',
including those classified as 'other real estate owned' and 'repossessed
property', less amounts
that are U.S. Government-Guaranteed or -Insured, as reported in the then most
recent Call Report, and with "Primary Equity Capital" defined as the aggregate
of allowance for loan and
lease
losses, as reported in the then most recent Call Report, plus Equity Capital
(defined as
the
aggregate of perpetual preferred stock (and related surplus), common stock,
surplus (excluding
all surplus related to perpetual preferred stock), undivided profits and capital
reserves,
plus the net unrealized holding gains (or less the net realized holding losses)
on available-for-sale securities, less goodwill and other disallowed intangible
assets).
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(c) Maintain
its categorization as Well Capitalized as defined by regulatory agencies having
jurisdiction, which, pursuant to Section 38 of the Federal Deposit Insurance
Act
(created by Section 131 of the Federal Deposit Insurance Corporation Improvement
Act (FDICIA) of 1991) (entitled "Prompt Corrective Action") (herein, "Section
38"),
considers
an institution "Well Capitalized", among other things, if its Total Risk-Based
Capital Ratio equals or exceeds 10%, its
Tier
1 Risk-Based Capital equals or exceeds 6% and its Leverage equals or exceeds
5%.
As used
herein, "Total Risk-Based Capital Ratio", "Tier 1 Risk-Based Capital" and
"Leverage" shall be
defined and calculated in conformity with Section 38.
SECTION
4.10. NOTICE TO BANK. Promptly (but in no event more than five (5) days
after
the
occurrence of each such event or matter) give written notice to Bank in
reasonable detail of: (a) the occurrence of any Event of Default, or any
condition, event or act which with the giving of notice or the passage of time
or both would constitute an Event of Default; (b) any change
in
the name or the organizational structure of Borrower other than the planned
name
change
of
Borrower to United Western Bancorp, Inc. which is tentatively scheduled to
occur
in the
third
or fourth quarter of 2006; provided, however, that not later than thirty days
after the effective date of such name change, Borrower shall give notice to
Bank
that the name change has
occurred, which notice shall be used by Bank to initiate the necessary changes
to Bank's records
;
(c)
the
occurrence and nature of any Reportable Event or Prohibited Transaction,
each
as
defined in ERISA, or any funding deficiency with respect to any Plan; (d) any
termination
or cancellation of any insurance policy which Borrower is required to maintain,
or any
uninsured or partially uninsured loss through liability or property damage,
or
through fire, theft
or
any other cause affecting Borrower's property in excess of an aggregate of
$3,000,000.00; (e) any change in Executive Management of Borrower or of any
Bank
Subsidiary,
with "Executive Management" defined as the Chairman of the Board, President
or
Chief
Financial Officer; or (f) any negotiations to sell any capital stock of Borrower
and/or any Bank Subsidiary, together with copies of any proposed buy/sell
agreements; provided however, that
this
clause shall not be deemed approval by Bank of any such negotiation and shall
not apply
to
information which under applicable law or regulation is prohibited from
disclosure to Bank.
ARTICLE
V
NEGATIVE
COVENANTS
Borrower
further covenants that so long as Bank remains committed to extend credit to
Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated
or
unliquidated)
of Borrower to Bank under any of the Loan Documents remain outstanding, and
until
payment in full of all obligations of Borrower subject hereto, Borrower will
not
without Bank's
prior written consent:
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SECTION
5.1. USE
OF
FUNDS. Use any of the proceeds of any credit extended hereunder
except for the purposes stated in Article I hereof.
SECTION
5.2. OTHER
INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness
or liabilities in excess of one million dollars ($1,000,000) in the aggregate,
in any fiscal year resulting from borrowings, loans or advances, whether secured
or unsecured, matured or unmatured, liquidated or unliquidated, joint or
several, except (a) the liabilities of Borrower
to Bank, and (b) any other liabilities of Borrower existing as of, and disclosed
to Bank prior to, the date hereof. Bank agrees that the liabilities and
indebtedness that are listed in Borrower's
2005 Annual Report and other public filings—all of
which have
been furnished to the Bank
on
or prior to the date hereof —are therefore
considered to be disclosed to Bank pursuant to
this
section.
