AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.1
AMENDMENT NO. 4 TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 29, 2009,
amends and supplements the Amended and Restated Credit Agreement dated as of June 9, 2008, as
amended (as so amended, the “Credit Agreement”) among ANCHOR BANCORP WISCONSIN INC., a Wisconsin
corporation (the “Borrower”), the financial institutions from time to time party thereto as lenders
(individually a “Lender” and collectively the “Lenders”) and U.S. BANK NATIONAL ASSOCIATION, a
national banking association, as administrative agent for the Lenders (in such capacity, the
“Agent”).
RECITALS
The parties acknowledge the following (capitalized terms used in this Amendment No. 4 and not
defined herein have the meanings ascribed thereto in the Credit Agreement):
A. The Borrower is indebted to the Agent and the Lenders under the Credit Agreement. As of
the date of this Amendment No. 4, the aggregate outstanding principal amount of such indebtedness
is $116,300,000.00.
B. To secure the indebtedness and obligations of the Borrower to the Agent and the Lenders,
the Borrower granted to the Agent a security interest in all of the issued and outstanding stock of
AnchorBank, fsb (the “Subsidiary Bank”) pursuant to the Pledge Agreement dated as of June 9, 2008
(the “Pledge Agreement”) from the Borrower to the Agent.
C. Events of Default have occurred and are continuing under the Credit Agreement by reason of
the Borrower failing to make a principal payment on the Notes required by the scheduled reduction
in the Total Revolving Loan Commitment on March 2, 2009 (the “Principal Reduction Failure”).
D. The Borrower has requested that the Agent and the Lenders forbear from exercising their
rights and remedies under the Credit Agreement and the Pledge Agreement arising from the Principal
Reduction Failure. On the terms and subject to the conditions set forth below, the Agent and the
Lenders are prepared to forbear from exercising such rights and remedies for a limited period of
time as set forth below.
AGREEMENTS
In consideration of the promises and agreements set forth in the Credit Agreement, as amended
and supplemented hereby, the Borrower and the Lenders agree as follows:
1. Definitions and References. Upon the execution and delivery of this Amendment No.
4 to Amended and Restated Credit Agreement (“Amendment No. 4”) by the Borrower, the Lenders and the
Agent and the satisfaction of the conditions listed in Section 5 below, each reference to the
Credit Agreement contained in the Credit Agreement, the Pledge Agreement and any other document,
instrument or agreement relating thereto means the Credit Agreement as amended by this Amendment
No. 4. This Amendment No. 4 is a Loan Document.
2. Acknowledgements by the Borrower. The Borrower acknowledges, represents and agrees
that:
(a) The Recitals are true and correct.
(b) Neither the Principal Reduction Failure nor any other Event of Default which has occurred
and is continuing has been waived by the Lenders.
(c) The Borrower has disclosed to the Agent and the Lenders each Event of Default existing on
the date of this Amendment No. 4.
(d) As a result of the Principal Reduction Failure, the Majority Lenders would be entitled to
direct the Agent to accelerate the maturity of the Notes and demand immediate payment.
(e) As a result of the Principal Reduction Failure, the Lenders have no obligation to make or
continue Loans to the Borrower.
(f) To the extent required by the Loan Documents and applicable law, the Borrower has received
adequate and proper notice of the Principal Reduction Failure and the Borrower hereby waives its
right, if any, to any further notice thereof.
(g) Neither this Amendment No. 4 nor any course of dealing between or among any of the parties
hereto is intended to operate, nor shall they be construed, as a waiver of the Principal Reduction
Failure or any other Event of Default, whether now existing or arising in the future, as to which
the Agent and the Lenders reserve all of their rights.
(h) Except as expressly provided to the contrary herein, (i) all of the Agent’s and the
Lenders’ rights and remedies available under the Loan Documents and at law and in equity remain
unchanged and available without restriction; (ii) the terms of the Loan Documents remain unchanged
and in full force and effect and have not been amended, modified, or changed other than pursuant to
a writing signed by the Agent, each Lender and the Borrower; and (iii) the obligations and duties
of the Borrower to the Agent and the Lenders are not released, impaired, diminished, or amended as
a result of the execution and delivery of this Amendment No. 4 or by any subsequent undertakings of
the parties.
