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EXHIBIT 10.23
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
LASALLE BANK NATIONAL ASSOCIATION, AND
MERCANTILE BANK NATIONAL ASSOCIATION
JANUARY 25, 2000
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AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (the "Agreement") is
entered into as of the 25th day of January, 2000, among AMERITRADE HOLDING
CORPORATION, a Delaware corporation having its principal place of business at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), FIRST NATIONAL
BANK OF OMAHA, a national banking association having its principal place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Agent" or
"FNB-O"), and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, an Illinois banking association
having its principal place of business at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LASALLE BANK NATIONAL ASSOCIATION, a national banking
association located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and
MERCANTILE BANK NATIONAL ASSOCIATION, a national banking association having its
principal place of business at One Mercantile Center, 7th and Washington TRAM
▇▇-▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
I. DEFINITIONS
For purposes of this Agreement, the following definitions shall apply:
Advance: Any advance of funds to the Borrower by the Revolving Lenders or
any of them under the revolving credit facility provided in this
Agreement.
Advanced
Clearing: Advanced Clearing, Inc., a Nebraska corporation, and wholly-owned
subsidiary of the Borrower.
Agreement: This Amended and Restated Revolving Credit Agreement dated as
of January 25, 2000, among the Borrower and the Revolving
Lenders, as amended or restated from time to time.
Annualized
Modified
Cash Flow: The (i) product of (a) 4 times (b) the sum, for the three months
preceding the date of determination of the Borrower's consolidated
net income (loss) before taxes, and plus or minus any
non-ordinary non-cash charges or credits to earnings for each
month in such quarter, plus (ii) advertising expenditures in
each month in excess of $667,000.
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Base Rate: The floating per annum interest rate published from time to time
as the "Prime Rate" (the base rate on corporate loans posted
by at least 75% of the nation's 30 largest banks) in the
Midwest Edition of the Wall Street Journal on the first
business day of the month, or if no such rate is published on
such date, on the last preceding date when such rate was
published.
Borrower: Ameritrade Holding Corporation, a Delaware corporation having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Business
Day: Any day other than a Saturday, Sunday or a legal holiday on
which banks in the State of Nebraska, Illinois or Missouri are
not open for business.
Change of
Control: (a) At any time when any of the equity securities of the Borrower
shall be registered under Section 12 of the Securities Exchange
Act of 1934 as amended from time to time (the "Exchange Act"), (i)
any person, entity or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) (other than any person which is a
management employee, or any such "group" which consists entirely
of management employees, of the Borrower) being or becoming the
beneficial owner, directly or indirectly, of voting stock of the
Borrower in an amount sufficient to elect a majority of the
members of the Borrower's board of directors, or (ii) a majority
of the members of the Borrower's board of directors (the "Board")
consisting of persons other than Continuing Directors (as
hereinafter defined); and (b) at any other time, the voting stock
of the Borrower being owned beneficially, directly or indirectly,
by any person, entity or group other than employees of the
Borrower or its Subsidiaries. As used herein, the term "Continuing
Director" means any member of the Board on the date of this
Agreement, and any other member of the Board who shall be
recommended or elected to succeed a Continuing Director by a
majority of Continuing Directors who are the members of the Board.
Collateral: All personal property of the Borrower described in the Security
Agreement and the Pledge Agreement, whether now owned or hereafter
acquired, including, without limitation:
(a) all of the Borrower's stock in any present or
future subsidiary, including without limitation, Advanced
Clearing, Inc., Ameritrade (Inc.), and Accutrade, Inc.;
(b) all of the Borrower's interest in NITE Stock
with a market value of Fifty Million Dollars ($50,000,000);
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(c) all of the Borrower's accounts, accounts
receivable, chattel paper, documents, instruments and other
securities, goods, inventory, equipment, furniture and
fixtures, general intangibles, contract rights, computer,
data processing, hardware and software licenses, books and
records; and
(d) all proceeds and products of the foregoing.
Commitment: As to each Revolving Lender, such Revolving Lender's pro
rata percentage or maximum dollar amount of the commitments set
forth in Section 2.1 of this Agreement.
Core Retail
Accounts: Open accounts of Ameritrade (Inc.) and Accutrade, Inc. which have
a currently valid account number, are eligible for online trading,
and are reported publically on a quarterly basis.
Default Rate: The Revolving Credit Rate as defined herein plus 3.0%.
Event of
Default: Any of the events set forth in Section 6.1 of this Agreement.
Existing
Credit
Facility: The Revolving Credit Facility dated as of January 16, 1998, as
previously amended, by and among the Borrower, FNB-O, ▇▇▇▇▇▇,
LaSalle and Mercantile.
FNB-O: First National Bank of Omaha, a national banking association
having its principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and its successors and assigns.
▇▇▇▇▇▇: ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking
association, having its principal place of business in Chicago,
Illinois.
Indebtedness: All loans and other obligations of the Borrower for borrowed
money, without duplication, (including, without limitation,
the indebtedness due to the Revolving Lenders) regardless of
the maturity thereof, but excluding capital leases incurred in
the ordinary course of business and excluding net payables to
customers and broker-dealers in the ordinary course of
business and excluding Subordinated Debt.
LaSalle: LaSalle Bank National Association, a national banking
association having its principal place of business in Chicago,
Illinois.
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LIBOR
Rate: The floating per annum interest rate published from time to
time as the "90 day LIBOR rate" in the Midwest Edition of the
Wall Street Journal on the first business day of each month,
or if no such rate is published on such date, on the last
preceding date on which such rate was published.
Mercantile: Mercantile Bank National Association, a national banking
association having its principal place of business in St. Louis,
Missouri.
Net Operating
Profit After
Taxes: For any period, the net earning (or loss) after taxes of
Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period and determined in
conformity with generally accepted accounting principles;
provided that there shall be excluded (i) the income (or loss)
of any entity accrued prior to the date it becomes a
Subsidiary of Borrower or is merged into or consolidated with
Borrower and (ii) any extraordinary gains or losses for such
period determined in accordance with generally accepted
accounting principles.
Net Worth: The Borrower's consolidated net worth as determined in accordance
with generally accepted accounting principles.
NITE Stock: The common stock, or any securities exchanged for the common
stock, of Knight/Trimark Group, Inc.
Notes: (i) The revolving credit notes, substantially in the form of
Exhibit A attached to this Agreement, which notes replace the
revolving credit notes issued and outstanding under the
Existing Agreement, and such additional similar notes as may
be issued to certain additional Revolving Lenders, and all
extensions, renewals, and substitutions of or for the
foregoing.
Operative
Documents: This Agreement, the Notes, the Pledge Agreement, the Security
Agreement, the financing statements regarding the Collateral and
the documents and certificates delivered pursuant to Section 5.1.
Permitted
Investments: Any one or more of the following:
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(a) certificates of deposit fully covered by Federal
Deposit Insurance and maintained at a bank having capital
and surplus of not less than $50,000,000;
(b) short-term obligations of, or obligations
fully guaranteed by, the United States of America or any
agencies thereof;
(c) commercial paper rated at least A-1 by Standard
and Poor's Corporation or P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc.; and
(d) demand deposit accounts maintained in the
ordinary course of the Borrower's business at a bank
having capital and surplus of not less than $50,000,000
Permitted
Liens: (i) Liens existing on the date of this Agreement as shown on
Schedule A; (ii) Liens for taxes, assessments, governmental
charges or claims which are not yet delinquent or which are being
contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if a reserve or other
appropriate provision, if any, as shall be required in conformity
with GAAP shall have been made therefor; (iii) statutory Liens of
landlords and carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen or other like Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent
or being contested in good faith by appropriate proceedings, and
if a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor;
(iv) Liens (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974, as amended) incurred or deposits made
in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security; (v) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money); (vi) easements,
rights-of-way, restrictions, minor defects or irregularities in
title and other similar charges or encumbrances not interfering in
any material respect with the business of the Borrower or any of
its Subsidiaries incurred in the ordinary course of business;
(vii) Liens securing reimbursement obligations with respect to
documentary letters of credit which encumber documents and other
property relating to such letters of credit and the products and
proceeds thereof; (viii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; (ix)
judgment and attachment Liens not giving rise to a Default or an
Event of Default; (x) leases or subleases granted to others not
interfering in any material
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respect with the business of the Borrower or any of its
Subsidiaries; (xi) customary Liens securing indebtedness under
interest rate protection agreements and foreign currency hedging
arrangements; (xii) Liens encumbering deposits made to secure
obligations arising from statutory, regulatory, contractual or
warranty requirements of the Borrower; (xiii) any interest or
title of a lessor in the property subject to any capital lease
obligation or operating lease entered into by the borrower in the
ordinary course of business provided that the incurrence of any
related indebtedness is permitted by this Agreement; (xiv) Liens
of banks in funds on deposit with such banks; (xv) mortgage or
deed of trust securing real estate loan for premises located in
Kansas City, Missouri, in the approximate amount of $7,500,000,
and (xvi) extensions, renewals or regranting of any Liens referred
to in clauses (i) through (xv) above.