SECTION
5.3. MERGER,
CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate
with any other entity; make any substantial change in the nature of Borrower's
business as conducted as of the date hereof; acquire all or substantially all
of
the assets of any other entity; nor sell, lease, transfer or otherwise dispose
of all or a substantial or material portion of Borrower's assets except in
the
ordinary course of its business.
SECTION
5.4. LOANS,
ADVANCES, INVESTMENTS. Make any loans or advances to or
investments in any person or entity in an amount greater than $1,000,000 in
the
aggregate, in any
fiscal year, except any of the foregoing existing as of, and disclosedto
Bank
prior to, the date
hereof.
SECTION
5.5. DIVIDENDS,
DISTRIBUTIONS. Declare or pay any dividend or distribution
either in cash, stock or any other property on Borrower's stock now or hereafter
outstanding, nor redeem, retire, repurchase or otherwise acquire any shares
of
any class of Borrower's
stock now or hereafter outstanding; provided however, that so long as no Event
of Default
has occurred and is continuing, Borrower may pay cash dividends or distributions
to its shareholders
in any fiscal year not to exceed 33% of Borrower's net income for the prior
fiscal year.
SECTION
5.6. PLEDGE
OF
ASSETS. Mortgage, pledge, grant or permit to exist a security
interest in, or lien upon, all or any portion of Borrower's assets now owned
or
hereafter acquired,
except in the ordinary course of Borrower's business, and except any of the
foregoing in favor of Bank or which is existing as of, and disclosed to Bank
in
writing prior to, the date hereof.
ARTICLE
VI
EVENTS
OF DEFAULT
SECTION
6.1. The occurrence of any of the following shall constitute an "Event of
Default" under this Agreement:
(a) Borrower
shall fail to pay when due any principal, interest, fees or other amounts
payable
under any of the Loan Documents.
(b) Any
financial statement or certificate furnished to Bank in connection with, or
any
representation or warranty made by Borrower or any other party under this
Agreement or any other
Loan Document shall prove to be incorrect, false or misleading in any material
respect when
furnished or made.
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(c)
Any
default in the performance of or compliance with any obligation, agreement
or
other provision contained herein or in any other Loan Document (other than
those
referred to in subsections (a) and (b) above), and with respect to any such
default which by its nature can be cured, such default shall continue for a
period of twenty (20) days from its occurrence.
(d)
Any
material default in the payment or performance of any material obligation,
or
any defined event of default, under the terms of any material contract or
instrument (other than any of the Loan Documents) pursuant to which Borrower,
or
any Bank Subsidiary has incurred any debt or other liability to any person
or
entity, including Bank.
(e) The
filing of a notice of judgment lien against Borrower or any Bank Subsidiary;
or
the recording of any abstract of judgment against Borrower or any Bank
Subsidiary in any county
in
which Borrower or such Bank Subsidiary has an interest in real property; or
the
service
of a notice of levy and/or of a writ of attachment or execution, or other like
process, against the assets of Borrower or any Bank Subsidiary; or the entry
of
a judgment against Borrower or any Bank Subsidiary.
(f) Borrower
or any Bank Subsidiary shall become insolvent, or shall suffer or consent to
or
apply for the appointment of a receiver, trustee, custodian or liquidator of
itself or any
of
its property, or shall generally fail to pay its debts as they become due,
or
shall make a general
assignment for the benefit of creditors; Borrower or any Bank Subsidiary shall
file a voluntary
petition in bankruptcy, or seeking reorganization, in order to effect a plan
or
other arrangement
with creditors or any other relief under the Bankruptcy Reform Act, Title 11
of
the United
States Code, as amended or recodified from time to time ("Bankruptcy Code"),
or
under any
state
or federal law granting relief to debtors, whether now or hereafter in effect;
or any involuntary petition or proceeding pursuant to the Bankruptcy Code or
any
other applicable state or
federal law relating to bankruptcy, reorganization or other relief for debtors
is filed or commenced
against Borrower or any Bank Subsidiary, or Borrower or any Bank Subsidiary
shall file
an
answer admitting the jurisdiction of the court and the material allegations
of
any involuntary petition; or Borrower or any Bank Subsidiary shall be
adjudicated bankrupt, or an order for relief shall be entered against Borrower
or any Bank Subsidiary by any court of competent jurisdiction under the
Bankruptcy Code or any other applicable state or federal law relating
to bankruptcy, reorganization or other relief for debtors.
