EXHIBIT 10.1
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION
AND
FIRST NATIONAL BANK OF OMAHA
DECEMBER 28, 2001
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (the "Agreement") is
entered into as of the 28th day of December, 2001, among AMERITRADE HOLDING
CORPORATION, a Delaware corporation having its principal place of business at
0000 Xxxxx 000xx Xxxxxx, Xxxxx, Xxxxxxxx 00000 (the "Borrower"), such lenders as
may become Revolving Lenders hereunder after the date hereof and FIRST NATIONAL
BANK OF OMAHA, a national banking association having its principal place of
business at Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000 ("Agent" or
"FNB-O").
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, which, after the
consolidation of broker-dealer subsidiaries expected to occur on
or about January 2, 2002, will be known as "Ameritrade, Inc."
Agreement: This Amended and Restated Revolving Credit Agreement dated as
of December 28, 2001, 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 $2,000,000.
Borrower: Ameritrade Holding Corporation, a Delaware corporation having
its principal place of business at 0000 Xxxxx 000xx Xxxxxx,
Xxxxx, Xxxxxxxx 00000.
Business
Day: Any day other than a Saturday, Sunday or a legal holiday on which
banks in the State of Nebraska 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
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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 the Pledged NITE
Stock (as that term is defined in the Pledge Agreement)
including any additional Pledged NITE Stock required to be
delivered pursuant to the terms of the Pledge Agreement;
(c) all of the Borrower's accounts, accounts
receivable, chattel paper, documents, instruments and other
securities (excluding NITE Stock other than the Pledged NITE
stock), goods, inventory, letter of credit rights,
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 publicly on a quarterly basis.
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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 Amended and Restated Revolving Credit Agreement dated as
of January 25, 2000, as amended prior to the date hereof, by
and among the Borrower, FNB-O, Xxxxxx Trust and Savings Bank,
LaSalle Bank National Association and Mercantile Bank National
Association.
FNB-O: First National Bank of Omaha, a national banking association
having its principal place of business at Xxx Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx, Xxxxxxxx 00000, and its successors and assigns.
GAAP: Generally accepted accounting principles as in effect from
time to time in the United States of America.
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 and amounts
outstanding under any other Credit Facility.
Letter(s) of
Credit: Letter(s) of Credit issued under the Letter of Credit
Facility, the Letter of Credit Amount of which shall not
exceed $5,000,000.00 at any time.
Letter of
Credit
Amount: The original face amount of the Letters of Credit, minus the
amount of any draws thereunder which have been reimbursed to
the Agent for the benefit of the Revolving Lenders.
Letter of
Credit
Facility: The letter of credit facility provided for in Section 2.7 of
the Agreement.
Letter of
Credit Fees: The letter of credit fees specified in Section 2.9 of this
Agreement.
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
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business day of each month, or if no such rate is published on
such date, on the last preceding date on when such rate was
published.
National
Prime 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.
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 Trading Group, Inc. (formerly Knight/Trimark
Group, Inc.).
Notes: The revolving credit note, substantially in the form of
Exhibit A attached to this Agreement, which note replaces 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.
Other Credit
Facility: As defined in Section 4.24 hereof.
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 Xxxxx'x
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
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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 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.
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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, plus the then current
Letter of Credit Amount.
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 fifty-one percent (51%)
by amount of the Principal Loan Amount outstanding or, if no
Principal Loan Amount is outstanding, Revolving Lenders
representing fifty-one percent (51%) of the Commitments in
effect at such time.
Revolving
Credit Rate: As defined in Section 2.3 hereof.
Revolving
Lenders: FNB-O 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 1, 2004,
originally issued by the Borrower in the amount of
$200,000,000, but as of the date hereof, outstanding in the
amount of $47,645,000, 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
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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 27, 2002, 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 27, 2002, the Revolving Lenders
severally agree to advance funds for general corporate purposes not to exceed
the amount shown on Appendix I attached hereto, as amended from time to time
(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 maximum Advance limits and applicable percentages for each
Revolving Lender as shown on Appendix I attached hereto, as amended from time to
time; provided, however, that each Revolving Lender's Commitment is several and
not joint or joint and several.
