FIRST AMENDMENT TO
CREDIT AGREEMENT
FIRST AMENDMENT, dated as of April 10, 1997 (this "First
Amendment"), to Credit Agreement, dated as of December 10, 1996, among BLOCK
FINANCIAL CORPORATION, a Delaware corporation (the "Borrower"), the lenders
parties thereto from time to time (individually, a "Lender," and collectively,
the "Lenders") and MELLON BANK, N. A., a national banking association, as agent
for the Lenders (in such capacity, the "Agent") (the "Agreement");
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent desire to
make certain amendments to the Agreement, including establishment of a
commitment of Mellon Bank, N. A. to make swing line advances to the Borrower and
a commitment of each Lender to purchase participations in such advances under
certain circumstances;
NOW, THEREFORE, for and in consideration of the premises and
intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
Amendments
Section 1.01. Article 1.01 of the Agreement is hereby amended
by adding thereto, in appropriate alphabetical sequence, the following
definitions:
"Cost of Funds Rate" for any day shall mean
the arithmetic average of the per annum rates at which
Dollar deposits in an amount approximately equal to a Swing
Line Advance requested by the Borrower are offered to the
Swing Line Lender on such day by prime banks in the New York
interbank market, as determined by the Swing Line Lender in
good faith in accordance with its usual procedures (which
determination shall be conclusive).
"Revolving Credit Loan" shall mean any of
the loans made by a Lender to the Borrower pursuant to
Section 2.01 hereof and "Revolving Credit Loans" shall
mean all of the loans made by the Lenders to the Borrower
pursuant to Section 2.01 hereof.
"Swing Line Advance" shall have the meaning
set forth in Section 2.14 hereof.
"Swing Line Advance Commitment" shall have
the meaning set forth in Section 2.14 hereof.
"Swing Line Advance Maturity Date" shall
have the meaning set forth in Section 2.14 hereof.
"Swing Line Advance Note" shall have the
meaning set forth in Section 2.14(c) hereof.
"Swing Line Advance Participating Interest"
shall have the meaning set forth in Section 2.14(f) hereof.
"Swing Line Lender" shall mean Mellon Bank,
N. A.
"Swing Line Outstandings" at any time shall
mean (i) in the case of the Swing Line Lender, the aggregate
net outstanding amount of its Swing Line Advances for which
it has not received payment from other Lenders on account of
Swing Line Advance Participating Interests and (ii) in the
case of each other Lender, the aggregate outstanding
principal amount which it has paid on account of Swing Line
Advance Participating Interests.
Section 1.02. The definition of the term "Loans" in Section
1.01 of the Agreement is hereby amended to read as follows:
"Loans" shall mean all Revolving Credit Loans and
Swing Line Advances made to the Borrower under this Agreement and
"Loan" shall mean any Revolving Credit Loan or Swing Line
Advance.
Section 1.03. The definition of the term "Lender" in Section
1.01 of the Agreement is hereby amended by adding thereto, as a second sentence,
the following:
The term "Lender" shall include Mellon Bank, N. A.,
in its capacity as Swing Line Lender.
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Section 1.04. The definition of the terms "Note" and "Notes"
in Section 1.01 of the Agreement is hereby amended by inserting, immediately
preceding the period at the end thereof, the following: "and the Swing Line
Note, together with all extensions, renewals, refinancings or refundings thereof
in whole or in part".
Section 1.05. The definition of the term "Required Lenders" in
Section 1.01 of the Agreement is hereby amended to read in its entirety as
follows:
"Required Lenders" shall mean, as of any
date, Lenders which have Committed Amounts constituting, in
the aggregate, at least 66 2/3% of the total Committed
Amounts of the Lenders on such date or, if the Commitments
shall have terminated, Lenders whose Revolving Credit Loans
and Swing Line Outstandings constitute, in the aggregate, at
least 66 2/3% of the total aggregate outstanding amount of
Revolving Credit Loans and Swing Line Outstandings on such
date.
Section 1.06. The first sentence of Section 2.01(a) of the
Agreement is hereby amended by deleting the clause "(the 'Loans')" appearing
therein and inserting in lieu thereof the clause "(the 'Revolving Credit
Loans')".
