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EXHIBIT 10.20
FIRST AMENDMENT TO
REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
LASALLE NATIONAL BANK AND
MERCANTILE BANK OF ST. LOUIS, N.A.
MAY 24, 1999
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FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT to REVOLVING CREDIT AGREEMENT (the "First Amendment")
entered into as of this 24th day of May, 1999, is intended to amend the terms of
the Revolving Credit Agreement (the "Agreement") dated as of the 16th day of
January, 1998, 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"); ▇▇▇▇▇▇ TRUST AND SAVINGS
BANK, an Illinois banking corporation having its principal place of business at
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇"); LASALLE BANK, N.A.
(formerly LASALLE NATIONAL BANK), a national banking association located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("LaSalle"); and MERCANTILE
BANK OF ST. LOUIS, N.A., a national banking association having its principal
place of business at One Mercantile Center, 7th and Washington TRAM ▇▇-▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Mercantile"). All terms and conditions of the Agreement
shall remain in full force and effort except as expressly amended herein. All
capitalized terms herein shall have the meaning prescribed in the Agreement.
This Agreement shall be amended as follows:
1. The following definition is added to Article I of the Agreement:
Permitted Investments: Any one or more of the following:
(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
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bank having capital and surplus of not less
than $50,000,000
The definition of "AmeriTrade Clearing" shall now refer to Advance
Clearing, Inc., the new name for AmeriTrade Clearing. Either "AmeriTrade
Clearing" or "Advance Clearing" shall refer to this entity. Any reference
to "LaSalle National Bank" shall mean "LaSalle Bank, N.A."
2. Section 2.1 of the Agreement is hereby amended to read as follows:
2.1 Revolving Credit Until December 31, 2000, 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 FNB-O, $24,000,000 (32%); (ii) as to
▇▇▇▇▇▇ Trust and Savings Bank, $18,000,000 (24%); (iii) as to
Mercantile Bank of St. Louis N.A., $18,000,000 (24%); (iv) as to
LaSalle Bank, N.A.$ 15,000,000 (20%); provided however that each
Revolving Lender's Commitment is several and not joint or joint and
several. The Base Revolving Credit Facility shall be as follows:
Closing until June 30, 2000 $75,000,000
July 1, 2000 - September 30, 2000 $71,875,000
October 1, 2000 - December 31, 2000 $68,750,000
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)
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
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Borrower's obligation to make payments of principal and interest on
the foregoing revolving credit indebtedness shall be further evidenced
by the Notes.
3. III. REPRESENTATIONS AND WARRANTIES of the Agreement is amended to
include Section 3.14 as follows:
3.14 Year 2000 Compliance. The Borrower has completed its Year 2000
inventory, and where indicated by such inventory, has upgraded (or by
September 30, 1999, will have completed its upgrading of) all its
computer hardware and software systems, so that the effect of the
arrival of January 1, 2000, on the Borrower's computer systems will
not create a material adverse effect upon the conduct of its business.
4. Section 4.2 of the Agreement is hereby amended to read as follows:
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 Knight/Trimark
Group, Inc. 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. Any
proceeds from the Sale of Knight/Trimark Group, Inc. 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 Advance Clearing. At all
times during the term of this Agreement, the Borrower shall keep its
stock of Knight/Trimark free from all liens, pledges and other
encumbrances (other than agreements to sell such stock). 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
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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.
5. Section 4.3 of the Agreement is hereby amended to read as follows:
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 12/31/99 $85,000,000
After 12/31/99
but on or prior to 12/31/2000 $105,000,000
6. Section 4.16 of the Agreement is hereby amended to read as follows:
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 $50,000,000; provided
however that any portion of such $50,000,000 which is not expanded for
capital expenditures may be rolled over and added to the capital
expenditures permitted for the next fiscal year.
7. The fiscal year acquisition and investment amount referenced at (i) of
Section 4.17 of the Agreement is hereby increased from Two Million
Five Hundred Thousand Dollars ($2,500,000) to Five Million Dollars
($5,000,000).