Pledge
Agreement: The Amended and Restated Stock Pledge Agreement dated as of
the date hereof, between the Borrower and FNB-O, as agent for
the Revolving Lenders, as amended or restated from time to
time.
Pledged
NITE Stock: The NITE Stock pledged to the Revolving Lenders under the Pledge
Agreement.
Principal
Loan
Amount: The aggregate principal amount of all unpaid Advances made under
the Notes outstanding at any time.
Quarterly
Compliance
Certificate: The certificate delivered to the Revolving Lenders by the Borrower
pursuant to Section 4.1(e).
Regulatory
Net Capital The amount of net capital required for Advanced
Clearing under Section 15(c)(3) of the Securities Exchange Act
of 1934 and Regulations promulgated thereunder in effect as of
December 31, 1999.
Requisite
Revolving
Lenders Except where a higher percentage is required pursuant to the
express terms of this Agreement, including without limitation
Section 7.1, Revolving Lenders owning two-thirds (2/3) by
amount of the Principal Loan Amount outstanding or, if no
Principal Loan Amount is outstanding, Revolving Lenders
representing two-thirds (2/3) of the Commitments in effect at
such time.
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Revolving
Credit Rate: As defined in Section 2.3 hereof.
Revolving
Lenders: FNB-O, Harris, LaSalle, Mercantile, and such additional
Revolving Lenders as may be added as Revolving Lenders under
Section 2.1 hereto from time to time in accordance with this
Agreement, as such Revolving Lenders may be modified by
assignments permitted under Section 7.4 from time to time.
Security
Agreement: The Amended and Restated Security Agreement dated as of this
date between the Borrower and FNB-O as agent for the Revolving
Lenders, as amended from time to time.
Subordinated
Debt: The Convertible Subordinated Notes due August, 2004, issued in
the amount of $200,000,000 by the Borrower, which Notes are
unsecured obligations of the Borrower, subordinated in right
of payment to all existing and future senior indebtedness of
the Borrower (including without limitation the Notes).
Subsidiary: Any corporation business association, partnership, joint
venture, limited liability company or other business entity in
which the Borrower, or one or more of its Subsidiaries, or the
Borrower and one or more of its Subsidiaries has more than 50%
of the equity ownership thereof, or any other entity which,
pursuant to GAAP, would be considered a subsidiary of the
Borrower or any one or more of its Subsidiaries.
Termination
Date: December 31, 2001, or such later date as is approved in writing
by the Revolving Lenders.
All accounting terms not otherwise defined herein shall have the meaning
ordinarily applied under generally accepted accounting principles from time to
time in effect.
II. REVOLVING FACILITY
2.1 Revolving Credit. Until December 31, 2001, the Revolving
Lenders severally agree to advance funds for general corporate purposes not to
exceed the amount shown below (the "Base Revolving Credit Facility") to the
Borrower on a revolving credit basis. Such Advances shall be made on a pro rata
basis by the Revolving Lenders, based on the following maximum Advance limits
and applicable percentages for each Revolving Lender: (i) as to
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FNB-O, $26,000,000 (28.8889%); (ii) as to ▇▇▇▇▇▇, $20,000,000 (22.2222%); (iii)
as to Mercantile, $24,000,000 (26.6667%); (iv) as to LaSalle, $20,000,000
(22.2222%); provided, however, that each Revolving Lender's Commitment is
several and not joint or joint and several. The Base Revolving Credit Facility
shall be subject to reduction as specified in Section 4.2 below.
The Borrower shall not be entitled to any Advance hereunder if, after the
making of such Advance, the Principal Loan Amount would exceed the least of (x)
the then current Base Revolving Credit Facility, or (y) the sum of $25,000,000
plus one and one-half (1 1/2) times the Borrower's Annualized Modified Cash
Flow, or (z) the number of Core Retail Accounts times $200, determined in each
case after giving effect to the requested Advance. Nor shall the Borrower be
entitled to any further Advances hereunder after the occurrence and during the
continuation of any Event of Default or any event which with the passage of time
or the giving of notice or both would constitute an Event of Default, or if the
Borrower's representations and warranties cease to be true and correct at the
time of the requested Advance. Advances shall be made, on the terms and
conditions of this Agreement, upon the Borrower's request. Requests shall be
made by 12:00 noon Omaha time on the Business Day prior to the requested date of
the Advance. Requests shall be made by presentation to FNB-O of a drawing
certificate in the form of Exhibit B. The Borrower's obligation to make payments
of principal and interest on the foregoing revolving credit indebtedness shall
be further evidenced by the Notes.
2.2 Revolving Credit Fees.
(a) The Borrower shall pay to the Revolving Lenders a commitment fee
equal to 1/4 of 1% of the average unused facility, payable quarterly in
arrears. Such fee shall be paid to the Agent and based on the average
unused portion of the revolving credit commitment during the applicable
quarter. FNB-O shall distribute to each Revolving Lender its pro rata
share of such fees based on the maximum Advance limits set forth above.
(b) The Borrower shall also pay a closing fee of $22,500.00, which
is equal to 15 basis points (.0015) times the amount of the Base Revolving
Credit Facility, as set forth in Section 2.1 above, in excess of
$75,000,000, such closing fee to be payable at closing. FNB-O shall
distribute to each Revolving Lender its pro rata share of such fees based
on its portion of the increases in the facility from the Existing
Agreement.
2.3 Interest on Revolving Credit. Interest shall accrue on the Principal
Loan Amount outstanding from time to time at a variable rate per annum (the
"Revolving Credit Rate") equal to the greater of (a) the Base Rate minus 3/4 of
1%, or (b) the LIBOR Rate plus 1.50%. Such rate shall fluctuate monthly based on
changes in such rates on the first business day of each month. All interest
under the Notes shall accrue based on a year of 360 days, and for actual days
elapsed. Interest shall be due no later than the tenth day of each month.
Notwithstanding anything to the contrary elsewhere herein, after an Event of
Default has occurred and is continuing, interest shall
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accrue on the entire outstanding balance of principal and interest on all
indebtedness hereunder at a fluctuating rate per annum equal to the Default
Rate.
2.4 Payments. On or prior to the end of each calendar quarter the
Borrower shall repay the amount, if any, outstanding on the Notes which in the
aggregate exceeds the amount of the Base Revolving Credit Facility to be in
place on the next succeeding Business Day following such calendar quarter. The
balance of the loan on December 31, 2001, if any, shall be due on the
Termination Date. All obligations of the Borrower under the Notes and under the
other Operative Documents shall be payable in immediately available funds in
lawful money of the United States of America at the principal office of FNB-O in
Omaha, Nebraska or at such other address as may be designated by FNB-O in
writing. In the event that a payment day is not a Business Day, the payment
shall be due on the next succeeding Business Day.
2.5 Prepayments. The Borrower may at any time prepay the Principal Loan
Amount, in whole or in part, outstanding under the Notes if the Borrower has
given the Agent at least one (1) Business Day's prior written notice of its
intention to make such prepayment. Any such prepayment may be made without
penalty. All such prepayments shall be made pro rata among the Revolving Lenders
based on their respective pro rata share of the amounts outstanding on the
Notes. No such prepayment shall reduce the Base Revolving Credit Facility.
2.6 Security. All obligations of the Borrower hereunder and under the
Operative Documents, including, without limitation, the Borrower's obligations
to make payments of principal and interest on the Notes shall be secured by a
first security interest in the Collateral, as more specifically described in the
Security Agreement and the Pledge Agreement.
III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that as of the date hereof and as of
the date of each and every request for an Advance hereunder, the following are
and shall be true and correct:
3.1 Corporate Existence. It and each of its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and duly qualified and in good standing in all states where it
is doing business except where the failure to be so qualified would not have a
material adverse effect on it and its Subsidiaries taken as a whole, and it has
full corporate power and authority to own and operate its properties and to
carry on its business.