Section 1.07. The second sentence of Section 2.01(a) of the
Agreement is hereby amended to read as follows:
A Lender shall have no obligation to make any Loan at
any time to the extent, after giving effect to such Loan, that
the sum of the aggregate principal amount of such Lender's
Revolving Credit Loans at such time plus such Lender's Swing
Line Outstandings at such time would exceed such Lender's
Committed Amount at such time.
Section 1.08. Section 2.01(c) of the Agreement is hereby
amended by deleting the phrase "(the 'Notes')" appearing therein and inserting
in lieu thereof the phrase "(such promissory notes, together with the Swing Line
Advance Note, being herein referred to as the 'Notes')".
Section 1.09. The Agreement is hereby amended by substituting
the phrase "Revolving Credit Loans" for the word "Loans" at each place it occurs
in the following sections: 2.01(b), 2.01(c), 2.01(d), 2.03, 2.04, 2.05, 2.06 and
2.07.
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Section 1.10. The first sentence of Section 2.08(a) of the
Agreement is hereby amended by adding thereto, immediately preceding the period
at the end thereof, the following: "and except for borrowings of and payments of
or with respect to Swing Line Advances".
Section 1.11. The Agreement is hereby amended by adding
thereto a new Section 2.14, to read as follows:
2.14. Swing Line Advances.
(a) Swing Line Advances. Subject to the
terms and conditions set forth in this Agreement and relying
upon the representations and warranties herein set forth,
the Swing Line Lender agrees (such agreement being herein
called the Swing Line Lender's "Swing Line Advance
Commitment") to make loans (the "Swing Line Advances") to
the Borrower from time to time on or after the date hereof
and to but not including the Revolving Credit Maturity Date.
The Swing Line Lender shall have no obligation to make any
Swing Line Advance to the extent that the aggregate
principal amount of the Swing Line Lender's Swing Line
Advances at any time outstanding would exceed $10,000,000.
Swing Line Advances may be requested by the Borrower in any
principal amount up to $10,000,000. The Swing Line Lender
shall have no obligation to make any Swing Line Advance to
the extent that doing so would cause the aggregate amount of
its outstanding Revolving Credit Loans and its Swing Line
Outstandings to exceed its Committed Amount.
(b) Nature of Credit. Within the limits of
time and amount set forth in this Section 2.14, and subject
to the provisions of this Agreement, the Borrower may
borrow, repay and reborrow Swing Line Advances hereunder.
The Borrower may prepay the Swing Line Advances at any time
without penalty.
(c) Swing Line Advance Note. The obligation
of the Borrower to repay the unpaid principal amount of the
Swing Line Advances made to it by the Swing Line Lender and
to pay interest thereon shall be evidenced in part by
promissory note of the Borrower, dated on or about the
effective date of the First Amendment to this Agreement,
(the "Swing Line Advance Note") in substantially the form
attached to the First Amendment to this Agreement as Exhibit
A, with the blanks
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appropriately filled, payable to the order of the Swing Line
Lender in a face amount equal to $10,000,000.
(d) Maturity. To the extent not due and
payable earlier, each Swing Line Advance shall be due and
payable on the third Business Day after such Swing Line
Advance is made to the Borrower hereunder. The Borrower
shall request Revolving Credit Loans to the extent necessary
to pay each Swing Line Advance at its maturity.
(e) Interest Rate. The unpaid amount of each
Swing Line Advance shall bear interest for each day until
due at a rate per annum equal to either (at the option of
the Borrower specified at the time of the request therefor)
the Base Rate for such day or 1.25% per annum in excess of
the Cost of Funds Rate for such day. After maturity of a
Swing Line Advance, the unpaid amount thereof shall bear
interest for each day at a rate per annum equal to 2.00% per
annum in excess of the Base Rate for such day. Interest on
each Swing Line Advance shall be payable at the maturity
thereof and, after maturity, on demand.
(f) Swing Line Advance Participating
Interests.