8. Section 4.20 of the Agreement is hereby amended to read as follows:
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 12/31/99 290,000
12/31/99 375,000
& after
9. The following is added as Section 4.24 of the Agreement:
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Section 4.24 Stock Offerings If the Borrower shall receive Net Cash
Proceeds from any public offering of common stock of the Borrower in
an amount in excess of $50,000,000 (a "Qualified Public Offering"),
the Borrower shall repay the amount, if any, outstanding on the Notes
in an amount equal to 100% of such Net Cash Proceeds of such Qualified
Public Offering (provided that the Base Revolving Credit Facility
shall not be reduced or terminated by such offering or such payment).
When used in this section, "Net Cash Proceeds" means, with respect to
any issuance of common stock, the aggregate cash, proceeds received by
the Borrower pursuant to such issuance, net of the costs relating to
such issuance (including, without limitation, sales and underwriter's
commissions and legal, accounting, printing and investment banking
fees).
10. Section 7.8 is hereby amended to read as follows:
Section 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 such quarter in equal installments of $9,375.
11. VI. DEFAULTS AND REMEDIES of this Agreement is amended to include
Section 6.1(1) as follows:
6.1 (1) 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.
12. Exhibits A, B and C to the Agreement are hereby amended and replaced
as shown in Exhibits A, B and C to this Agreement.
13. On the date of this First Amendment, the Borrower shall execute and
deliver to the Revolving Lenders revised Notes, such Notes to be
substantially in the form shown on Exhibit A to this First Amendment
in the amounts specified in Paragraph I above. Upon receipt of such
revised Notes, the Revolving Lenders shall cancel and return to the
Borrower the current Notes.
14. This First Amendment may be executed in several counterparts and such
counterparts together shall constitute one and the same instrument.
15. On or prior to the date of this Agreement, the Borrower shall pay to
Agent a closing fee of $37,500, which is equal to 15 basis points
times the increase in the facility over $50,000,000. Such closing fee
shall be remitted to the Revolving Lenders pro rata based on their
respective percentages of such increase.
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16. For purposes of the Security Agreement and the Pledge Agreement, all
references to the "Notes" shall mean the Notes issued under this First
Amendment (and all notes given in substitution, renewal or replacement
thereof), and all references to the "Revolving Credit Agreement" shall
mean the Agreement as amended by this First Amendment and as
subsequently amended from time to time by the parties in accordance
with its terms. It is the intent of the parties to this First
Amendment that the collateral granted under the Security Agreement and
the Pledge Agreement shall secure the obligations created under the
revised Notes issued pursuant to this First Amendment and the
obligations of the Borrower under the Agreement as amended.
17. On or prior to the execution and delivery of this First Amendment, the
Borrower shall deliver to Agent the following:
a. A certified copy of the Borrower's certificate of incorporation
from the Secretary of the State of Delaware and a certificate of
its corporate secretary evidencing the by-laws of the Borrower,
corporate resolutions authorizing the transactions contemplated
by this First Amendment, and the incumbency of the officers of
the Borrower executing this First Amendment and the Notes; and
b. an opinion of special counsel to the Borrower substantially in
the form attached to this First Amendment.
Except as expressly agreed herein, all terms of the Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the Borrower and the Revolving Lenders have caused this
First Amendment To 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: VP & CFO
-------------------------------
FIRST NATIONAL BANK OF OMAHA
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, or offer to forebear repayment of money or to make any other
financial
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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: RTS
--------
Borrower
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LASALLE BANK, N.A.
By: /s/ [Illegible]
------------------------------------
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:
RTS
--------
Borrower
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇. ▇▇▇▇▇, ▇.▇.
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:
RTS
--------
Borrower
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▇▇▇▇▇▇ 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:
RTS
--------
Borrower
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EXHIBIT A
TO FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
LASALLE BANK N.A. AND
MERCANTILE BANK OF ST. LOUIS, N.A.