3.2 Corporate Authority. It has full corporate power, authority and legal
right to execute, deliver and perform the Operative Documents to which it is a
party, and all other instruments and agreements contemplated hereby and thereby,
and to perform its obligations hereunder and thereunder; and such actions have
been duly authorized by all necessary corporate
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action, and are not in conflict with any applicable law or regulation, or any
order, judgment or decree of any court or other governmental agency or
instrumentality or its articles of incorporation or bylaws, or with any
provisions of any indenture, contract or agreement to which it or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries or any of its
or their property may be bound.
3.3 Validity of Agreements. The Borrower's Operative Documents have been
duly authorized, executed and delivered and constitute its legal, valid and
binding agreements, enforceable against the Borrower in accordance with their
respective terms (except to the extent that enforcement thereof may be limited
by any applicable bankruptcy, reorganization, moratorium or similar laws now or
hereafter in effect, or by principles of equity).
3.4 Litigation. Neither the Borrower nor any Subsidiary is a party to any
pending lawsuit or proceeding before or by any court or governmental body or
agency, which, if adversely determined, is likely to have a material adverse
effect on the Borrower's ability to perform its obligations under its Operative
Documents or a Subsidiary's ability to pay dividends to the Borrower; nor is the
Borrower aware of any threatened lawsuit or proceeding, to which it or any
Subsidiary may become a party or of any investigation of any Court or
governmental body or agency into its affairs, which if instituted would have a
material adverse effect upon the Borrower's ability to perform its obligations
under its Operative Documents or a Subsidiary's ability to pay dividends to the
Borrower.
3.5 Governmental Approvals. The execution, delivery and performance by
the Borrower of the Operative Documents do not require the consent or approval
of, the giving of notice to, the registration with, or the taking of any other
action in respect of, any federal, state or other governmental authority or
agency other than as contemplated herein and therein.
3.6 Defaults Under Other Documents. Neither the Borrower nor any
Subsidiary is in default or in violation (nor has any event occurred which, with
notice or lapse of time or both, would constitute a default or violation) under
any document or any agreement or instrument to which it may be a party or under
which it or any of its properties may be bound, the result of which would have a
material adverse effect upon the Borrower's ability to perform its obligations
under its Operative Documents or a Subsidiary's ability to pay dividends to the
Borrower.
3.7 Judgments. There are no outstanding or unpaid judgments (which are
not adequately bonded) of the Borrower or any Subsidiary which would have a
material adverse effect upon the Borrower's ability to perform its obligations
under its Operative Documents or a Subsidiary's ability to pay dividends to the
Borrower.
3.8 Compliance with Laws. Neither the Borrower nor any Subsidiary is in
violation of any laws, regulations or judicial or governmental decrees in any
respect which would have any material adverse effect upon the validity or
enforceability of any of the terms of the Borrower's Operative Documents or
which would have a material adverse effect upon the Borrower's ability
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to perform its obligations under its Operative Documents or a Subsidiary's
ability to pay dividends to the Borrower.
3.9 Taxes. All tax returns of the Borrower and its Subsidiaries for
material taxes required to be filed have been filed or extensions permitted by
law have been obtained; all taxes of the Borrower and its Subsidiaries of a
material nature and which are due and payable as reflected on such returns have
been paid, other than taxes which are due but for which only a nominal late
payment penalty is payable and for which the taxing authority is not yet
entitled to enforce its remedies for payment thereof and other than taxes being
contested in good faith and with respect to which adequate reserves have been
established; and no material amounts of taxes of the Borrower and its
Subsidiaries not reflected on such returns are payable.
3.10 Collateral. The Borrower has good title to the Collateral and the
Collateral is free from all liens, encumbrances or security interests, except
for Permitted Liens and except as disclosed on Section 3.10 of Schedule A
attached hereto. The Borrower's principal place of business, chief executive
office, and the principal place where it keeps its records concerning the
Collateral is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
3.11 Pension Benefits. Neither the Borrower nor any Subsidiary maintains a
"Plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or each such entity is in compliance with the
minimum funding requirements with respect to any such "Plan" maintained by it to
the extent applicable, and it has not incurred any material liability to the
Pension Benefit Guaranty Corporation ("PBGC") or otherwise under ERISA in
connection with any such Plan.
3.12 Margin Regulations. No part of the proceeds of any Advance hereunder
shall be used for any purpose that violates, or which is inconsistent with, the
provisions of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System of the United States.
3.13 Financial Condition. The financial condition of the Borrower and its
Subsidiaries is fairly presented in the most recent financial statement which
has been provided to the Agent and such financial statement does not contain any
untrue statements of a material fact or omit to state any material fact
necessary to make the statement therein not misleading in light of the
circumstances under which it was made. No material adverse change has occurred
since the date of such financial statement.
IV. COVENANTS
The Borrower hereby covenants that:
4.1 Financial Reports.
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(a) Within thirty (30) days after the end of each month, the
Borrower, at its sole expense, shall furnish the Agent a consolidated
balance sheet, a statement of earnings of the Borrower and its
consolidated Subsidiaries, and a statement of cash flows of the Borrower
and its consolidated Subsidiaries, and such financial statements on a
consolidating basis as to the Borrower, all such financial statements to
be prepared in accordance with generally accepted accounting principles
consistently applied and certified as completed and correct, subject to
normal changes resulting from year-end audit adjustments, by the chief
financial officer of the Borrower.
(b) Within ninety (90) days after the close of the Borrower's
fiscal year, the Borrower, at its sole expense, shall furnish the Agent:
(i) a consolidated balance sheet, a statement of earnings of the Borrower
and its consolidated Subsidiaries and a statement of cash flows of the
Borrower and its consolidated Subsidiaries, certified by Deloitte & Touche
LLP, or other independent certified public accountants reasonably
acceptable to the Requisite Revolving Lenders, that such financial reports
fairly present the financial condition of the Borrower and its
consolidated Subsidiaries and have been prepared in accordance with
generally accepted accounting principles consistently applied; and (ii) a
certificate from such accountants certifying that in making the requisite
audit for certification of the Borrower's financial statements, the
auditors either (1) have obtained no knowledge, and are not otherwise
aware of, any condition or event which constitutes an Event of Default or
which with the passage of time or the giving of notice would constitute an
Event of Default under this Agreement; or (2) have discovered such
condition or event, as specifically set forth in such certificate, which
constitutes an Event of Default or which with the passage of time or the
giving of notice would constitute an Event of Default under such sections.
The auditors shall not be liable to the Revolving Lenders by reason of the
auditors' failure to obtain knowledge of such event or condition in the
ordinary course of their audit unless such failure is the result of
negligence or willful misconduct in the performance of the audit.
(c) Within thirty (30) days after submission to the Securities
and Exchange Commission, the Borrower shall provide to the Agent copies of
its Forms 10K and 10Q, as submitted to the Securities and Exchange
Commission during the term of this Agreement.
(d) Within thirty (30) days after the end of each month, the
Borrower shall provide to the Agent the FOCUS report of Advanced Clearing
for such month.
(e) Within thirty (30) days after the end of each quarter, the
Borrower, at its expense, shall furnish the Agent a certificate of the
chief financial officer of the Borrower in the form of Exhibit C, setting
forth such information (including detailed calculations) sufficient to
verify the conclusions of such officer after due inquiry and review, that:
14
(i) The Borrower and each Subsidiary, either (y) is in
compliance with the requirements set forth in this Agreement or (z)
is NOT in compliance with the foregoing for reasons specifically set
forth therein; and
(ii) The chief financial officer of the Borrower has reviewed or
caused to be reviewed all of the terms of the Operative Documents of
the Borrower and that such review either (y) has NOT disclosed the
existence of any condition or event which constitutes an event of
default or any condition or event which with the passage of time or
the giving of notice would constitute an event of default under the
Operative Documents or (z) has disclosed the existence of a
condition or event which constitutes an event of default, or a
condition or event which with the passage of time or the giving of
notice would constitute an event of default, under the aforesaid
instrument or instruments and the specific condition or event is
specifically set forth.
(f) The Borrower shall provide the Agent with such other financial
reports and statements as the Revolving Lenders may reasonably request.
