SECOND AMENDMENT
Exhibit 10.3
THIS SECOND AMENDMENT, dated as of November 19, 2007 (this “Amendment”), amends the
Five-Year Credit and Guarantee Agreement dated as of August 10, 2005 (as amended, the “Credit
Agreement”), among Block Financial Corporation (the “Borrower”), H&R Block, Inc. (the
“Guarantor”), the lenders party thereto (the “Lenders”) and JPMorgan Chase Bank,
N.A., as administrative agent for the Lenders (in such capacity, the “Administrative
Agent”). Capitalized terms used but not defined herein have the respective meanings set forth
in the Credit Agreement.
WHEREAS, the Borrower, the Guarantor, the Lenders and the Administrative Agent are parties to
the Credit Agreement; and
WHEREAS, the Borrower and the Guarantor have requested that the Lenders agree to amend certain
provisions of the Credit Agreement as hereinafter set forth, and the Required Lenders are willing
to agree to such requested amendments as set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Amendments. The Credit Agreement is hereby amended as follows:
1.1 Amendments to Section 1.1.
(a) Section 1.1 of the Credit Agreement is hereby amended by adding the following
definitions in proper alphabetical sequence:
“Bridge Credit Agreement” means the Bridge and Guarantee
Agreement, dated as of April 16, 2007, among the Guarantor, the Borrower, the
lenders party thereto and HSBC Bank USA, National Association, as
administrative agent.
“Bridge Credit Agreement Amendment Date” means the date on which the
Maturity Date (as defined under the Bridge Credit Agreement) is extended to a date no
earlier than March 14, 2008 and the Administrative Agent shall have received notice
thereof.
“Bridge Credit Agreement Refinancing Date” means the date on which the
Bridge Credit Agreement is refinanced and the Administrative Agent shall have
received notice thereof; provided that any such refinancing shall be
unsecured, have the same borrower as under the Bridge Credit Agreement, have no
guarantors other than Persons that have guaranteed the Obligations and have covenants
no more restrictive than in this Agreement.
“Modified Bridge Credit Agreement Date” means the earlier of the Bridge
Credit Agreement Amendment Date and the Bridge Credit Agreement Refinancing Date.
“OOMC” means Option One Mortgage Corporation, a wholly owned
subsidiary of the Borrower.
“OOMC Disposition” means the sale of all of the outstanding shares of
capital stock of OOMC (excluding the sale of OOMC’s wholly-owned subsidiary, H&R
Block Mortgage Corporation).
“OOMC Disposition Date” means the date on which the OOMC
Disposition is completed.
“Second Amendment Effective Date” means November 19, 2007.
(b) The definition of “Applicable Rate” in Section 1.1 of the Credit Agreement is hereby
amended by inserting in clause (c) of said definition the following proviso immediately after
the
phrase “then the Ratings in category VI above shall be applicable for such day”:
“; provided further, that the Applicable Rate for Utilization Fees shall be
increased to (i) 0.40% on the Second Amendment Effective Date and (ii) 0.90% on
December 31, 2007 if the OOMC Disposition Date has not occurred prior to such date;
provided that, (x) the Applicable Rate for Utilization Fees shall be reduced
to 0.40% on the earlier of the Modified Bridge Credit Agreement Date and the OOMC
Disposition Date if the Applicable Rate for Utilization Fees is increased pursuant
to clause (ii) above and (y) the Applicable Rate for Utilization Fees shall be
reduced to the Applicable Rate under the relevant column heading above on the later
of the Modified Bridge Credit Agreement Date and the OOMC Disposition Date.”
(c) The definition of “Short-Term Debt” in Section 1.1 of the Credit Agreement is
hereby amended by inserting the phrase “plus the aggregate amount of Indebtedness at such
time under this Agreement and the Other Credit Agreement” immediately after the phrase “in accordance with GAAP” contained in said definition.
1.2 Amendment to Section 2.9. Section 2.9 is hereby amended by inserting a new
clause “(c)” at the end thereof to read as follows:
“(c) If on or before January 31, 2008 the OOMC Disposition Date has not
occurred, (i) the Borrower shall prepay the Loans on March 14, 2008 to the extent
(if any) necessary to reduce the aggregate Revolving Credit Exposures of all Lenders
to $875,000,000 and (ii) the total Revolving Credit Exposures of all Lenders shall
not exceed $875,000,000 until the Credit Parties have complied with Section 5.9 for
the calendar year 2008.”
1.3 Amendment to Section 5.9. Section 5.9 is hereby amended in its entirety to read
as follows:
“5.9. Cleandown. The Credit Parties shall reduce the aggregate outstanding
principal amount of all Short-Term Debt to $200,000,000 or less for a minimum period
of thirty consecutive days during the period from March 1 to June 30 of each fiscal
year (other than for the period from March 1, 2008 to June 30, 2008 if the OOMC
Disposition has not been consummated on or prior to April 30, 2008, in which case
the Credit Parties shall reduce the aggregate outstanding principal
-2-
amount of all Short-Term Debt to $700,000,000 or less for a minimum period of thirty
consecutive days during the period from March 1 to May 31, 2008).”
1.4 Amendment to Section 6.1. Section 6.1 is hereby amended in its entirety to read
as follows:
“6.1. Adjusted Net Worth. The Guarantor will not permit Adjusted Net Worth
as at the last day of any fiscal quarter of the Guarantor to be less than (a) for
the fiscal quarters ending October 31, 2007 and January 31, 2008, $800,000,000 and
(b) for each other fiscal quarter, $1,000,000,000”.