FORM OF NEW NOTES
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ $_____________________
May __, 1999 December 31, 2000
(Note Date) (Maturity Date)
On or before December 31, 2000, 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 Revolving Credit Agreement
dated as of January 16, 1998, 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 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 date that the interest is billed (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 %
(the "Revolving Credit Rate"). 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 daily based on changes
in such Prime Rate on such date. 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 then 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 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.
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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
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.
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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 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.
This Note is given in substitution of that certain Secured Business
Promissory Note dated January ____, 1998, given by Maker to Lender, in the
principal amount of $___________________.
Executed as of this _____ day of ________________, 1999.
AMERITRADE HOLDING CORPORATION
By:________________________________
Title:________________________________
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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
---- ---------- ---------- ------------- ------- -------
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EXHIBIT B
TO FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
LASALLE BANK N.A. AND
MERCANTILE BANK OF ST. LOUIS, N.A.
DRAWING CERTIFICATE
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DRAWING CERTIFICATE
AMERITRADE HOLDING CORPORATION
To induce the First National Bank of Omaha, and the other Revolving Lenders that
are parties to the Agreement referred to below (the "Revolving Lenders") to make
an Advance under the Revolving Credit Agreement (the "Agreement") dated as of
January 16, 1998, between the undersigned (the "Borrower") and the Revolving
Lenders, the Borrower hereby certifies to the Revolving Lenders that its
Annualized Modified Cash Flow (as defined in the Agreement) as represented below
are true and correct, that the Borrower's representations and warranties under
the Agreement remain true and correct and that there is no Event of Default or
condition or event which with the passage of time or the giving of notice or
both would constitute an Event of Default, and that there is no default under
the aforementioned Agreement.
All information as of: Date_____________
a) Maximum Revolving Credit Facility $______________*
b) Principal on Revolving Credit $______________
c) ADVANCE REQUEST $______________
d) Total Proposed Bank Debt
(line b + line c, but $______________
not to exceed line a)
e) Most recent Annualized Modified Cash Flow $______________
f) 1.5 x Most recent Annualized Modified Cash Flow $______________
g) $200 x Number of Core Retail Accounts $______________
h) Enter the smallest of lines (d), (f), and (g) $______________
* The Maximum Revolving Credit Facility is as follows:
Closing until June 30, 2000 $75,000,000
July 1, 2000 - September 30, 2000 $71,875,000
October 1, 2000 - December 31, 2000 $68,750,000
Name of Borrower: AmeriTrade Holding Corporation
Signature: _____________________
Title: _____________________
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EXHIBIT C
TO FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
LASALLE BANK, N.A. AND
MERCANTILE BANK OF ST. LOUIS, N.A.
COMPLIANCE CERTIFICATE
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COMPLIANCE CERTIFICATE
AMERITRADE HOLDING CORPORATION
First National Bank of Omaha Date______________
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
I certify that AmeriTrade Holding Corporation is in compliance with the
requirements set forth in the Revolving Credit Agreement (the "Agreement") dated
as of January 16, 1998, between the undersigned (the "Borrower") and the
Revolving Lenders.
The following calculations are as of ________ (statement date) as required by
Section 4.1(e) of said Agreement:
Evaluations:
Total Indebtedness (TI):
Annualized Modified Cash Flow for this Quarter:
month month month
ending______ ending______ ending______
Consolidated
Net Income (loss)
Before Taxes ____________ ____________ ____________
Non-Ordinary
Non-Cash
Charges (Credits) ____________ ____________ ____________
Plus Advertising
Expenditures in
excess of $667,000
for such month ____________ ____________ ____________
Total a) ____________ b) ____________ c) ____________
QAMCF = (a+b+c) x 4 = ____________
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Section 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 Shown Minimum Net Worth
------------ -----------------
Prior to 12/31/99 $ 85,000,000
After 12/31/99
but on or prior
to 12/31/00 $100,000,000
- Position: Total Net Worth = $_____________
The Borrower [is/is not] in compliance with Section 4.3.