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(i) The principal of and accrued interest on the Notes, all fees and all other obligations and
liabilities of the Borrower to the Agent and the Lenders under the Loan Documents are due and owing
without offsets, deductions, counterclaims, or defenses of any kind or character whatsoever
(j) The security interest of the Agent in the outstanding stock of the Subsidiary Bank
constitutes a valid, enforceable and perfected security interest as to which the Borrower has no
offsets, deductions, counterclaims, or defenses of any kind or character whatsoever.
(k) The Loan Documents are valid, binding and enforceable against the Borrower in accordance
with their respective terms, and the Borrower hereby ratifies and reaffirms its obligations under
each of the Loan Documents.
(l) The Agent and each Lender has (i) fully and timely performed all of its obligations and
duties to the Borrower under the Loan Documents; (ii) no obligation to (nor has it made any
representation of any kind that it will) extend any financial accommodations to the Borrower; (iii)
not made any agreements, representations, or commitments, other than those expressly set forth in
the Loan Documents; and (iv) acted reasonably, in good faith, and appropriately under the
circumstances, and within the Agent’s and each Lender’s rights under the Loan Documents and
applicable law, in all actions taken by the Agent and each Lender with respect to the Borrower.
(m) The purpose of this Amendment No. 4 is to provide the Borrower an additional period of
time to obtain funds to pay in full all of the obligations and liabilities of the Borrower to the
Agent and the Lenders.
(n) The forbearance by the Agent and the Lenders provided herein was requested by the Borrower
and shall result in a direct and substantial benefit to the Borrower.
3. Forbearance by the Agent and the Lenders.
(a) The Agent and the Lenders agree to forbear from exercising their rights and remedies
available to them against the Borrower as a result of the Principal Reduction Failure until the
earliest to occur of the following: (i) the occurrence of any Event of Default (other than the
Principal Reduction Failure) or (ii) the Maturity Date. The period of time from the date hereof
until the earlier to occur of (i) or (ii) above is referred to as the “Forbearance Period.” The
Forbearance Period shall terminate immediately and automatically, as provided above, without notice
to or action by any party.
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(b) Upon the termination of the Forbearance Period, any obligation of the Agent or the Lenders
to forbear from the exercise of its rights and remedies as provided in section 3(a) shall terminate
automatically and immediately without notice or further action and the Agent and the Lenders shall
be free to exercise immediately against the Borrower any and all of their rights and remedies,
including, without limitation, any rights and remedies under the Loan Documents or applicable law,
or in equity.
(c) Notwithstanding the agreement to forbear as set forth herein, the Agent may at any time,
in its sole discretion, take any action reasonably necessary to preserve or protect its interest in
the stock of the Subsidiary Bank or any other collateral securing any of the Obligations against
the actions of the Borrower or any third party (including any executions, levies, injunctions,
conversion, theft, commingling, waste, misuse, neglect, misappropriation, fraud, or any of the
like) without notice to or the consent of any party.
(d) The Agent and the Lenders have no obligation to, have not agreed to, nor have they made
any representation that they will, and this Amendment No. 4 shall not constitute an agreement by or
require the Agent or the Lenders to, renew or extend the Forbearance Period, grant additional
forbearance periods, extend the time for payment or make any Loans or otherwise extend credit to
the Borrower.
4. Amendments to Credit Agreement.
(a) The definition of “Base Rate” in Section 1.1 of the Credit Agreement is revised in its
entirety to read as follows:
“Base Rate” means 8.0%.
(b) A new defined term “Enforcement Action is added to Section 1.1 of the Credit Agreement to
read as follows:
“Enforcement Action” means any notice, directive, order, agreement, or other
action initiated by the any Regulatory Authority, to address any operational, financial,
managerial, or other deficiencies of the Borrower and/or the Subsidiary Bank.
(c) A new defined term “Gross Loans” is added to Section 1.1 of the Credit Agreement to read
as follows:
“Gross Loans” means the aggregate amount of loans, leases and other assets of
the Subsidiary Bank.