(g) There
shall exist or occur any event or condition which Bank in good faith
believes
impairs, or is substantially likely to impair, the prospect of payment or
performance by Borrower
of its obligations under any of the Loan Documents.
(h) The
dissolution or liquidation of Borrower, or any Bank Subsidiary which is a
corporation, partnership, joint venture or other type of entity; or Borrower,
or
any Bank Subsidiary, or any of its directors, stockholders or members, shall
take action seeking to effect the dissolution or liquidation of Borrower or
such
Bank Subsidiary.
(i) The
issuance against Borrower, or any Bank Subsidiary of Borrower of any formal
administrative action, temporary or permanent, by any federal or state
regulatory agency having jurisdiction or control over Borrower or such Bank
Subsidiary, such action taking the form of, but not limited to: (i) any formal
directive citing conditions or activities deemed to be unsafe or unsound or
breaches of fiduciary duty or law or regulation; (ii) a memorandum of
understanding; (iii) a cease and desist order; (iv) the termination of insurance
coverage of customer
deposits by the Federal Deposit Insurance Corporation; (v) the suspension or
removal of
an
executive officer or director of Borrower, or the prohibition of participation
by any others in the
business affairs of Borrower or such Bank Subsidiary; (vi) any capital
maintenance agreement; or (vii) any other regulatory action, agreement or
understanding with respect to Borrower or such Bank
Subsidiary.
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SECTION
6.2. REMEDIES.
Upon the occurrence of any Event of Default: (a) all indebtedness
of Borrower under each of the Loan Documents, any term thereof to the contrary
notwithstanding, shall at Bank's option and without notice become immediately
due and payable without presentment, demand, protest or notice of dishonor,
all
of which are hereby expressly waived by Borrower; (b) the obligation, if
any, of
Bank to extend any further credit under any of the
Loan
Documents shall immediately cease and terminate; and (c) Bank shall have
all
rights, powers
and remedies available under each of the Loan Documents, or accorded by law,
including without limitation the right to resort to any or all security for
any
credit subject hereto and to exercise any or all of the rights of a beneficiary
or secured party pursuant to applicable law.
All
rights, powers and remedies of Bank may be exercised at any time by Bank
and
from time
to
time after the occurrence of an Event of Default, are cumulative and not
exclusive, and shall be in addition to any other rights, powers or remedies
provided by law or equity.
ARTICLE
VII
MISCELLANEOUS
SECTION
7.1. NO
WAIVER. No delay, failure or discontinuance of Bank in exercising any
right, power or remedy under any of the Loan Documents shall affect or operate
as a waiver of
such
right, power or remedy; nor shall any single or partial exercise of any such
right, power or remedy preclude, waive or otherwise affect any other or further
exercise thereof or the exercise
of any other right, power or remedy. Any waiver, permit, consent or approval
of
any kind by Bank of any breach of or default under any of the Loan Documents
must be in writing and
shall
be effective only to the extent set forth in such writing.
SECTION
7.2. NOTICES.
All notices, requests and demands which any party is required
or may desire to give to any other party under any provision of this Agreement
must be in writing delivered to each party at the following
address:
BORROWER:
|
Matrix
Bancorp, Inc.
000
00xx Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention:
Chief Financial Officer
|
||
With
a copy to:
|
Matrix
Bancorp, Inc.