4.2 Corporate Structure and Assets. The Borrower shall not merge or
consolidate with any other corporation or entity without the prior written
consent of the Requisite Revolving Lenders, except as provided below. The
Borrower shall not sell any assets, other than in the ordinary course of
business, in an aggregate amount greater than one million dollars ($1,000,000),
except (a) items that are obsolete or no longer necessary for operation of the
business, and (b) the Borrower's interest in Comprehensive Software Systems,
Ltd.; and the Borrower's interest in the NITE Stock (other than the Pledged NITE
Stock). The Revolving Lenders shall be entitled to receive as a prepayment on
the Notes the proceeds of any sale of assets of the Borrower which are
prohibited by the preceding sentence. Notwithstanding the foregoing prepayment
requirements, any such prohibited sale shall remain a violation of this
Agreement. The Base Revolving Credit Facility shall be reduced by fifty percent
(50%) of the proceeds after taxes of any sale of the Borrower's interest in the
NITE Stock (other than Pledged NITE Stock); provided, however, that except as
set forth in the following sentence, the amount of all such reductions shall not
exceed in the aggregate $25,000,000. In the event that the fair market value of
the Borrower's interest in the NITE Stock (other than Pledged NITE Stock) is
less than $100,000,000 after giving effect to any sale, the Base Revolving
Credit Facility shall be reduced by fifty percent (50%) of the proceeds after
taxes of such sale of the Borrower's interest in the NITE Stock (other than
Pledged NITE Stock); provided, however, that the Base Revolving Credit Facility
shall not be reduced below $50,000,000 as a result of this Section 4.2. Any
proceeds from the sale of the Borrower's interest in the NITE Stock (other than
Pledged NITE Stock) shall be either paid to the Lenders as a prepayment on the
Notes or shall be retained by the Borrower and shall be reinvested solely in
Permitted Investments or additional investments in Advanced Clearing. At all
times during the term of this Agreement, the Borrower shall keep its NITE Stock
free from all liens, pledges and other encumbrances (other than agreements to
sell such stock and other than the security interest granted under the Pledge
15
Agreement). In addition, the Borrower shall not engage in any business
materially different from that in which it is presently engaged and businesses
reasonably related thereto without the prior written consent of the Requisite
Revolving Lenders, which consent shall not be unreasonably withheld. The
foregoing restrictions on mergers and consolidations shall not apply if: (i) in
the case of a merger, the Borrower is the surviving entity and expressly
reaffirms its obligations hereunder; (ii) in the case of a consolidation, the
resulting corporation expressly assumes the obligations of the Borrower
hereunder; (iii) the surviving or resulting corporation is organized under the
laws of the United States or a jurisdiction thereof; (iv) after giving effect to
such merger or consolidation, the surviving or resulting corporation will be
engaged in substantially the same lines of business as are now engaged in by the
Borrower and its Subsidiaries and businesses reasonably related thereto; and (v)
immediately after giving effect to such merger or consolidation, no Event of
Default will exist hereunder.
4.3 Net Worth. The Borrower shall maintain a minimum Net Worth during the
term of this Agreement of at least the amounts set forth hereunder:
Period Minimum Net Worth
Prior to closing $105,000,000
On and after 12/31/00 $125,000,000
4.4 Indebtedness. The Borrower shall not have any Indebtedness other than
as incurred under this Agreement, and shall not at any time permit the sum of
its total Indebtedness to exceed the amounts shown below:
Period Maximum Indebtedness
Closing through 6/30/00 Three times the sum of (a)
$25,000,000, plus (or minus, if
negative) Annualized Modified
Cash Flow
After 6/30/00 $25,000,000, plus three times
Annualized Modified Cash Flow
, in each case as tested at the end of the immediately preceding quarter based
on the Annualized Modified Cash Flow for such quarter.
4.5 Use of Proceeds. No part of the proceeds of the Advances shall be
used for any purpose that violates, or which is inconsistent with, the
provisions of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System of the United States.
16
4.6 Notice of Default. The Borrower shall give to the Agent written
notification (promptly after the Borrower becomes aware thereof) of the
existence or occurrence of:
(a) any fact or event which results, or which with notice or the passage
of time, or both, would result in an Event of Default hereunder;
(b) any proceedings instituted by or against the Borrower or any
Subsidiary in any federal, state or local court or before any governmental body
or agency, or before any arbitration board, or any such proceedings threatened
against the Borrower or any Subsidiary by any governmental agency, or any change
in law or regulation applicable to the Borrower or one or more of its
Subsidiaries, which event alone or in the aggregate is, in the Borrower's
reasonable judgment, likely to have a material adverse effect upon the
Borrower's ability to perform its obligations under its Operative Documents;
(c) any default or event of default involving the payment of money under
any agreement or instrument which is material to the Borrower or any Subsidiary
to which such entity is a party or by which it or any of its property may be
bound, and which default or event of default would have a material adverse
effect upon the Borrower's ability to perform its obligations under its
Operative Documents;
(d) the commencement of any proceeding under the Federal Bankruptcy Code
or similar law affecting creditor's rights by or against the Borrower or any
Subsidiary; and
(e) pending or threatened litigation exists against the Borrower or any
Subsidiary with a prayer for damages in excess of $500,000 or for any other
relief which, if adversely determined, is likely to have an adverse effect upon
the Borrower's ability to perform its obligations under its Operative Documents.
4.7 Distributions.
(a) The Borrower shall not declare any dividends or make any cash
distribution in respect of any shares of its capital stock or warrants of its
capital stock, without the prior written consent of the Requisite Revolving
Lenders; provided, however, that the Borrower may declare stock dividends.
(b) The Borrower shall not purchase, redeem, or otherwise retire any
shares of its capital stock or warrants of its capital stock other than open
market purchases not to exceed 2% of outstanding shares in any year to have
stock available for compensation plans; provided, however, that the amount of
such purchases is not to exceed $3 million per year.
(c) Neither the Borrower nor any Subsidiary will enter into any agreements
limiting a Subsidiary's ability to make dividends to the Borrower which are more
17
restrictive than the net capital rule promulgated under Section 15(c) of
the Securities Exchange Act of 1934 in effect on October 28, 1997;
provided, however, that the granting of a security interest pursuant to a
Broker-Loan Pledge and Security Agreement in the ordinary conduct of
Advanced Clearing's business shall not in and of itself be deemed a
violation of this Subsection 4.7(c).
4.8 Compliance with Law and Regulations. The Borrower and each Subsidiary
shall comply in all material respects with all applicable federal and state laws
and regulations except when the failure to so comply would not have a material
adverse effect on the Borrower's business.
4.9 Maintenance of Property; Accounting; Corporate Form; Taxes; Insurance
(a) The Borrower and each Subsidiary shall maintain its property in
good condition in all material respects, ordinary wear and tear excepted.
(b) The Borrower and each Subsidiary shall keep true books of record
and accounts in which full and correct entries shall be made of all its
business transactions, all in accordance with generally accepted
accounting principles consistently applied.
(c) The Borrower and each Subsidiary shall do or cause to be done all
things necessary to preserve and keep in full force and effect its
corporate form of existence as is necessary for the continuation of its
business in substantially the same form, except where such failure to do
so with respect to any Subsidiary would not have a material adverse effect
on the ability of the Borrower to perform its obligations under the
Operative Documents.
(d) The Borrower and each Subsidiary shall pay all taxes, assessments
and governmental charges or levies imposed upon it or its property;
provided, however, that the Borrower or any Subsidiary shall not be
required to pay any of the foregoing taxes which are being diligently
contested in good faith by appropriate legal proceedings and with respect
to which adequate reserves have been established.
4.10 Inspection of Properties and Books. The Borrower shall recognize and
honor the right of the Revolving Lenders, upon reasonable advance notice to an
officer of the Borrower, to visit and inspect, during normal business hours, any
of the properties of, to examine the books, accounts, and other records of, and
to take extracts therefrom and to discuss the affairs, finances, loans and
accounts of, and to be advised as to the same by the officers of, the Borrower
at all such times, in such detail and through such agents and representatives as
the Revolving Lenders may reasonably desire.
4.11 Guaranties. Neither the Borrower nor any Subsidiary shall guaranty
or become responsible for the indebtedness of any other person or entity in
excess of an aggregate amount
18
outstanding at any time of $1,000,000, plus employee stock loans in an aggregate
amount outstanding at any time not to exceed $5,000,000.
4.12 Collateral. The Borrower shall not incur or permit to exist any
mortgage, pledge, lien, security interest or other encumbrance on the
Collateral, other than Permitted Liens and except as otherwise permitted in the
Security Agreement or the Pledge Agreement.