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(d) The defined term “Maturity Date” in Section 1.1 of the Credit Agreement is amended by
deleting the date “ May 29, 2009” and replacing it with the date “May 31, 2010”.
(e) A new defined term “Non-Performing Assets” is added to Section 1.1 of the Credit Agreement
to read as follows:
“Non Performing Assets” means the Subsidiary Bank’s assets classified as
“non-performing” as reported in the most recent FFIEC call report filed by the Subsidiary
Bank.
(f) A new defined term “Primary Capital” is added to Section 1.1 of the Credit Agreement to
read as follows:
“Primary Capital” means the sum of the Subsidiary Bank’s Tier 1 Capital plus
the Subsidiary Bank’s loan loss reserve, each as reported in the most recent quarterly
report filed by the Subsidiary Bank with its primary Regulatory Authority.
(g) A new defined term “Deferred Interest Rate” is added to Section 1.1 of the Credit
Agreement to read as follows:
“Deferred Interest Rate” means 4.0%.
(h) Notwithstanding any provision in the Credit Agreement to the contrary, the Lenders have no
obligation to make any additional Loans to the Borrower and amounts repaid may not be reborrowed.
(i) Section 2.3(a) of the Credit Agreement is amended in its entirety to read as follows:
(a) Interest Rate. The entire unpaid principal balance of the Loans
outstanding from time to time shall bear interest at an annual rate equal to the Base Rate
plus the Deferred Interest Rate; provided, however, that in the event (i) all of the
Obligations are paid in full [1] by September 30, 2009, the Deferred Interest Rate shall be
reduced to 0.0% or [2] by December 31, 2009, the Deferred Interest Rate shall be reduced to
1.0%, or, in the alternative, (ii) the principal amount of the Obligations is reduced by
$58,000,000.00 [1] by September 30, 2009, the Deferred Interest Rate shall be reduced to
2.0% or [2] by December 31, 2009, the Deferred Interest Rate shall be reduced to 3.0%. The
Agent’s internal records of applicable interest rates shall be determinative in the absence
of manifest error.
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(j) Section 2.3(b) of the Credit Agreement is amended in its entirety to read as follows:
(b) Interest Payments. Interest accruing on the Loans at the Base Rate is due
on the last day of each month and on the Maturity Date. Interest accruing on the Loans at
the Deferred Interest Rate is due on the earlier to occur of (i) the date the Loans are paid
in full or (ii) the Maturity Date.
(k) Section 2.8(a) of the Credit Agreement is revised in its entirety to read as follows:
(a) Mandatory. No later than one Business Day after the receipt of Net
Proceeds of Additional Capital, the Borrower shall prepay the Obligations by an amount equal
to the Net Proceeds of Additional Capital so received; provided that if such Net Proceeds of
Additional Capital are received from the United States Department of the Treasury and the
terms of such investment prohibit the use of the investment proceeds to repay senior debt
such as the Obligations, then no prepayment is required. Notwithstanding the foregoing, the
Obligations shall be repaid to $0.00 on the earlier to occur of (i) the date of the
Borrower’s receipt of Net Proceeds of Additional Capital of not less than $116,300,000.00 or
(ii) May 31, 2010.
(l) Section 4.11(n) of the Credit Agreement is created to read as follows:
(n) Within 15 days after the end of each calendar month, a certificate in the form of
Exhibit D attached hereto, duly executed by the President or Vice President of the Borrower,
indicating whether the Borrower is in compliance with the covenants set forth in sections
4.15(a), 4.15(b) and 4.15(c).
(m) Section 4.15(b) of the Credit Agreement is amended in its entirety to read as follows:
(b) The ratio of Non-Performing Assets to Primary Capital shall not exceed (i) 60.0% as
of June 30, 2009 or (ii) 62.0% as of the last day of any fiscal quarter thereafter.
(n) Section 4.15(c) of the Credit Agreement is revised in its entirety to read as follows:
(c) The ratio of Non-Performing Loans to Gross Loans shall not exceed (i) 5.25% as of
May 31, 2009 and June 30, 2009 or (ii) 5.75% as of the last day of any month thereafter.