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
(w) the then current Base Revolving Credit Facility, or (x) one and one-half (1
1/2) times the Borrower's Annualized Modified Cash Flow, or (y) the number of
Core Retail Accounts times $200, or (z) seventy percent (70%) of the then
current fair market value of the Pledged NITE Stock, 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 in all
material respects 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 3/8 of 1% (.00375) 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
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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 $50,000.00,
which is equal to 1/4 of 1% (.0025) of the Base Revolving Credit
Facility, as set forth in Section 2.1 above, such fee to be payable at
closing.
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 National Prime
Rate, or (b) the LIBOR Rate plus 2.50%, but in no event shall the Revolving
Credit Rate be less than five percent (5.0%) per annum. 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 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 27, 2002, 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 and to pay all amounts
due in connection with the Letters of Credit shall be secured by a first
security interest in the Collateral, as more specifically described in the
Security Agreement and the Pledge Agreement. All references in the Security
Agreement and the Pledge Agreement to the "Revolving Credit Agreement" shall
mean this Agreement as amended from time to time.
2.7 Letter of Credit Facility. Subject to and upon the terms and
conditions herein set forth, the Borrower may request and FNB-O on behalf of the
Revolving Lenders shall issue from time to time for the account of the Borrower
or one or more of its Subsidiaries letters of credit (the "Letters of Credit");
provided, however, the Agent shall have no obligation to issue any such
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Letter of Credit unless at such time the Borrower meets all the conditions for
an Advance under the Base Revolving Credit Facility and, after such issuance,
the aggregate Letter of Credit Amount outstanding will not exceed $5,000,000 and
the Principal Loan Amount will not exceed the then available Base Revolving
Credit Facility, all as more specifically set forth in this Agreement. The
Revolving Lenders shall be obligated to fund pro rata according to their
respective pro rata percentages shown in Section 2.1 of this Agreement any draws
on such Letters of Credit and shall be entitled to share pro rata in the Letter
of Credit Fees and reimbursement amounts received in connection with such
Letters of Credit. The Letter of Credit Amount outstanding at any time shall
operate to reduce amounts available to be drawn under the Base Revolving Credit
Facility by such sum, and shall be deemed to be outstanding for purposes of
calculating the commitment fee under Section 2.2 (a) of this Agreement. No
Letter of Credit shall have a maturity date occurring more than one year after
the issue date thereof, and in no event later than the Termination Date of this
Agreement; provided, however, FNB-O, upon five days prior written notice to the
other Revolving Lenders, may issue one or more Letters of Credit in an aggregate
amount not to exceed $1,000,000.00 in Letters of Credit under this Agreement
with a maturity occurring after the Termination Date of this Agreement (a
"Non-Conforming Letter of Credit"), but no other Revolving Lender shall be
obligated to fund any draws on such Non-Conforming Letters of Credit and shall
not be entitled to share pro rata in the Letter of Credit Fees and reimbursement
amounts received in connection therewith unless such Revolving Lender elects in
writing to participate in such Non-Conforming Letters of Credit after receipt of
notice from FNB-O. Except as provided in the preceding sentence, any such
Non-Conforming Letters of Credit shall in all other respects be deemed a "Letter
of Credit" under this Agreement. Any reference in this Agreement (including
without limitation Articles VII and VIII) to a "loan" or "loans" made under this
Agreement shall include the Letters of Credit.
2.8 Letter of Credit Documents. Prior to the issuance by FNB-O of any
Letters of Credit, the Borrower and, if requested by FNB-O, the applicable
Subsidiary, shall execute and deliver to FNB-O an application and continuing
letter of credit agreement, such agreements to be in the forms attached hereto
as Attachment A to this Agreement, as such forms may be amended from time to
time for general use in connection with letters of credit issued by FNB-O.