000
00xx
Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attention:
General
Counsel
|
||
BANK:
|
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Correspondent
Banking Colorado
0000
Xxxxxxxx
Xxxxxx, XX
00000
|
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or
to
such other address as any party may designate by written notice to all other
parties. Each such notice, request and demand shall be deemed given or made
as
follows: (a) if sent by hand delivery,
upon delivery; (b) if sent by mail, upon the earlier of the date of receipt
or
three (3) days after deposit in the U.S. mail, first class and postage prepaid;
and (c) if sent by telecopy, upon
receipt.
SECTION
7.3. COSTS,
EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended
or
incurred by Bank in connection with (a)
the
negotiation and preparation of this Agreement and the other Loan Documents,
Bank's continued
administration hereof and thereof, and the preparation of any amendments and
waivers hereto and thereto, (b) the enforcement of Bank's rights and/or the
collection of any amounts
which become due to Bank under any of the Loan Documents, and (c) the
prosecution or
defense of any action in any way related to any of the Loan Documents, including
without limitation, any action for declaratory relief, whether incurred at
the
trial or appellate level, in an arbitration proceeding or otherwise, and
including any of the foregoing incurred in connection with any bankruptcy
proceeding (including without limitation, any adversary proceeding, contested
matter or motion brought by Bank or any other person) relating to Borrower
or
any other person or entity.
SECTION
7.4. SUCCESSORS,
ASSIGNMENT. This Agreement shall be binding upon and
inure
to the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Borrower may
not
assign or transfer its interests
or rights hereunder without Bank's prior written consent. Bank reserves the
right to sell,
assign, transfer, negotiate or grant participations in all or any part of,
or
any interest in, Bank's
rights and benefits under each of
the
Loan
Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating
to any credit subject hereto, Borrower, any Bank Subsidiary or any collateral
required hereunder.
SECTION
7.5. ENTIRE
AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents constitute the entire agreement between Borrower and Bank with respect
to each
credit subject hereto and supersede all prior negotiations, communications,
discussions and correspondence concerning the subject matter hereof. This
Agreement may be amended or modified only in writing signed by each party
hereto.
SECTION
7.6. NO
THIRD
PARTY BENEFICIARIES. This Agreement is made and entered
into for the sole protection and benefit of
the
parties hereto and their respective permitted
successors and assigns, and no other person or entity shall be a third party
beneficiary of, or have any direct or indirect cause of
action
or
claim in connection with, this Agreement
or any other of the Loan Documents to which it is not a party.
SECTION
7.7. TIME.
Time is of the essence of each and every provision of this Agreement
and each other of the Loan Documents.
SECTION
7.8. SEVERABILITY
OF PROVISIONS. If any provision of this Agreement shall
be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of
this
Agreement.
-11-
SECTION
7.9. COUNTERPARTS.
This Agreement may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed to be an original,
and
all of which when taken together shall constitute one and the same
Agreement.
SECTION
7.10. GOVERNING
LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado.
SECTION
7.11. ARBITRATION.
(a) Arbitration. The
parties hereto agree, upon demand by any party, to submit to binding
arbitration all claims, disputes and controversies between or among them (and
their respective
employees, officers, directors, attorneys, and other agents), whether in tort,
contract or otherwise in any way arising out of or relating to (i) any credit
subject hereto, or any of the Loan Documents, and their negotiation, execution,
collateralization, administration, repayment, modification, extension,
substitution, formation, inducement, enforcement, default or termination; or
(ii) requests for additional credit.
(b) Governing
Rules. Any
arbitration proceeding will (i) proceed in a location in Colorado selected
by
the American Arbitration Association ("AAA");
(ii)
be
governed by the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any
conflicting choice
of
law provision in any of the documents between the parties; and (iii) be
conducted by the AAA, or such other administrator as the parties shall mutually
agree upon, in accordance with
the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least
$1,000,000.00 exclusive of claimed interest, arbitration fees and costs in
which
case the arbitration
shall be conducted in accordance with the AAA's optional procedures for large,
complex
commercial disputes (the commercial dispute resolution procedures or the
optional procedures
for large, complex commercial disputes to be referred to herein, as applicable,
as the
"Rules"). If there is any inconsistency between the terms hereof and the Rules,
the terms and procedures set forth herein shall control. Any party who fails
or
refuses to submit to arbitration
following a demand by any other party shall bear all costs and expenses incurred
by such
other party in compelling arbitration of any dispute. Nothing contained herein
shall be deemed to be a waiver by any party that is a bank of the protections
afforded to it under 12 U.S.C.