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(o) Section 4.20 of the Credit Agreement is revised in its entirety to read as follows:
4.20 Escrow Deposit. The Borrower agrees to take such action as is necessary
in order that, no later than December 15, 2009, the Borrower shall have sufficient funds to
pay (a) the aggregate interest that would accrue on the Notes at the Base Rate during the
period from January 1, 2010 through May 31, 2010 assuming that the principal amount
outstanding on the Notes as of December 15, 2009 remains outstanding until May 31, 2010 and
(b) the aggregate dividends required to be paid on the Borrower’s Fixed Rate Cumulative
Preferred Stock, Series B during such period. The Borrower agrees, no later than
December 15, 2009, to deposit an amount equal to the amount set forth in clause (a) in the
preceding sentence into an escrow account at the Agent established pursuant to that certain
Escrow Agreement between the Agent and the Borrower dated as of March 31, 2009.
(p) Section 4.22 of the Credit Agreement is created to read as follows:
4.22 Financial Consultant. The Borrower at all times during the Forbearance
Period shall retain, at its own expense, the services of a financial consultant reasonably
acceptable to the Agent and the Lenders, on terms and conditions acceptable to the Agent and
the Lenders. The Agent and the Lenders, and their respective representatives, shall have
unlimited access to such financial consultant and any reports or other documents prepared by
such financial consultant.
(q) Section 4.23 of the Credit Agreement is created to read as follows:
4.23 Liens in favor of Agent. The Borrower and each Subsidiary (other than the
Subsidiary Bank) shall, at the request of the Lenders, grant to the Agent on behalf of the
Lenders a security interest in and lien on all of their respective properties. The Borrower
shall, and shall cause each such Subsidiary to, execute such documents and take such actions
as the Agent shall request from time to time to grant, perfect, or protect such security
interests or liens.
(r) Section 4.24 of the Credit Agreement is created to read as follows:
4.24 Non-Public Enforcement Actions. With respect to any Enforcement Action
that is not of public record, the Borrower shall use its best efforts to (a) provide the
Agent and the Lenders prompt written notice of such
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Enforcement Action (to the extent it is not prohibited from doing so by the applicable
Regulatory Authority or by law), (b) comply with any and all directives from the Regulatory
Authority bringing such Enforcement Action as to all matters within the Borrower’s control
which can reasonably accomplished and (c) neither take any action, nor fail to take any
action, within its control, that would cause any further Enforcement Action to be issued,
including, without limitation, a memorandum of understanding or a cease and desist directive
or order.
(s) Section 4.25 of the Credit Agreement is created to read as follows:
4.25 Public Enforcement Actions. With respect to any Enforcement Action that
is of public record, the Borrower shall (a) provide the Agent and the Lenders prompt written
notice of such Enforcement Action and (b) comply with any and all directives from the
Regulatory Authority bringing such Enforcement Action, including, without limitation, any
memorandum of understanding or a cease and desist directive or order, as to all matters
within its control which can be reasonably accomplished.
(t) Section 4.26 of the Credit Agreement is created to read as follows:
4.26 Agent’s and Lenders’ Access. The Borrower shall permit representatives of
the Agent or any Lender access to the Borrower’s and each Subsidiary’s places of business,
books, records, and documents and any collateral securing any of the Obligations, including,
without limitation, the stock transfer records of the Subsidiary Bank, for the purpose of
inspecting, examining and verifying, same or exercising any of the Agent’s or any Lender’s
rights or remedies under any of the Loan Documents (each, an “Inspection”). The
representatives of the Agent or any Lender shall have such access for an Inspection at any
reasonable time and as often as the Agent or any Lender may reasonably desire, and the
Borrower shall reimburse the Agent or any Lender, as the case may be, for the cost of any
such Inspection.
(u) Exhibit D attached to this Amendment No. 4 shall be Exhibit D to the Credit Agreement.