4.13 Name; Location. The Borrower shall give the Agent thirty (30) days
notice prior to changing its name, identity or corporate structure, moving its
principal place of business, chief executive office or the place where it keeps
its records concerning the Collateral.
4.14 Notice of Change in Ownership or Management. During the term of this
Agreement, the Borrower shall give the Revolving Lenders notice of the
occurrence of the following described event, which notice shall be given as soon
as the Borrower obtains notice or knowledge thereof:
(a) any change, directly or indirectly, in the existing controlling
interest in the Borrower.
4.15 Subordinated Debt. After the date of this Agreement, the Borrower
shall not, and shall not permit any Subsidiary to, incur any subordinated debt
or issue any preferred stock or warrants for preferred stock except upon the
prior written consent of the Requisite Revolving Lenders. The Borrower shall not
amend its articles of incorporation or any other documents or agreements
relating to the issuance of subordinated debt, preferred stock or warrants for
preferred stock without the prior written consent of the Requisite Revolving
Lenders.
4.16 Capital Expenditures. The Borrower shall not incur in any fiscal year
capital expenditures, determined in accordance with generally accepted
accounting principles, of more than $75,000,000; provided however that any
portion of such $75,000,000 which is not expended for capital expenditures may
be rolled over and added to the capital expenditures permitted for the next
fiscal year.
4.17 Acquisitions. The Borrower shall not, and shall not permit any
Subsidiaries to, acquire any stock or any equity interest in, or warrants
therefor or securities convertible into the same, or a substantial portion of
the assets of, or debentures of, or other investments in another entity without
the prior written consent of the Requisite Revolving Lenders; provided, however,
that (i) the Borrower shall be permitted to make in any twelve-month period such
acquisitions and investments in an amount not to exceed Five Million Dollars
($5,000,000) in the aggregate without the consent of the Requisite Revolving
Lenders; and (ii) the Borrower and each Subsidiary shall be permitted to make
investments in short term marketable securities in the normal course of its cash
management activities; and (iii) Advanced Clearing shall be permitted to hold
short term equity positions in the normal course of its securities clearing
business.
19
Notwithstanding the foregoing, the Borrower shall not be permitted to act as a
market maker or to conduct trading activities; and no Subsidiary shall be
permitted to conduct trading activities for its own account or to act as a
market maker.
4.18 Subsidiaries. The Borrower shall give prompt written notice to the
Revolving Lenders of the Borrower's intent to acquire, or the Borrower's
acquisition of, any Subsidiary. Prior to the creation or acquisition of such
Subsidiary, the Borrower shall cause a first security interest in the Borrower's
equity interest in such Subsidiary to be perfected in favor of FNB-O, as agent
for the Revolving Lenders.
4.19 Minimum Regulatory Net Capital. Advanced Clearing will have
Regulatory Net Capital at all times in compliance with law but in no event less
than 5% of aggregate debit items.
4.20 Minimum Core Retail Accounts. The Borrower will have at least the
number of Core Retail Accounts on the dates set forth below:
Date Minimum Core Retail Accounts
Prior to 12/31/99 400,000
12/31/99 to 12/30/00 500,000
12/31/00 600,000
& after
4.21 Taxes. The Borrower shall, and shall cause its Subsidiaries to, pay
all taxes imposed upon them before any penalties or interest accrue thereon;
provided, however, that no such taxes need be paid for so long as they are being
diligently contested in good faith by appropriate proceeding and with respect to
which adequate reserves in accordance with GAAP have been established.
4.22 ERISA. The Borrower shall not, and shall not permit any of its
Subsidiaries to:
(a) (i) engage in any transaction in connection with which the
Borrower or any Subsidiary could be subject to either a criminal or civil
penalty under section 501 or 502(i) of ERISA or a tax imposed by section
4975 of the Internal Revenue Code of 1986 as amended from time to time,
(ii) fail to make full payment when due of all amounts which would be
deductible by the Borrower or a Subsidiary and which, under the provisions
of any Plan, applicable law or applicable collective bargaining agreement,
the Borrower or any Subsidiary is required to pay as contributions
thereto, or (iii) permit to exist any accumulated funding deficiency,
whether or not waived, with respect to any Plan, if, in the case of any of
subdivision (i), (ii) or (iii) above, such penalty or tax, or the failure
to make such payment, or the existence of such deficiency, as the case may
be, could have a material adverse effect on (a) the Borrower's or its
Subsidiaries' abilities to
20
conduct their business, (b) a Subsidiary's ability to pay dividends to
the Borrower, or (c) the Borrower's ability to perform its obligations
under the Operative Documents; or
(b) permit the aggregate complete or partial withdrawal liability
under Title IV of ERISA which is due and unpaid with respect to all
Multiemployer Plans incurred by the Borrower or one or more of its
Subsidiaries to exceed $500,000.
4.23 Expenses. The Borrower shall, immediately upon demand by the Agent,
reimburse the Agent for all reasonable and documented costs and expenses,
including reasonable and documented fees and expenses of counsel to the Agent,
incurred by the Agent in connection with the negotiation and documentation of
this Agreement, and in connection with the transaction contemplated by the
Operative Documents after the closing, including without limitation, any waiver,
amendment or enforcement thereof. After the occurrence of an Event of Default,
the Borrower shall, immediately upon demand, reimburse each Revolving Lender for
all reasonable and documented costs and expenses, including reasonable and
documented fees and expenses of counsel to such Revolving Lender, incurred by
such Revolving Lender in connection with enforcing such Revolving Lender's
rights under the Operative Documents.
4.24 Cumulative Pre-Tax Earnings (Losses). The Borrower shall not incur
net income prior to taxes less than (or net losses prior to taxes more than) the
amounts shown below, such income (or losses) to be calculated on a cumulative
basis during the Borrower's fiscal year as indicated:
Fiscal Year Ending Fiscal Quarter Ending Net Income (or Loss) Before Taxes
-------------------------------------------------------------------------------
9/30/00 12/31/99 ($80,000,000)
3/31/00 ($115,000,000)
6/30/00 ($75,000,000)
9/30/00 ($60,000,000)
9/30/01 12/31/00 ($35,000,000)
3/31/01 ($20,000,000)
6/30/01 $10,000,000
9/30/01 $40,000,000
, in each case as tested at the end of each fiscal quarter.
V. CONDITIONS PRECEDENT
5.1 Closing Conditions. Any and all obligations of the Revolving Lenders
to make their initial Advances hereunder are subject to satisfaction of the
following conditions precedent:
21
(a) FNB-O, as agent, shall have received an opinion of counsel to the
Borrower covering such matters as the Revolving Lenders may request
(including, without limitation, corporate existence and good standing,
corporate authority, due authorization, execution and delivery of the
Operative Documents, the legal, valid, binding and enforceable nature of
the Operative Documents, and the perfection and priority of the security
interest in the Collateral granted to the Revolving Lenders), such
opinion to be satisfactory in form and substance to counsel to FNB-O;
(b) FNB-O, as agent, shall have received such certificates and
documents as the Revolving Lenders may reasonably request from the
Borrower, including articles of incorporation and bylaws, certificates
regarding good standing, incumbency, copies of other corporate documents,
and appropriate authorizing resolutions;
(c) the Operative Documents shall have been duly authorized
and executed and shall be in full force and effect, and such UCC financing
statements shall have been executed and filed in such offices as may be
appropriate to perfect the security interest of FNB-O, as agent for the
Revolving Lenders, in the Collateral;
(d) the Borrower shall have delivered to FNB-O as agent the
certificates covered by the Pledge Agreement and the applicable stock
powers endorsed in blank, or, at the option of FNB-O, evidence of the
recording of the interest of FNB-O as agent in book entry form; and
(e) the Borrower shall have paid the reasonable and documented fees
and expenses of counsel to the Agent in connection with the preparation,
negotiation and execution of the Operative Documents. DEFAULTS AND
REMEDIES
6.1 Events of Default. Any of the following shall be deemed an event
of default under this Agreement (an "Event of Default"):
(a) Any payment of principal required by any of the Operative
Documents shall not be paid within three (3) Business Days after the date
on which such payment was invoiced or due.
(b) Any payment of interest or other fees due hereunder or under any
of the Operative Documents shall not be paid within three (3) Business
Days after the date on which such payment was invoiced or due.
(c) Any representation or warranty of the Borrower under any of the
Operative Documents, or any financial reports or statements or
certificates submitted pursuant to this Agreement, shall prove to have
been false in any material respect when made.