Section 4.4
- Indebtedness: At no time will Borrower: (1) have Indebtedness other then
as incurred under this Agreement or (2) have total
Indebtedness in excess of 3.0 times AMCF.
- Position: (1) Borrower [has/does not have] Indebtedness other than as
incurred under this Agreement;
(2) (3.0 x AMCF) - total Indebtedness =
________ - ________ = ___________
Section 4.7
- Distributions: The Borrower shall not declare any dividends (other than
dividends payable in stock of the Borrower) 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.
The Borrower [is/is not] in compliance with Section 4.7.
Section 4.11
- Guaranties: The Borrower and its Subsidiaries shall not have outstanding
at any time guaranties in an aggregate amount exceeding
$250,000.
- Position: Aggregate amount of guaranties outstanding: $_____________
The Borrower [is/is not] in compliance with Section 4.11.
22
Section 4.16
- Capital Expenditures: The Borrower shall not make capital expenditures in any
fiscal year, commencing with the fiscal year beginning
January 1, 1999, in excess of $50,000,000; provided
however that any portion of such $50,000,000 which is
not expanded for capital expenditures may be rolled
over and added to the capital expenditures for the next
fiscal year.
- Position: Amount of capital expenditures eligible to be rolled
over to this period:
$____________ + $50,000,000 = $______________
Capital Expenditures this fiscal year = $_____________
The Borrower [is/is not] in compliance with Section 4.16.
Section 4.17
- Acquisitions The Borrower shall not make acquisitions (other than
excepted acquisitions) which in the aggregate exceed
$5,000,000.
- Position Acquisitions in the aggregate since the date of the
Agreement = _______________.
The Borrower [is/is not] in compliance with Section 4.17.
Section 4.19
- Minimum Regulatory
Net Capital AmeriTrade Clearing will have Regulatory Net Capital
not less than 5% of aggregate debit items.
- Position: Regulatory Net Capital: $__________________(_____%)
Aggregate Debit Items: $__________________
The Borrower [is/is not] in compliance with Section 4.19.
Section 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 Number of Core
---- ------------------- --------------
Accounts Retail Accounts
-------- ---------------
23
Prior to 12/31/99 290,000 ___________
On or after 12/31/99 375,000 ___________
The Borrower [is/is not] in compliance with Section 4.20.
Additional Representations:
There have/have not been any sale(s) of assets which would require
prepayment of the Notes under Section 4.2.
There has/has not been a Change of Control.
Name of Borrower: AmeriTrade, Holding Corporation
Signature: _______________________
Title: _______________________
24
[ LETTERHEAD OF ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ ]
May 25, 1999
To the Agent and the Revolving
Lenders party to the Credit Agreement
referred to below
Re: First Amendment, dated as of May 24, 1999, to the Revolving Credit
Agreement, dated as of January 16, 1998, among AmeriTrade Holding
Corporation, the financial institutions party thereto and First
National Bank of Omaha, as agent
Ladies and Gentlemen:
We have acted as special counsel to AmeriTrade Holding Corporation, a
Delaware corporation (the "Company"), in connection with the execution and
delivery of the First Amendment, dated as of May 24, 1999 (the "Amendment"), to
the Revolving Credit Agreement, dated as of January 16, 1998 (the "Credit
Agreement"), among the Company, the financial institutions party thereto (the
"Revolving Lenders") and First National Bank of Omaha, as agent (the "Agent").