5. Closing Conditions. This Amendment No. 4 shall become effective upon the execution
and delivery of this Amendment No. 4 by the Borrower, the Lenders and the Agent, and the receipt by
the Agent of the following
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(a) copies, certified to be accurate and complete by the Secretary or Assistant Secretary of
the Borrower, of a resolution of the Board of Directors of the Borrower authorizing the execution
and delivery of this Amendment No. 4;
(b) a certificate of the President or Vice President of the Borrower to the effect that the
representations and warranties of the Borrower set forth in the Credit Agreement and the other Loan
Documents are accurate and complete in all material respects and that no Default or Event of
Default exists other than those as disclosed to the Lenders;
(c) such other documents and instruments relating hereto as the Agent shall reasonably
request.
6. Amendment Fee. The Borrower shall pay to the Agent, for the ratable account of the
Lenders, an amendment fee in the amount of $3,489,000.00 (the “Amendment Fee”). The Amendment Fee
shall be fully earned by the Lenders upon execution of this Amendment No. 4 by the Lenders and
shall be due and payable on the earlier to occur of (i) the date the Loans are paid in full or (ii)
the Maturity Date. Notwithstanding the foregoing, in the event all of the Obligations are paid in
full (i) by September 30, 2009, the Amendment Fee shall be reduced to $1,163,000.00 or (ii) by
December 31, 2009, the Amendment Fee shall be reduced to $2,326,000.00.
7. Representations and Warranties; No Default.
(a) The execution and delivery of this Amendment No. 4 has been duly authorized by all
necessary corporate action on the part of the Borrower and does not violate or result in a default
under the Borrower’s Articles of Incorporation or By-Laws, any applicable law or governmental
regulation or any material agreement to which the Borrower is a party or by which it is bound.
(b) Upon the execution and delivery of this Amendment No. 4, the representations and
warranties of the Borrower in the Credit Agreement shall be true and correct in all material
respects and, except for the Principal Reduction Failure, no Default or Event of Default shall
exist.
(c) As of the date hereof, Borrower has (i) paid when due all dividends required to be paid on
the Borrower’s Fixed Rate Cumulative Preferred Stock, Series B (“Dividends”) during the period from
March 1, 2009 through the date hereof and (ii) has taken all action necessary to ensure that all
Dividends required to be paid during the period from the date hereof through December 31, 2009 will
be paid when due.
8. Waiver, Release of Claims, and Indemnification. The Borrower, for itself and each
and all of its officers, employees, agents, shareholders, members,
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directors, heirs, successors, and assigns, does hereby fully, unconditionally, and irrevocably
waive and release the Agent and the Lenders and their respective officers, employees, agents,
directors, shareholders, affiliates, attorneys, successors, and assigns (each a “Released Party”),
of and from any and all claims, liabilities, obligations, causes of action, defenses,
counterclaims, and setoffs, of any kind, whether known or unknown and whether in contract, tort,
statute, or under any other legal theory, arising out of or relating to any act or omission by the
Agent, any Lender or any other Released Party, on or before the date of this Amendment No. 4. The
Borrower agrees to defend, indemnify, and hold the Agent, each Lender and each other Released Party
harmless from and against any and all losses, costs, expenses, damages, or liabilities (including
reasonable attorneys’ fees) incurred in connection with any demand, claim, counterclaim, cause of
action, or proceeding brought as a result of, or arising out of, or in any way related to any of
the Loan Documents, this Amendment No. 4, any documents executed in connection with or related to
any of the Loan Documents, the performance by the Agent and each Lender under any of the Loan
Documents or any documents executed in connection with or related to this Amendment No. 4 or any of
the other Loan Documents, or any transaction financed or to be financed, in whole or in part,
directly or indirectly, with the proceeds of any Loans. Notwithstanding the foregoing, the
Borrower shall not have any obligation to defend, indemnify, or hold the Agent, any Lender or any
other Released Party harmless with respect to any loss, cost, expense, damage, or liability
resulting solely from willful misconduct on the part of the Agent, such Lender or such other
Released Party.
9. Governing Law. This Amendment No. 4 shall be governed by and construed in
accordance with the internal laws (without regard to the conflict of law provisions) of the State
of Wisconsin.
10. Costs and Expenses. The Borrower agrees to pay to the Agent and each Lender all
costs and expenses (including reasonable attorneys’ fees) paid or incurred by the Agent or such
Lender in connection with the negotiation, execution and delivery of this Amendment No. 4.