(i) Generally. At the discretion of the
Swing Line Lender at any time when one or more Swing Line
Advances have not been paid at their maturity, on one
Business Day's notice to each Lender, the Swing Line Lender
may require each other Lender to purchase, acquire, accept
and assume from the Swing Line Lender, without recourse to,
or representation or warranty by, the Swing Line Lender, an
undivided interest, in a proportion equal to such Lender's
Pro Rata share, in all of the Swing Line Lender's rights and
obligations in, to or under the Swing Line Lender's
outstanding Swing Line Advances, together with accrued and
unpaid interest thereon (such interest of each Lender being
referred to herein as a "Swing Line Advance Participating
Interest"). On the date that any Purchasing Lender becomes a
party to this Agreement in accordance with Section 9.14
hereof, Swing Line Advance Participating Interests in any
outstanding Swing Line Advances held by the Lender from
which such Purchasing Lender acquired its interest hereunder
shall be proportionately reallotted between such
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Purchasing Lender and such transferor Lender (and, to the
extent such transferor Lender is a Swing Line Lender, the
Purchasing Lender shall be deemed to have acquired a Swing
Line Advance Participating Interest from such transferor
Lender to such extent).
(ii) Obligations Absolute. Notwithstanding
any other provision hereof, each Lender hereby agrees that
its obligation to participate in each Swing Line Advance
issued in accordance herewith, and its obligation to make
the payments specified in Section 2.14(f)(iii) hereof, are
each absolute, irrevocable and unconditional and shall not
be affected by any event, condition or circumstance
whatever, provided, that a Lender shall have no obligation
to make any such payment at any time to the extent, after
giving effect to such such payment, that the sum of the
aggregate principal amount of such Lender's Revolving Credit
Loans at such time plus such Lender's Swing Line
Outstandings at such time would exceed such Lender's
Committed Amount at such time. The failure of any Lender to
make any such payment shall not relieve any other Lender of
its funding obligation hereunder on the date due, but no
Lender shall be responsible for the failure of any other
Lender to meet its funding obligations hereunder.
(iii) Payment by Lenders on Account of Swing
Line Advances. If the Swing Line Lender desires to sell
Swing Line Advance Participating Interests to the Lenders,
the Swing Line Lender will promptly notify the Agent thereof
and the Agent shall forthwith notify each Lender (which
notice may be by telephone promptly confirmed in writing)
thereof. No later than the Agent's close of business on the
date such notice is given by the Agent (if such notice is
given by the Agent before 12:00 p.m., Pittsburgh time on
such date), each such Lender will pay to the Agent, for the
account of the Swing Line Lender, in immediately available
funds, an amount equal to such Lender's Pro Rata share of
the outstanding principal amount of the Swing Line Advances
and accrued and unpaid interest thereon. If and to the
extent that any Lender fails to make such payment for the
account of the Swing Line Lender on such date, such Lender
shall pay such amount on demand, together with interest, for
the Swing Line Lender's own account, for each day from and
including the date of the Swing Line Lender's payment to and
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including the date of repayment to the Swing Line Lender
(before and after judgment) at the following rates per
annum: (x) for each day from and including the date of such
payment by the Swing Line Lender to and including the second
Business Day thereafter, at the Federal Funds Effective Rate
for such day, and (y) for each day thereafter, at the rate
applicable to the Swing Line Advances for such day.
(iv) Distributions to Participants. If, at
any time after the Swing Line Lender has made a Swing Line
Advance and has received from any Lender such Lender's share
of such Swing Line Advance, the Swing Line Lender receives
any payment or makes any application of funds on account of
such Swing Line Advance, the Swing Line Lender will pay on
the same day as received or deemed to be received to the
Agent, for the account of such Lender, such Lender's ratable
share of such payment.
(v) Rescission. If any amount received by
the Swing Line Lender on account of any Swing Line Advance
or interest thereon shall be avoided, rescinded or otherwise
returned or paid over by the Swing Line Lender for any
reason at any time, whether before or after the termination
of this Agreement (or the Swing Line Lender believes in good
faith that such avoidance, rescission, return or payment is
required, whether or not such matter has been adjudicated),
each such Lender will, promptly upon notice from the Agent
or the Swing Line Lender, pay over to the Agent for the
account of the Swing Line Lender its ratable share of such
amount.
(vi) Equalization. If any Lender receives
any payment or makes any application on account of its Swing
Line Advance Participating Interest, such Lender shall
forthwith pay over to the Swing Line Lender, in like kind of
funds received or applied by it, the amount in excess of
such Lender's ratable share of the amount so received or
applied.