In connection with this opinion, we have examined:
(a) the certificate of incorporation and bylaws of the Company;
(b) resolutions of the board of directors of the Company;
(c) the Amendment;
(d) the Security Agreement dated as of January 16, 1998 (the "Security
Agreement") between the Company and the Agent;
(e) the Stock Pledge Agreement dated as of January 16, 1999 (the "Pledge
Agreement") between the Company and the Agent;
(f) the Secured Business Promissory Notes dated May 24, 1999 made by the
Company to the order of the Revolving Lenders (the "Notes"); and
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May 25, 1999
Page 2
(g) the Credit Agreement
We also have examined originals, or copies certified or otherwise
identified to our satisfaction as being true copies, of such agreements,
corporate records, certificates of public officials and other documents, as we
have deemed necessary as a basis for the opinions hereinafter expressed. As to
questions of fact material to such opinion, we have, when such facts were not
independently established by us, relied upon certificates of the Company or
its officers or of public officials.
In our examination of the documents referred to above, we have assumed
the authenticity of all such documents submitted to us as originals, the
conformity to the originals of all such documents submitted to us as copies,
the genuineness of all signatures, and the legal capacity and power of, and
due authorization, execution and delivery of the Amendment and the Credit
Agreement by, all parties other than the Company. Further, me have assumed
that each of the Amendment, the Credit Agreement as amended by the Amendment
(the "Amended Credit Agreement"), the Security Agreement and the Pledge
Agreement constitutes the legal, valid and binding obligation of all parties
thereto other than the Company.
Based upon the foregoing and further subject to the qualifications set
forth at the end of this opinion letter, we are of the opinion that:
1. The Company is a validly existing corporation in good standing under
the laws of the State of Delaware. For purposes of the opinion in this
paragraph as to valid existence and good standing, we have relied exclusively
upon a certificate issued by governmental authorities of the State of Delaware
and such opinion is not intended to provide any conclusion or assurance beyond
that conveyed by such certificate.
2. The Company has the requisite corporate power and authority to execute
and deliver the Amendment and the Notes and perform its obligations under the
Notes and the Amended Credit Agreement. The execution and delivery of the
Amendment and the Notes and the performance by the Company of its obligations
under the Notes and the Amended Credit Agreement have been duly authorized by
all necessary corporate action an the part of the Company. Each of the
Amendment and the Notes has been duly executed by the Company.
3. Each Note and the Amended Credit Agreement constitutes the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms. Each of the Security Agreement and the Pledge
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, and the Security
Agreement and the Pledge Agreement secure the indebtedness of the Company
under the Amended Credit Agreement and the Notes. In rendering the opinion in
this
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May 25, 1999
Page 3
paragraph 3, we have assumed, with your permission, that the laws of the State
of Illinois would govern the Notes, the Amended Credit Agreement, the Security
Agreement and the Pledge Agreement (the "Documents") notwithstanding the
selection of Nebraska law as the governing law of the Documents. In making the
foregoing assumption, we do not intend to imply that an Illinois court would
not give effect to such selection of Nebraska law.
The opinions set forth above are subject to the following qualifications
and limitations:
(A) Our opinions stated herein are subject to the effect of any
applicable bankruptcy, insolvency, fraudulent conveyance, equitable
subordination, reorganization, readjustment of debt, moratorium or
similar laws affecting creditors' rights generally.
(B) Our opinions stated herein are further subject to the effect of
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether considered in a proceeding in equity or at law) and by
limitations on the availability of specific performance, injunctive
relief or other equitable remedies.
(C) We express no opinion as to the enforceability, under certain
circumstances, of provisions imposing penalties or forfeitures, late
payment charges or an increase in interest rate upon delinquency in
payment or the occurrence of a default.
(D) Certain of the remedial provisions contained in the Documents
may be unenforceable in whole or in part but the inclusion of such
provisions does not render the Documents invalid as a whole, and there
exist, in the Documents or pursuant to applicable law, legally adequate
remedies for the practical realization of the principal benefits
purported to be afforded by such documents; (except for the economic
consequences of procedural or other delay).