11. Full Force and Effect. The Credit Agreement, as amended by this Amendment No. 4,
remains in full force and effect.
12. Relief from the Automatic Stay. As a material inducement to the Agent and the
Lenders to enter into this Amendment No. 4, the Borrower hereby stipulates and agrees that the
Agent and the Lenders shall be entitled to relief from the automatic stay imposed by 11 U.S.C.
§ 362 or any similar stay or suspension of remedies under any other federal or state law in the
event the Borrower becomes subject to a bankruptcy or other insolvency proceeding, to
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allow the Agent and the Lenders to exercise their rights and remedies under the Pledge
Agreement.
13. Counterparts. This Amendment No. 4 may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signatures pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically attached to the same
document.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 4 as of the date first
set forth above.
| ANCHOR BANCORP WISCONSIN INC. | ||||||
| BY | /s/ Xxxx Xxxxxxxxx
|
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| Its Senior VP, Secretary, General Counsel | ||||||
| U.S. BANK NATIONAL ASSOCIATION, as the Agent and a Lender | ||||||
| BY | /s/ Xxxxxx Xxxxxx
|
|||||
| Its Vice President | ||||||
| ASSOCIATED BANK, NATIONAL ASSOCIATION | ||||||
| BY | /s/ Xxxxxxx Xxxxxx
|
|||||
| Its Sr. Vice President | ||||||
| BANK OF AMERICA, N.A. | ||||||
| BY | /s/ Xxxxxx Xxxxxxxx
|
|||||
| Its Senior Vice President | ||||||
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EXHIBIT D
FINANCIAL COVENANT COMPLIANCE CERTIFICATE
U.S. Bank National Association
Special Assets Group
000 Xxxx Xxxxxxxxx Xxxxxx
XX-XX-X0X
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx, Vice President
Special Assets Group
000 Xxxx Xxxxxxxxx Xxxxxx
XX-XX-X0X
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx, Vice President
Dear Xx. Xxxxxx:
Reference is made to that certain
Amended and Restated Credit Agreement, dated as of May 29,
2009 (the “Credit Agreement”), by and between Anchor Bancorp Wisconsin Inc. (the “Borrower”), the
financial institutions from time to time party thereto (the “Lenders”) and U.S. Bank National
Association, as administrative agent for the Lenders (“Agent”). Unless otherwise defined herein,
capitalized terms used herein have the respective meanings assigned to them in the Credit Agreement
and section references herein are to the sections of the Credit Agreement.
This Certificate is provided
pursuant to section 4.11(n) of the Credit Agreement.
The undersigned hereby
certifies that:
1. (He) (She)
is the [President] [Vice President] of the Borrower.
2. Financial Covenants:
(a) Through
, 20___, the Subsidiary Bank has at all times maintained all capital
ratios required for the Subsidiary Bank to be considered “well capitalized” under the applicable
regulations and guidelines issued by the Office of Thrift Supervision and all other Regulatory
Agencies (Required by Section 4.15(a) of the Credit Agreement.)
(b) As of
, 20___, the ratio of Non-Performing Assets to Primary Capital is ___%.
(Section 4.15(b) of the Credit Agreement requires that the ratio of Non-Performing Assets to
Primary Capital not exceed (i) 60.0% as of June 30, 2009 or (ii) 62.0% as of the last day of any
fiscal quarter thereafter.) (To be completed at the end of each quarter.)
(c) As of
, 20___, the ratio of Non-Performing Loans to Gross Loans is ___%.
(Section 4.15(c) of the Credit Agreement requires that the ratio of Non-Performing Loans to Gross
Loans not exceed (i) 5.25% as of May 31, 2009 and June 30, 2009 or (ii) 5.75% as of the last day of
any month thereafter.)
3. Attached hereto are
detailed calculations supporting the statements made in 2(a) through
2(c) above. Such calculations were made in accordance with the applicable definitions in the
Credit Agreement and the statements made in 2(a) through 2(c) above are true and correct.
Dated:
___, 20_.
, [President] [Vice President]
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