SECTION 2 Representations and Warranties. Each of the Borrower and the Guarantor
represents and warrants to the Administrative Agent and the Lenders that, after giving effect to
this Amendment, (a) each representation and warranty set forth in Article III of the Credit
Agreement (other than the representations and warranties set forth in subsections 3.4(b), 3.6(a)(i)
and 3.6(b)) is true and correct in all material respects as of the date hereof with the same effect
as if made on the date hereof (except to the extent related to a specific earlier date) and (b) no
Default or Event of Default shall have occurred and be continuing.
SECTION 3 Effectiveness. This Amendment shall become effective on the date on which
all of the following conditions precedent have been satisfied or waived:
(a) The Administrative Agent (or its counsel) shall have received counterparts of this
Amendment executed by the Borrower, the Guarantor and the Required Lenders.
(b) The Administrative Agent shall have received for the account of each Lender that executes
and delivers a counterpart of this Amendment on or before 5:00 P.M. on November 19, 2007 an
amendment fee equal to 0.05% of the outstanding principal amount of such Lender’s Loans.
(c) The Borrower shall have paid and reimbursed the Administrative Agent for all of its
reasonable out-of-pocket expenses incurred to date in connection with this Amendment and the
other Loan Documents, including, without limitation, the reasonable fees and disbursements of
legal counsel to the Administrative Agent.
SECTION 4 Miscellaneous.
4.1 Continuing Effectiveness, etc. Except as expressly amended hereby, the
provisions of the Credit Agreement are and shall remain in full force and effect. After the
effectiveness of this Amendment, all references in the Credit Agreement and the other Loan
Documents to “Credit Agreement” or similar terms shall refer to the Credit Agreement as
amended hereby.
4.2 Counterparts. This Amendment may be executed in any number of counterparts and by
the different parties on separate counterparts, and each such counterpart shall be deemed to be an
original but all such counterparts shall together constitute one and the same Amendment. Delivery
of a counterpart hereof, or an executed signature hereto, by facsimile or by e-mail (in pdf or
similar format) shall be effective as delivery of a manually-executed counterpart hereof.
-3-
4.3 Governing Law. This Amendment shall be construed in accordance with and governed
by the law of the State of New York.
-4-
Delivered as of the day and year first above written.
| BLOCK FINANCIAL CORPORATION |
||||
| By: | /s/ Xxxxx X . Xxxxxxx | |||
| Name: | Xxxxx X . Xxxxxxx | |||
| Title: | Senior Vice President & Treasurer | |||
| H&R BLOCK, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President and Treasurer | |||
| JPMORGAN CHASE BANK, N.A., as Administrative Agent, as a Lender and as Swingline Lender |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Managing Director | |||
| BANK OF AMERICA, N.A. |
||||
| By: | /s/ Alexa X. Xxxxxxxx | |||
| Name: | Alexa X. Xxxxxxxx | |||
| Title: | Senior Vice President | |||
| HSBC BANK USA, NATIONAL ASSOCIATION |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | XXXXXXX XXXXX | |||
| Title: | SENIOR VICE PRESIDENT | |||
| BNP PARIBAS |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Managing Director | |||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Vice President | |||
| CALYON NEW YORK BRANCH |
||||
| By: | /s/ Xxxxxxxxx Xxxxx | |||
| Name: | Xxxxxxxxx Xxxxx | |||
| Title: | Managing Director | |||
| By: | /s/ Xxxxxx Xxx Xxxxxxx | |||
| Name: | Xxxxxx Xxx Xxxxxxx | |||
| Title: | Managing Director | |||
| MELLON BANK, N.A. |
||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxxx | |||
| Title: | Vice President | |||
| U.S. BANK NATIONAL ASSOCIATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
| COMMERZBANK AG, NEW YORK & GRAND CAYMAN BRANCHES |
||||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxxx | |||
| Title: | Senior Vice President | |||
| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxxx | |||
| Title: | Vice President | |||
H&R Block, Second Amendment, November 19, 2007
| FORTIS BANK SA NV CAYMAN ISLANDS BRANCH |
||||
| By: | /s/ Xxxxxxx Xxxxxxx-Xxxxx | |||
| Name: | Xxxxxxx Xxxxxxx-Xxxxx | |||
| Title: | Director | |||
| /s/ XXXX XXXXXXX | ||||
| XXXX XXXXXXX | ||||
| DIRECTOR | ||||
| COMERICA BANK |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
| XXXXXX BROTHERS BANK, FSB |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Authorized Signatory | |||
| ROYAL BANK OF CANADA |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Attorney-in-Fact | |||
| SUNTRUST BANK |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Director | |||
| FIFTH THIRD BANK |
||||
| By: | /s/ Xxxxxxxxxxx Xxxxxx | |||
| Name: | Xxxxxxxxxxx Xxxxxx | |||
| Title: | VICE PRESIDENT | |||
| UBS LOAN FINANCE LLC |
||||
| By: | /s/ Xxxx X. Xxxx | |||
| Name: | Xxxx X. Xxxx | |||
| Title: | Associate Director | |||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Director | |||
| BANK MIDWEST, N.A. |
||||
| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | Vice President | |||
| COMMERCE BANK, N.A. |
||||
| By: | /s/ R. Xxxxx Xxxxx, Xx. | |||
| Name: | R. Xxxxx Xxxxx, Xx. | |||
| Title: | Vice President | |||
| PNC BANK, NATIONAL ASSOCIATION |
||||
| By: | /s/ Xxxx X. Xxx Xxxx | |||
| Name: | Xxxx X. Xxx Xxxx | |||
| Title: | Credit Manager | |||
| UMB BANK, N.A. |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Senior Vice President | |||