§91 or any similar applicable state law.
(c) No
Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after
the
pendency of any arbitration proceeding. This exclusion does not constitute
a
waiver of the right or
obligation of any party to submit any dispute to arbitration or reference
hereunder, including those
arising from the exercise of the actions detailed in sections (i),
(ii)
and
(iii) of this paragraph.
(d) Arbitrator
Qualifications and Powers. Any
arbitration proceeding in which the amount in controversy is $5,000,000.00
or
less will be decided by a single arbitrator selected according
to the Rules, and who shall not render an award of greater than $5,000,000.00.
Any dispute
in which the amount in controversy exceeds $5,000,000.00 shall be decided by
majority vote of a panel of three arbitrators; provided however, that all three
arbitrators must actively participate
in all hearings and deliberations. The arbitrator will be a neutral attorney
licensed in the
State
of Colorado or a neutral retired judge of the state or federal judiciary of
{State Name}, in
either
case with a minimum of ten years experience in the substantive law applicable
to
the subject
matter of the dispute to be arbitrated. The arbitrator will determine whether
or
not an issue is arbitratable and will give effect to the statutes of limitation
in determining any claim. In any
arbitration proceeding the arbitrator will decide (by documents only or with
a
hearing at the arbitrator's discretion) any pre-hearing motions which are
similar to motions to dismiss for failure to
state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Colorado and may grant any
remedy or relief that a court of
such
state could order or grant within the scope hereof and such ancillary relief
as
is necessary
to make effective any award. The arbitrator shall also have the power to award
recovery of all costs and fees, to impose sanctions and to take such other
action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil
Procedure, the Colorado Rules of Civil Procedure or other applicable law.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction. The institution
and maintenance of an action for judicial relief or pursuit of a provisional
or
ancillary remedy shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the controversy or claim to arbitration
if
any other party contests such action for judicial relief.
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(e) Discovery. In
any
arbitration proceeding, discovery will be permitted in accordance
with the Rules. All discovery shall be expressly limited to matters directly
relevant to the dispute being arbitrated and must be completed no later than
20
days before the hearing date. Any requests for an extension of the discovery
periods, or any discovery disputes, will be subject
to final determination by the arbitrator upon a showing that the request for
discovery is essential for the party's presentation and that no alternative
means for obtaining information is available.
(f) Class
Proceedings and Consolidations. No
party
hereto shall be entitled to join or
consolidate disputes by or against others in any arbitration, except parties
who
have executed any Loan Document, or to include in any arbitration any dispute
as
a representative or member of a class, or to act in any arbitration in the
interest of the general public or in a private attorney general
capacity.
(g) Payment
Of Arbitration Costs And Fees. The
arbitrator shall award all costs and expenses of the arbitration
proceeding.
(h) Miscellaneous. To
the
maximum extent practicable, the AAA, the arbitrators and the parties shall
take
all action required to conclude any arbitration proceeding within 180 days
of
the
filing of the dispute with the AAA. No arbitrator or other party to an
arbitration proceeding may
disclose the existence, content or results thereof, except for disclosures
of
information by a party
required in the ordinary course of its business or by applicable law or
regulation. If more than
one
agreement for arbitration by or between the parties potentially applies to
a
dispute, the arbitration
provision most directly related to the Loan Documents or the subject matter
of
the dispute shall control. This arbitration provision shall survive termination,
amendment or expiration of any of the Loan Documents or any relationship between
the parties.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the
day and year first written above.
MATRIX BANCORP, INC. |
XXXXX
FARGO BANK,
NATIONAL
ASSOCIATION
|
|
|
|
|
By: | By: | /s/ Xxxx X. Xxxxxx |
Title: Chief
Accounting Officer
|
Xxxx X. Xxxxxx Vice President
|
|
|
|
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