22
(d) A failure of the Borrower or any Subsidiary to comply with
any requirement or restriction applicable to such entity and contained in
Sections 4.2, 4.3, 4.4, 4.5, 4.7, 4.11, 4.12, 4.15, 4.16, 4.17, 4.19,
4.20, 4.21, 4.22 or 4.24 of this Agreement.
(e) A failure of the Borrower or any Subsidiary to comply with any
requirement or restriction contained in any provision of the Operative
Documents not otherwise specified in this Article VI, which failure
remains unremedied for thirty (30) days following knowledge or receipt of
notice as to such failure from any source.
(f) The occurrence of a default or a breach of any of the obligations
of the Borrower or any Subsidiary (other than obligations of such
Subsidiary to the Borrower) under any note, loan agreement, preferred
stock, subordinated debt instrument or agreement (including the
Subordinated Debt), or any other agreement evidencing an obligation to
repay borrowed money when the aggregate amount of indebtedness thereby
affected (1) exceeds $500,000 or (2) if such default or breach has been
declared, such loan agreement, preferred stock, subordinated debt
instrument or agreement, exceeds $100,000.
(g) The entry of a final judgment that exceeds $500,000
against the Borrower or any Subsidiary for the payment of money, which
is not covered by insurance, and the expiration of thirty (30) days
from the date of such entry during which the judgment is not discharged
in full or stayed.
(h) The occurrence of any one or more of the following:
(1) The Borrower or any Subsidiary shall file a
voluntary petition in bankruptcy or an order for relief shall
be entered in a bankruptcy case as to such entity or shall
file any petition or answer seeking or acquiescing in any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under
any present or future federal, state or other statute, law or
regulation relating to bankruptcy, insolvency or other relief
for debtors; or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of such
entity or of all or any part of its property, or of any or all
of the royalties, revenues, rents, issues or profits thereof,
or shall make any general assignment for the benefit of
creditors, or shall admit in writing its inability to pay its
debts or shall generally not pay its debts as they become due;
or
(2) A court of competent jurisdiction shall enter an
order, judgment or decree approving a petition filed against
the Borrower or any Subsidiary seeking any reorganization,
dissolution or similar relief under any present or future
federal, state or other statute, law or regulation relating to
bankruptcy, insolvency or other relief for debtors, and such
order, judgment or decree shall remain unvacated and unstayed
for an aggregate of sixty (60) days (whether or not
23
consecutive) from the first date of entry thereof; or any
trustee, receiver or liquidator of the Borrower or any
Subsidiary or of all or any part of its property, or of any or
all of the royalties, revenues, rents, issues or profits
thereof, shall be appointed without the consent or
acquiescence of such entity and such appointments shall remain
unvacated and unstayed for an aggregate of sixty (60) days
(whether or not consecutive); or
(3) A writ of execution or attachment or any similar
process shall be issued or levied against all or any part of
or interest in the Collateral, or any judgment involving
monetary damages shall be entered against the Borrower or any
Subsidiary which shall become a lien on the Collateral or any
portion thereof or interest therein and such execution,
attachment or similar process or judgment is not released,
bonded, satisfied, vacated or stayed within thirty (30) days
after its entry or levy.
(i) A Change of Control shall occur.
(j) Any adverse regulatory action has been taken against the
Borrower or one or more of its Subsidiaries which will materially
adversely affect (a) the Borrower's or its Subsidiaries' abilities to
conduct their business, (b) a Subsidiary's ability to pay dividends to
the Borrower, or (c) the Borrower's ability to perform its obligations
under this Agreement or any of the Operative Documents.
(k) Any litigation has been filed against the Borrower or one
or more of its Subsidiaries which, if determined adversely, will
materially adversely affect (a) the Borrower's or its Subsidiaries'
abilities to conduct their business, (b) a Subsidiary's ability to pay
dividends to the Borrower, or (c) the Borrower's ability to perform its
obligations under this Agreement or any of the Operative Documents.
(l) At any time after September 30, 1999, the computer systems
of the Borrower shall be unable to perform date-sensitive functions
involving dates after December 31, 1999 and such inability has a
material adverse effect on the ability of the Borrower to carry out its
business.
6.2 Remedies. If an Event of Default occurs and is continuing, upon
the election of the Revolving Lenders holding two-thirds of the then outstanding
aggregate total Indebtedness of the Borrower to the Revolving Lenders, the
entire unpaid principal amount under the Notes, together with interest accrued
thereon, shall become immediately due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived, the
Commitments of the Revolving Lenders hereunder shall terminate, and the
Revolving Lenders may exercise their rights under the other Operative Documents
or the Notes, including, without limitation, under the Security Agreement and
the Pledge Agreement. Upon the occurrence of an Event of Default described in
Section 6.1(h)(1) or (2) hereof, acceleration under this Section 6.2
24
shall occur automatically without the election, declaration, notice or other act
on the part of any of the Revolving Lenders. In addition, the Revolving Lenders
shall have such other remedies as are available at law and in equity. Remedies
under this Agreement, the Operative Documents, and the Notes are cumulative. Any
waiver must be in writing by the Revolving Lenders and no waiver shall
constitute a waiver as to any other occurrence which constitutes an Event of
Default or as to any party not specifically included in such written waiver.
VII. INTER-CREDITOR AGREEMENTS
7.1 FNB-O as Servicer. FNB-O will act as sole servicer of the loans
evidenced by the Notes. For purposes of this Article VII, the term Event of
Default means any Event of Default hereunder. FNB-O will enforce, administer and
otherwise deal with the loans made by the Revolving Lenders in accordance with
safe and prudent banking standards employed by FNB-O in the case of the loan
made by FNB-O. Without limiting the generality of the foregoing, FNB-O will, on
its own behalf and on behalf of the Revolving Lenders: (i) maintain originals of
the Operative Documents (excluding the Notes); (ii) receive requests for
Advances from the Borrower, promptly transmit the same to the Revolving Lenders
and make such Advances on behalf of the Revolving Lenders (provided that FNB-O
is assured of reimbursement therefor by the other Revolving Lenders for their
pro rata shares); (iii) receive payments and prepayments from the Borrower and
apply such payments as provided in Section 7.2; (iv) receive notices from the
Borrower and send copies thereof to the Revolving Lenders if FNB-O has
reasonable cause to believe that such Revolving Lenders have not received such
notice from another source; and (v) advise the Revolving Lenders of the
occurrence of any Event of Default which FNB-O obtains actual knowledge of. The
Revolving Lenders agree not to attempt to take any action against the Borrower
under the Operative Documents or the Notes, or with respect to the indebtedness
evidenced thereby without FNB-O's consent unless holders of two-thirds of the
then outstanding aggregate total Indebtedness of the Borrower to the Revolving
Lenders (including under the Notes and any similar indebtedness) shall have
requested FNB-O to take specific action against the Borrower and FNB-O shall
have failed to do so within a reasonable period after receipt of such request.
All actions, consents, waivers and approvals by the Revolving Lenders shall be
deemed taken or given and amendments hereto deemed agreed to if the holders of
more than two-thirds of the outstanding aggregate total Indebtedness of the
Borrower to the Revolving Lenders shall have indicated their consent thereto.
Notwithstanding the foregoing, unanimous approval of the applicable Revolving
Lenders under the respective Notes shall be required for: (i) any reduction or
compromise of the principal loan amount of such Notes, the amount or rate of
interest accrued or accruing thereon or the fees due hereunder; and (ii)
extension of the date of any scheduled payment; and unanimous consent of all the
Revolving Lenders shall be required for (iii) permitting the sale of or
releasing the security interest of the Revolving Lenders in (x) any stock held
in Subsidiaries or (y) other Collateral which comprises more than ten percent
(10%) of net book value of fixed assets of the Borrower; and (iv) any amendment
of Sections 7.1 or 7.2 hereof. A Revolving Lender's commitment hereunder may not
be increased without the consent of such Revolving Lender, it being understood,
however, that increases in the total
25
revolving credit facility hereunder may be made with the consent of the holders
of more than two-thirds of the outstanding aggregate total outstanding
obligation of the Borrower to the Revolving Lenders, so long as such increase
does not result in the increase of any non-consenting Revolving Lender's
commitment hereunder.