2.9 Letter of Credit Fees. In addition to all costs incurred by FNB-O
in the issuance and enforcement of the Letters of Credit which are to be
reimbursed by the Borrower in accordance with the application and continuing
letter of credit agreement executed in connection with each Letter of Credit,
the Borrower shall pay to the Agent a letter of credit fee (the "Letter of
Credit Fee") equal to two and one-half percent (2.5%) per annum of the
outstanding Letter of Credit Amount, such fee to be paid quarterly in arrears
based on the average Letter of Credit Amount outstanding during such quarter;
provided, however, that at any time that an Event of Default has occurred and is
continuing under the Agreement, such fee shall be equal to five percent (5%) per
annum. Interest shall accrue on amounts drawn under any Letter of Credit, until
such amount is reimbursed, at the then current rate for amounts outstanding
under the Revolving Note and, for any period that such draw remains unreimbursed
more than two Business Days after such draw, at the Default Rate. In addition,
the Borrower shall pay such other administrative fees, including a fee for
opening the Letter of Credit, as are agreed in writing between FNB-O and the
Borrower. Amounts received by FNB-O for opening a Non-Conforming Letter of
Credit or as administrative fees with respect to any Letter of Credit remain the
property of FNB-O and shall not be shared pro rata with the Revolving Lenders.
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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. Each of the Borrower and its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation 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 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 is likely to have a material adverse effect on (a) the Borrower's
ability to perform its obligations under its Operative Documents or (b) a
Subsidiary's ability to pay dividends to the Borrower, to the extent that such
impaired ability would have a material adverse effect on the Borrower and its
Subsidiaries, taken as a whole; 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
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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 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 Schedule A attached hereto. The
Borrower is a Delaware corporation with its principal place of business, chief
executive office, and the principal place where it keeps its records concerning
the Collateral at 0000 Xxxxx 000xx Xxxxxx, Xxxxx, Xxxxxxxx 00000.
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 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
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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.
(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
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in the form of Exhibit C attached hereto, setting forth such
information (including detailed calculations) sufficient to verify the
conclusions of such officer after due inquiry and review, that:
(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.
(a) 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 in clause (b) below.
(b) The foregoing restriction 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.
(c) 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 (i) items that are obsolete or no
longer necessary for operation of the business, (ii) the Borrower's
interest in Comprehensive Software Systems, Ltd. and (iii) 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 net cash 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
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remain a violation of this Agreement. For purposes of this Section 4.2
(c), "net cash proceeds" shall mean the amount in cash or cash
equivalents received from the sale after taxes and after payment of all
costs and expenses incurred in connection with the sale, including
brokerage or similar fees.
(d) 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.
4.3 Net Worth. The Borrower shall maintain a minimum Net Worth at
closing and during the term of this Agreement of at least $360,000,000.00.
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 lesser of (i) fifty percent
(50%) of its Net Worth or (ii) three (3) times its Annualized Modified Cash
Flow, in each case tested at the end of each calendar 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 T, U or X of the Board of Governors of the Federal
Reserve System of the United States.
4.6 Notice of Occurrences. 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 is likely to
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have a material 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 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
-16-
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 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, state of
incorporation, or 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 capital
expenditures commencing with the fiscal year beginning September 28, 2001,
determined in accordance with generally accepted accounting principles, of more
than $50,000,000.
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,
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that without the consent of the Requisite Revolving Lenders (i) the Borrower
shall be permitted to make in any twelve-month period the following: (y)
acquisitions and investments for which the Borrower pays cash in an amount not
to exceed $5,000,000.00 in the aggregate and (z) acquisitions the consideration
for which is payable by the issuance by Borrower of capital stock having a value
(determined, with respect to the consideration for any such acquisition, at the
time such acquisition is consummated) not to exceed $75,000,000.00 in the
aggregate; (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; (iii) Advanced Clearing shall be permitted to hold short
term equity positions in the normal course of its securities clearing business;
and (iv) Permitted Investments. 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
1,600,000 Core Retail Accounts as of the date hereof and during the term of this
Agreement.
