exv10w4



 





Exhibit 10.4




SECOND AMENDMENT




     THIS
SECOND AMENDMENT, dated as of November 19, 2007 (this “Amendment”), amends the
Amended and Restated 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



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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.



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     4.3 Governing Law. This Amendment shall be construed in accordance with and
governed by the law of the State of New York.




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     Delivered as of the day and year first above written.




	 	 	 	 	 
	 	BLOCK FINANCIAL CORPORATION

 	 
	 	By:  	/s/ Becky S. Shulman
 	 
	 	 	Name:  	Becky S. Shulman 	 
	 	 	Title:  	Senior Vice President & Treasurer 	 
	 
	 	H&R BLOCK, INC.

 	 
	 	By:  	/s/ Becky S. Shulman
 	 
	 	 	Name:  	Becky S. Shulman 	 
	 	 	Title:  	Senior Vice President and Treasurer 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as

Administrative Agent, as a Lender and as Swingline Lender

 	 
	 	By:  	/s/ Susan E. Atkins
 	 
	 	 	Name:  	Susan E. Atkins 	 
	 	 	Title:  	Managing Director 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Alexa B. Bradford
 	 
	 	 	Name:  	Alexa B. Bradford 	 
	 	 	Title:  	Senior Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ VINCENT CLARK
 	 
	 	 	Name:  	Vincent Clark 	 
	 	 	Title:  	SENIOR VICE PRESIDENT 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	BNP PARIBAS

 	 
	 	By:  	/s/ Curt Price
 	 
	 	 	Name:  	Curt Price 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	/s/ Fikret Durmus
 	 
	 	 	Name:  	Fikret Durmus  	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CALYON NEW YORK BRANCH

 	 
	 	By:  	/s/ Sebastian Rocco
 	 
	 	 	Name:  	Sebastian Rocco 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	/s/ Walter Jay Buckley
 	 
	 	 	Name:  	Walter Jay Buckley 	 
	 	 	Title:  	Managing Director 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	MELLON BANK, N.A.

 	 
	 	By:  	/s/ Anne M. Westbrook
 	 
	 	 	Name:  	Anne M. Westbrook 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Michael J. Reymann
 	 
	 	 	Name:  	Michael J. Reymann 	 
	 	 	Title:  	Senior Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	COMMERZBANK AG, NEW YORK & GRAND CAYMAN BRANCHES

 	 
	 	By:  	/s/ Michael Leibrock
 	 
	 	 	Name:  	Michael Leibrock 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	 	 
	 	By:  	/s/ Michael Fruchter
 	 
	 	 	Name:  	Michael Fruchter 	 
	 	 	Title:  	Vice President 	 
	 



H&R Block, Second Amendment, November 19, 2007




 









 








	 	 	 	 	 
	 	FORTIS BANK SA NV
 CAYMAN ISLANDS BRANCH

 	 
	 	By:  	/s/ Marlene Purrier-Ellis
 	 
	 	 	Name:  	Marlene Purrier-Ellis 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	  	/s/ GILL DICKSON
 	 
	 	 	GILL DICKSON 	 
	 	 	DIRECTOR 	 
	 




 












 





	 	 	 	 	 
	 	COMERICA BANK

 	 
	 	By:  	/s/ Heather A. Whiting
 	 
	 	 	Name:  	Heather A. Whiting 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	LEHMAN BROTHERS BANK, FSB

 	 
	 	By:  	/s/ Janice M. Shugan
 	 
	 	 	Name:  	Janice M. Shugan 	 
	 	 	Title:  	Authorized Signatory 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	ROYAL BANK OF CANADA

 	 
	 	By:  	/s/ Dustin Craven
 	 
	 	 	Name:  	Dustin Craven 	 
	 	 	Title:  	Attorney-in-Fact 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	SUNTRUST BANK

 	 
	 	By:  	/s/ Daniel S. Komitor
 	 
	 	 	Name:  	Daniel S. Komitor 	 
	 	 	Title:  	Director 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	FIFTH THIRD BANK

 	 
	 	By:  	/s/ Christopher Motley
 	 
	 	 	Name:  	Christopher Motley 	 
	 	 	Title:  	VICE PRESIDENT 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	UBS LOAN FINANCE LLC

 	 
	 	By:  	/s/ Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa 	 
	 	 	Title:  	Associate Director 	 
	 
	 	 	 
	 	By:  	/s/ Richard L. Tavrow
 	 
	 	 	Name:  	Richard L. Tavrow  	 
	 	 	Title:  	Director 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	E. SUN COMMERCIAL BANK, LTD., LOS ANGELES BRANCH

 	 
	 	By:  	/s/ Benjamin Lin
 	 
	 	 	Name:  	Benjamin Lin 	 
	 	 	Title:  	EVP & General Manager 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	BANK MIDWEST, N.A.

 	 
	 	By:  	/s/ Brian Bower
 	 
	 	 	Name:  	Brian Bower 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	COMMERCE BANK, N.A.

 	 
	 	By:  	/s/ R. David Emley,  Jr.
 	 
	 	 	Name:  	R. David Emley,  Jr.  	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Marc C. Van Horn
 	 
	 	 	Name:  	Marc C. Van Horn 	 
	 	 	Title:  	Credit Manager 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	UMB BANK, N.A.

 	 
	 	By:  	/s/ Thomas S.  Terry
 	 
	 	 	Name:  	Thomas S.  Terry 	 
	 	 	Title:  	Senior Vice President