7.2 Application of Payments. Until the earlier of the occurrence of an
Event of Default, payments or prepayments made by the Borrower may be applied to
the indebtedness designated by the Borrower or otherwise applied as follows:
(a) first, to pay interest to date on the Notes and fees due to the
Revolving Lenders;
(b) second, pro rata to the Revolving Lenders, such pro rata share to
be determined as set forth below in subsection (bb) of this Section 7.2.
After the occurrence of an Event of Default, payments or prepayments on the
Notes received by FNB-O or any of the Revolving Lenders and funds realized upon
the disposition of any of the Collateral shall be applied as follows:
(aa) first, to reimburse FNB-O for any reasonable and documented
costs, expenses, and disbursements (including reasonable and documented
attorneys' fees) which may be incurred or made by FNB-O: (i) in connection
with its servicing obligations; (ii) in the process of collecting such
payments or funds; or (iii) as advances made by FNB-O to protect the
Collateral (provided, however, that FNB-O shall have no obligation to make
such protective advances); and
(bb) second, pari passu among the Revolving Lenders, based on
their respective pro rata shares of the funds to be applied. Each
Revolving Lender's pro rata share shall be equal to a fraction, (x) the
numerator of which shall be the total principal loan amount then
outstanding which is owing to each such Revolving Lender under its
Notes, and (y) the denominator of which shall be the total Principal
Loan Amount then outstanding which is owing to the Revolving Lenders
under all Notes.
Except as specifically provided in this Section 7.2, FNB-O shall have no
obligation to repay or prepay any amount due from the Borrower to any of the
other Revolving Lenders nor shall FNB-O have any obligation to purchase all or a
part of any Note hereunder or any Advance made by any Revolving Lenders, nor
shall the Revolving Lenders have any recourse whatsoever against FNB-O with
respect to any failure of the Borrower to repay the indebtedness referenced
herein.
26
7.3 Liability of FNB-O. FNB-O shall not be liable to the Revolving
Lenders for any error of judgment or for any action taken or omitted to be taken
by it hereunder, except for gross negligence or willful misconduct. Without
limiting the generality of the foregoing, FNB-O, except as expressly set forth
herein, (a) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (b) makes no representation or warranty with
respect to, and shall not be responsible for, the accuracy, completeness,
execution, legality, validity, legal effect or enforceability of this Revolving
Credit Agreement, the Notes, or the other Operative Documents, or the value or
sufficiency of any Collateral given by the Borrower or the priority of the
Revolving Lenders' security interest therein or the financial condition of the
Borrower; and (c) shall not be responsible for the performance or observance of
any of the terms, covenants or conditions of the Operative Documents on the part
of the Borrower and shall not have any duty to inspect the property (including,
without limitation, the books and records) of the Borrower.
7.4 Transfers. No Revolving Lender shall subdivide or transfer its
respective Notes (except to a Federal Reserve Bank) without first giving ten
(10) days prior written notice to and obtaining the prior written consent (which
consent shall not be unreasonably withheld) of FNB-O and the Borrower. No
Revolving Lender may grant a participation in any Advance hereunder without the
prior written consent of FNB-O (which consent shall not be unreasonably
withheld).
7.5 Reliance. The Revolving Lenders acknowledge that they have been
advised that none of the Notes nor any interest therein or related thereto has
been (i) registered under the Securities Act of 1933, as amended, nor (ii)
insured by the Federal Deposit Insurance Corporation. The Revolving Lenders
acknowledge that they have received from the Borrower all financial information
and other data relevant to their decision to extend credit to the Borrower and
that they have independently approved the credit quality of the Borrower.
7.6 Relationship of Lenders. The Revolving Lenders intend for the
relationships created by this Agreement to be construed as concurrent direct
loans from each Revolving Lender respectively to the Borrower. Nothing herein
shall be construed as a loan from any Revolving Lender to FNB-O or as creating a
partnership or joint venture relationship among them.
7.7 New Revolving Lenders. In the event that new Revolving Lenders are
added to this Agreement, such Revolving Lenders shall be required to agree to
the inter-creditor provisions of this Article VII.
7.8 Agenting Fee. The Borrower will pay to FNB-O an annual agenting fee
equal to $37,500, payable quarterly on or before the last day of quarter in
equal installments of $9,375.
27
VIII. REIMBURSEMENTS; INDEMNIFICATION
8.1 Capital Adequacy. If, after the date hereof, the adoption or
implementation of any applicable law, rule or regulation regarding capital
adequacy (including, without limitation, any law, rule or regulation
implementing the Basle Accord), or any change therein, or any change in the
interpretation or administration thereof by any central bank or other
governmental authority charged with the interpretation or administration
thereof, or compliance by a Revolving Lender (or its parent) with any guideline,
request or directive regarding capital adequacy (whether or not having the force
of law) of any such central bank or other governmental authority (including,
without limitation, any guideline or other requirement implementing the Basle
Accord), has or would have the effect of reducing the rate of return on such
Revolving Lender's capital as a consequence of its obligations hereunder or the
transactions contemplated hereby to a level below that which such Revolving
Lender could have achieved but for such adoption, implementation, change or
compliance (taking into consideration such Revolving Lender's policies with
respect to capital adequacy) by an amount deemed by such Revolving Lender to be
material, then such Revolving Lender shall provide to the Borrower notice of
such matter, and from time to time thereafter within ten (10) Business Days
after demand by such Revolving Lender, the Borrower shall pay to such Revolving
Lender such additional amount or amounts as will compensate such Revolving
Lender for such reduction which is incurred by such Revolving Lender after the
date of such Revolving Lender's notice to the Borrower under this Section 8.1.
Notwithstanding the preceding sentence, upon Borrower's receipt of such notice
from such Revolving Lender, Borrower may provide to such Revolving Lender its
notice of prepayment in accordance with Section 2.5 hereof. A certificate of
such Revolving Lender claiming compensation under this Section and setting forth
the additional amount or amounts to be paid to it hereunder shall be conclusive,
provided that the determination thereof is made on a reasonable basis. In
determining such amount or amounts, such Revolving Lender may use any reasonable
averaging and attribution methods. Upon receipt of a notice from a Revolving
Lender under this section, the Borrower, upon ten (10) days prior written notice
to the Agent, may replace such Revolving Lender with a new Revolving Lender that
would not require a payment under this section, which replacement Revolving
Lender shall purchase the rights and assume the obligations of the replaced
Revolving Lender under this Agreement and the other Operative Documents for a
price equal to the outstanding principal and accrued but unpaid interest on the
Note issued to such replaced Revolving Lender, plus the amount of other fees
(including without limitation the commitment fee payable in accordance with
Section 2.2 (a) of this Agreement), such fees to be pro rated through the
purchase and assumption date; provided, however, that such replacement Revolving
Lender must be acceptable to the Agent.
8.2 General Indemnity. The Borrower shall indemnify each Revolving Lender
and its directors, officers, employees and agents from and against any and all
losses, claims, liabilities, damages, reasonable and documented attorneys' fees
and disbursements, and other reasonable and documented costs and expenses which
the indemnified party may at any time sustain or incur in connection with the
Borrower's use of loan proceeds; provided that the indemnified party shall not
have any right to be indemnified for its own gross negligence or willful
misconduct. All indemnities and all provisions relative to reimbursement to the
Revolving Lenders of amounts sufficient to compensate the Revolving Lenders for
changes in
28
capital adequacy requirements, including, but not limited to, Section 8.1
hereof, shall survive the termination of this Agreement and the payment of the
Notes.
IX. MISCELLANEOUS
9.1 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and, except
as specified by Section 7.1, may not be effectively amended, changed, modified
or altered, except in writing executed by the Borrower and the Requisite
Revolving Lenders.
9.2 Governing Law. The Operative Documents shall be governed by and
construed pursuant to the laws of the State of Nebraska.
9.3 Notices. Until changed by written notice from one party hereto to the
other, all communications under the Operative Documents shall be in writing and
shall be hand delivered or mailed by registered mail to the parties, and shall
be deemed given when mailed, as follows:
If to the Borrower:
AMERITRADE HOLDING CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
If to the Agent:
FIRST NATIONAL BANK OF OMAHA
One First National Center
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Revolving Lenders, at their respective addresses herein.
9.4 Headings. The captions and headings herein are for convenience only
and in no way define or limit the scope or intent of any provisions or sections
of this Agreement.
9.5 Counterparts. This Agreement may be executed in several counterparts
and such counterparts together shall constitute one and the same instrument.