(E) We express no opinion as to:
(1) the existence of any person's or entity's ownership rights
in or title to any collateral;
(2) the validity, perfection, priority or enforceability of any
lien, charge or encumbrance on or to any property or assets;
(3) any agreement by the Company to submit to the jurisdiction
of a particular court, waive jury trial or appoint an agent for
acceptance of service of process;
27
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May 25, 1999
Page 4
(4) any provision purporting to waive any objection to the
laying of venue or any claim that an action or proceeding has been
brought in an inconvenient forum;
(5) any provision of any Document which authorizes or permits
any purchaser of a participation interest from any party to set off
or apply any deposit or property or any indebtedness with respect to
any participation interest;
(6) compliance with, or any governmental or regulatory filing,
approval, authorization, license or consent required by or under,
any (a) Federal or state environmental laws, (b) Federal or state
antitrust laws, (a) Federal or state taxation laws, (d) Federal or
state worker health or safety, zoning or permitting or land use
matters, (e) Federal or state patent, trademark or copyright
statutes, rules or regulations, (f) statutory or other requirements
relating to the disposition of hazardous waste or environmental
protection, (g) Federal or state receivership or conservatorship
laws, (h) securities registration or antifraud provisions under
Federal or state securities laws, (i) Federal or state labor or
employment law or (j) Federal or state employee benefits or pension
law;
(7) the effect of the law of any jurisdiction wherein any
Revolving Lender may be located or wherein the enforcement of any
Document may be sought that limits the rates of interest legally
chargeable or collectible; and
(8) any provision of any Document (i) restricting access to
legal or equitable remedies, (ii) purporting to establish
evidentiary standards, (iii) purporting to appoint any person or
entity as the attorney-in-fact of any other person or entity, (iv)
which provides that the Documents may only be amended, modified or
waived in writing or (v) stating that all rights or remedies of any
party are cumulative and may be enforced in addition to any other
right or remedy and that the election of a particular remedy does
not preclude recourse to one or more remedies.
(F) We note that the enforceability of the Documents may be limited
or rendered ineffective if the Agent or the Revolving Lenders fail to
act in good faith and in a commercially reasonable manner in seeking to
exercise their rights and remedies thereunder. Without limiting the
generality of the foregoing, we note that a court might hold that a
technical and nonmaterial default under the Documents does not give rise
to a right of the Agent or the Revolving Lenders to exercise certain
remedies including, without limitation, acceleration.
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May 25, 1999
Page 5
(G) We express no opinion as to the enforceability of the
indemnification provisions of the Documents insofar as said provisions
contravene public policy or might require indemnification or payments to
any person or entity with respect to any litigation determined adversely
to such person or entity, or any loss, cost or expense arising out of
the gross negligence or willful misconduct of such person or entity or
any violation by such person or entity of statutory duties, general
principles of equity or public policy.
(H) No opinion is rendered herein as to the effect of any law
relating to your legal or regulatory status.
(I) We have assumed that there are no agreements or understandings
among the parties, written or oral, and there is no usage of trade or
prior course of dealing among the parties, that would supplement or
modify the terms of any Document.
This opinion is being delivered to you pursuant to Section 17.b of the
Amendment, is rendered solely to and for your benefit and may not be relied
upon for any other purpose, or relied upon by any other person, firm or
corporation for any purpose, without our prior written consent.
Notwithstanding the foregoing, assignees of Revolving Lenders who become
Revolving Lenders under the Amended Credit Agreement and participants
permitted under the Amended Credit Agreement may rely on this opinion as if it
were addressed to them.
We are members of the Bar of the State of Illinois. This opinion is
limited to the law of such state, the federal laws of the United States and
the General Corporation Law of the State of Delaware. With respect to opinions
contained herein on matters governed by the General Corporation Law of the
State of Delaware, you are aware that we are not admitted to the Bar of the
State of Delaware and that such opinions are based solely upon our familiarity
with the General Corporation Law of the State of Delaware as a result of our
prior involvement in transactions of a nature similar to those contemplated by
the Documents. The opinions expressed herein are limited in all respects to
the law existing on the date hereof. In rendering this opinion, we do not
undertake to advise you of any change in law or fact that may occur after the
date hereof.
Very truly yours,
/s/ ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