Section 1.12. Section 5.01(c) of the Agreement is hereby
amended by deleting, in each of the six places it appears therein, the phrase
"the Borrower and".
Section 1.13. Paragraph (b) of Section 6.04 of the Agreement
is hereby amended by deleting the phrase "may sell
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receivables" appearing thereing and inserting in lieu thereof the phrase "may
sell mortgage loans and other receivables".
Section 1.14. Schedule 6.05 to the Agreement, entitled
Permitted Indebtedness and Guarantees, is hereby amended by adding thereto the
following:
9. Guarantee Equivalents of a Loan Party or a Subsidiary
of a Loan Party which are given or made as
representations and warranties, indemnities or
assurances of the payment or performance of Assured
Obligations in connection with securitization
transactions or other disposition transactions
permitted by Section 6.04(b) hereof, as to which
Assured Obligations the Deemed Obligor is a Loan
Party or a Subsidiary of a Loan Party.
10. Operating and Capital Maintenance Agreements issued
by a Loan Party, as required by the Federal Deposit
Insurance Corporation, with respect to Subsidiaries of
such Loan Party which are Utah Industrial Loan Companies.
Section 1.15. Paragraph (c) of Section 9.03 of the Agreement
is hereby amended by inserting therein, after the words "or amend" appearing
therein, the words "Section 2.14 or".
ARTICLE II
Conditions to Effectiveness
Section 2.01. This First Amendment shall become effective upon
the satisfaction of the following conditions precedent:
(a) This First Amendment shall have been executed and delivered by the
Borrower, the Agent and each of the Lenders. The Borrower shall have executed
and delivered a Swing Line Advance Note substantially in the form of Exhibit A
to this First Amendment. The Guarantor shall have executed and delivered a
Consent to this First Amendment in the form of Exhibit B to this First
Amendment.
(b) The Agent shall have received, with an executed counterpart for
each Lender, a legal opinion of counsel to the Borrower and the Guarantor, in
form satisfactory to the Agent, to substantially the effects (but with respect
to this First
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Amendment, the consent of the Guaranty with respect hereto, the Swing Line
Advance Note and the Agreement as amended hereby) contained in the opinion dated
December 10, 1996 delivered in connection with the execution and delivery of the
Agreement.
(c) The Agent shall have received, with an executed counterpart for
each Lender, certificates from such officers of the Borrower and the Guarantor
as to such matters as the Agent may request.
ARTICLE III
Miscellaneous
Section 3.01. (a) The Lenders hereby authorize and direct
the Agent to enter into this First Amendment.
(b) Capitalized terms used and not otherwise defined herein shall have
the meanings given such terms in the Agreement. Except as amended hereby, the
Agreement shall remain in full force and effect. This First Amendment may be
executed in one or more counterparts and all of such counterparts taken together
shall constitute one and the same instrument.
(c) THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
(d) The amendments set forth herein shall be limited precisely as
provided for herein and shall not be deemed to be waivers of, amendments to,
consents to or modifications of any term or provision of the Agreement or any
other Loan Document or instrument referred to therein. The Agreement, as amended
hereby, shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be duly executed as of the day and year first above written.
ATTEST: BLOCK FINANCIAL CORPORATION
By By
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Title: Title:
[Corporate Seal]
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MELLON BANK, N.A., as Lender and Swing
Line Lender and as Agent
By
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Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By
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Title:
THE CHASE MANHATTAN BANK
By
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Title:
CIBC INC.
By
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Title:
COMERICA BANK
By
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Title:
COMMERCE BANK, N.A.
By
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Title:
CREDIT LYONNAIS CHICAGO BRANCH
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By
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Title:
CAISSE NATIONALE DE CREDIT AGRICOLE
By
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Title:
THE FIRST NATIONAL BANK OF CHICAGO
By
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Title:
THE FUJI BANK, LIMITED
By
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Title:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By
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Title:
ISTITUTO BANCARIO SAN PAOLO DI TORINO SPA
By
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Title:
SOCIETE GENERALE
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By
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Title:
TORONTO DOMINION (TEXAS), INC.
By
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Title:
THE YASUDA TRUST & BANKING CO., LTD.
By
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Title:
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