9.6 Survival; Successors and Assigns . The covenants, agreements,
representations and warranties made herein, and in the certificates delivered
pursuant hereto, shall survive the
29
execution and delivery to the Revolving Lenders of this Agreement and shall
continue in full force and effect so long as any Note or any obligation to the
Revolving Lenders under any of the Operative Documents (other than contingent
obligations that, by their terms, survive the termination hereof) is outstanding
and unpaid or any Commitment remains in effect. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party, and all covenants, promises and
agreements by or on behalf of the Borrower which are contained in this Agreement
shall bind the successors and assigns of the Borrower and shall inure to the
benefit of the successors and assigns of the Revolving Lenders.
9.7 Severability. If any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
9.8 Assignment. The Borrower may not assign its rights or obligations
hereunder and any assignment in contravention of the terms hereof shall be void.
9.9 Consent to Form of Pledge Agreement and Security Agreement. The
parties hereto expressly approve the form of the Pledge Agreement and the
Security Agreement.
IN WITNESS WHEREOF, the Borrower and the Revolving Lenders have caused
this Revolving Credit Agreement to be executed by their duly authorized
corporate officers as of the day and year first above written.
AMERITRADE HOLDING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: Co-Chief Executive Officer
FIRST NATIONAL BANK OF OMAHA
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: Vice President
30
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
/s/ TKL
---------
Borrower
31
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: Vice President
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
/s/ TKL
---------
Borrower
32
MERCANTILE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: Vice President
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
/s/ TKL
---------
Borrower
33
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Title: Vice President
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
/s/ TKL
---------
Borrower
34
EXHIBIT A
TO REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
LASALLE BANK NATIONAL ASSOCIATION, AND
MERCANTILE BANK NATIONAL ASSOCIATION
FORM OF NOTES
35
) SECURED BUSINESS PROMISSORY NOTE
Omaha, Nebraska $
January ___, 2000 December 31, 2001
(Note Date) (Maturity Date)
On or before December 31, 2001, AMERITRADE HOLDING CORPORATION ("Maker")
promises to pay to the order of [REVOLVING LENDER] ("Lender") the principal sum
hereof, which shall be the lesser of ___________ Dollars, or so much thereof as
may have been advanced by Lender pursuant to the Amended and Restated Revolving
Credit Agreement dated as of January 25, 2000, as amended from time to time (the
"Agreement") among Maker, Lender, First National Bank of Omaha ("Agent"), and
the other Revolving Lenders from time to time party thereto (collectively, the
"Lenders"). All capitalized terms not defined herein shall have their respective
meanings as set forth in the Agreement.
Interest shall accrue on the principal sum hereof outstanding from time to
time at a floating per annum interest rate (the "Revolving Credit Rate") equal
to the greater of (a) the rate published from time to time as the "Prime Rate"
(the base rate on corporate loans posted by at least 75% of the nation's 30
largest banks) in the Midwest Edition of the Wall Street Journal on the first
business day of the month (or, if no such rate is published on such date, on the
last preceding date when such rate was published), minus 3/4 of 1%; or (b) the
rate published from time to time as the "90-day LIBOR rate" in the Midwest
Edition of the Wall Street Journal on the first business day of the month (or if
no such rate is published on such date, on the last preceding date when such
rate was published), plus 1.50% . Interest shall accrue from and after the date
of advance to the date of repayment and shall be calculated based on a year of
360 days, and actual days elapsed. Such rate shall fluctuate monthly based on
changes in such rates on the first business date of each month. Notwithstanding
anything to the contrary elsewhere herein, after an Event of Default has
occurred interest shall accrue on the entire outstanding balance of principal
and interest on all indebtedness hereunder at a fluctuating rate equal to the
Default Rate. Interest shall be due no later than the tenth day of each month.
On or prior to the end of each calendar quarter, Maker shall repay the
amount, if any, outstanding on the Revolving Credit Note which in the aggregate
exceeds the amount of the Base Revolving Credit Facility to be in place on the
next succeeding Business Day following such calendar quarter. The balance, if
any, shall be due on the Maturity Date stated above.
All obligations of Maker under this Note shall be payable in immediately
available funds in lawful money of the United States of America at the principal
office of Agent in Omaha, Nebraska or at such other address as may be designated
by Agent in writing. In the event that a
36
payment day is not a Business Day, the payment shall be due on the next
succeeding Business Day.
Maker may at any time prepay the Principal Loan Amount outstanding under
this Note if Maker has given Agent and Lender at least one (1) Business Day's
prior written notice of its intention to make such prepayment. Any such
prepayment may be made without penalty.
All obligations of Maker hereunder shall be secured by a first security
interest in the Collateral, as more specifically described in the Security
Agreement and the Pledge Agreement.
GENERAL TERMS
Maker's liability for any amounts owed under this Note and the other
Operative Documents (the "Obligations") shall not be affected by any of the
following:
Acceptance or retention by Lender or Agent of other property or
interests as security for the Obligations, or for the liability of any
person other than a Maker with respect to the Obligations;
The release of all or any of the Collateral or other security for
any of the Obligations to any Maker;
Any release, extension, renewal, modification or compromise of any
of the Obligations or the liability of any obligor thereon; or
Failure by Lender or Agent to resort to other security or any person
liable for any of the Obligations before resorting to the Collateral.
Neither Lender nor Agent is required to take any action whatsoever in
respect of the Collateral. Impairment or destruction of the Collateral shall not
release Maker of its liability hereunder.
Upon the failure of Maker to make any payment of principal or interest
when due hereunder or the occurrence of any Event of Default, all of the
Obligations shall, at the option of Agent and without notice or demand, mature
and become immediately due and payable; and Agent shall have all rights and
remedies for default provided by the Uniform Commercial Code, any other
applicable law and/or the Operative Documents.
All costs and expenses incurred by Lender or Agent in enforcing its rights
under this Note or any mortgage, endorsement, surety agreement, guaranty
relating thereto are the obligation of Maker and are immediately due and
payable. Interest shall accrue on such costs and expenses from the date of
incurrence at the rate specified herein for delinquent Note payments. Each
37
Maker, endorser, surety and guarantor hereby waives presentment, protest,
demand, notice of dishonor, and the defense of any statute of limitations.
Without affecting the liability of any Maker, endorser, surety or
guarantor, the holder or Agent may, without notice, renew or extend the time for
payment, accept partial payments, release or impair any Collateral or other
security for the payment of this Note or agree to ▇▇▇ any party liable on it.
Neither Lender nor Agent shall be deemed to have waived any of its rights
upon or under this Note, or under any mortgage, endorsement, surety agreement or
guaranty, unless such waivers be in writing and signed by Lender or Agent, as
the case may be. No delay or omission on the part of Lender or Agent in
exercising any right shall operate as a waiver of such right or any other right.
A waiver on any one occasion shall not be construed as a bar to or waiver of any
right on any future occasion. All rights and remedies of Lender or Agent on
liabilities or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly or
concurrently.
Maker, if more than one, shall be jointly and severally liable hereunder
and all provisions hereof regarding the liabilities or security of Maker shall
apply to any liability or any security of any or all of them. This Note shall be
binding upon the heirs, executors, administrators, assigns or successors of
Maker; shall constitute a continuing agreement, applying to all future as well
as existing transactions, whether or not of the character contemplated at the
date of this Note, and if all transactions between Lender and Maker shall be at
any time closed, shall be equally applicable to any new transactions thereafter,
provided that Lender's interest in the Collateral shall be limited to the extent
provided in the Security Agreement and the Pledge Agreement; shall benefit
Lender, its successors and assigns; and shall so continue in force
notwithstanding any change in any partnership party hereto, whether such change
occurs through death, retirement or otherwise.
All obligations of Maker hereunder shall be payable in immediately
available funds in lawful money of the United States of America at the principal
office of the Agent.
This Note shall be construed according to the laws of the State of
Nebraska.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Any provision of this Note which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
38
[This Note is given in substitution of that certain Secured Business
Promissory Note dated May 24, 1999, given by Maker to Lender, in the principal
amount of $_______________.]
Executed as of this day of , 2000.
------------ ----------------------
AMERITRADE HOLDING CORPORATION
By:
Title:
39
PROMISSORY NOTE SCHEDULE
Loan Advances and Payments of Principal
AMERITRADE HOLDING CORPORATION
REVOLVING NOTE ADVANCES AND PAYMENTS:
Amount of Unpaid
Amount Principal Paid Amount of Principal Notation
Date of Advance or Prepaid Interest Paid Balance Made By
---- ---------- -------------- ------------- --------- --------