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 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
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(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, such payment to be payable at closing, and in connection with
the transaction contemplated by the Operative Documents after the closing,
including without limitation, any waiver, amendment or enforcement thereof, such
payment to be payable on demand by the Agent. 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 Other Credit Agreements; NITE Stock.
(a) The Borrower shall not suffer to exist any security
interest on the Pledged NITE Stock, other than the security interest of
the Agent. The Borrower shall not suffer to exist any security interest
or other encumbrance on any other portion of the NITE Stock owned by
the Borrower and its Subsidiaries other than to secure indebtedness of
the Borrower under any credit, margin stock, or put and/or call
agreement secured by or covering such NITE Stock (an "Other Credit
Facility").
(b) The Borrower shall not permit the aggregate principal
amount outstanding under all Other Credit Facilities to exceed 70% of
the fair market value of the NITE Stock (exclusive of the Pledged NITE
Stock) owned by the Borrower and its Subsidiaries.
(c) Prior to entering into any Other Credit Facility, the
Borrower shall provide to Agent a copy of the final form of the
operative agreements for the Other Credit Facility and such Other
Credit Facility shall not, in the reasonable opinion of Agent,
constitute an Event of Default hereunder or materially adversely affect
the rights of the Revolving Lenders under this Agreement.
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:
(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 of
the security interest
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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.
VI. 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.
(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 or 4.22 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
-20-
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), Other Credit Agreement, 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
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
-21-
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, to the extent that such impaired ability would have a
material adverse effect on the Borrower and its Subsidiaries, taken as
a whole, 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 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,
to the extent that such impaired ability would have a material adverse
effect on the Borrower and its Subsidiaries, taken as a whole, or (c)
the Borrower's ability to perform its obligations under this Agreement
or any of the Operative Documents.
(l) The Principal Amount Outstanding shall exceed eighty
percent (80%) of the fair market value of the Pledged NITE Stock and
such excess shall continue for more than two Business Days, as set
forth in Section 4.3 of the Pledge Agreement.
6.2 Remedies. If an Event of Default occurs and is continuing, upon the
election of the Requisite 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 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
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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 the Requisite
Revolving Lenders 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 Requisite Revolving Lenders shall have indicated their consent
thereto. Notwithstanding the foregoing, approval of a Revolving Lender shall be
required for: (i) any reduction or compromise of the principal loan amount of
any Note held by such Lender, 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 under such Note; 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 revolving credit facility hereunder may be made with the
consent of the Requisite 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)
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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.
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.
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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 $20,000, payable quarterly on or before the last day of such quarter in
equal installments of $5,000; provided that such fee shall be zero ($0) until
such time as there is more than one Revolving Lender hereunder.
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
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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 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
0000 Xxxxx 000xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
If to the Agent:
FIRST NATIONAL BANK OF OMAHA
One First National Center
Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
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If to the Revolving Lenders, at their respective addresses
listed 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 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.
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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/ Xxxxxxx X. Xxxxxx
------------------------------------------
Title: Managing Director of Finance
---------------------------------------
FIRST NATIONAL BANK OF OMAHA
By: /s/ XX Xxxxxx
-----------------------------------------
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/WJG
------------------
Borrower
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APPENDIX I
TO REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION
AND
FIRST NATIONAL BANK OF OMAHA
REVOLVING CREDIT COMMITMENTS
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REVOLVING CREDIT COMMITMENTS
AMERITRADE HOLDING CORPORATION
LENDER REVOLVING COMMITMENT REVOLVING COMMITMENT %
------ -------------------- ----------------------
First National Bank $20,000,000.00 100%
of Omaha
TOTAL REVOLVING _____________________
CREDIT COMMITMENT $20,000,000.00
Dated as of December 28, 2001.
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