EXHIBIT 10.83
FIRST AMENDMENT TO
REVOLVING SUBORDINATED LOAN AGREEMENT
This First Amendment to Revolving Subordinated Loan Agreement ("this
First Amendment") is made and entered into by and between The Charles
Schwab Corporation (the "Lender") and Charles Schwab & Co., Inc. (the
"Organization") as of this 18th day of April, 1990. Unless otherwise
specified herein, all capitalized terms used herein shall have the meanings
ascribed to them in the Revolving Subordinated Loan Agreement dated as of
September 29, 1988 between the Lender and the Organization (the "Agreement").
WHEREAS, the Organization and the Lender desire to amend the Agreement
(i) to increase the permissible aggregate principal amount of loans
outstanding at any one time from $100,000,000.00 to $205,000,000.00, (ii) to
amend the interest rate provisions to allow the organization to elect a fixed
interest rate for a specified period of time, on the terms and conditions
stated below; and (iii) to append a Roll-over Attachment to the Agreement
providing that the Commitment Termination Date and the Scheduled Maturity Date
of the Agreement automatically shall be extended to September 29 of the
following year unless on or before the day twelve months preceding the
Scheduled maturity Date the Lender has notified the Organization in writing
with a written copy to the New York Stock Exchange, Inc.) that the Commitment
Termination Date and the Scheduled Maturity Date will not be extended.
NOW, THEREFORE, the Organization and the Lender hereby amend the
Agreement as follows:
1. The figure "$205 million" shall be and hereby is substituted in
place of the figure "$100 million" in paragraph "1." of the Agreement.
2. The fourth paragraph of paragraph "1." of the Agreement (which
begins with the words "The applicable interest rate . . .") shall be and
hereby is deleted.
3. A new paragraph "2." entitled "INTEREST" is hereby added to the
Agreement, as follows:
"2. INTEREST
(a) Except as otherwise provided in sub-paragraph (b) immediately
below, the applicable interest rate under this agreement shall be prime rate
(equal to U.S. Prime Rate on page 17 of the Telerate Systems) plus one percent
per annum (collectively, the 'Applicable Rate'). With respect to all or any
part of the principal amount of any loan hereunder outstanding as of April 18,
1990 or of any loan hereunder on or after April 18, 1990, the Organization
shall have the right to fix the Applicable Rate for a period of up to twelve
months by providing written notice to the Lender within three business days of
the date the fixed interest rate is to become effective, specifying (i) the
principal amount to which the fixed interest rate shall apply, (ii) the date
the fixed interest rate is to become effective, and (iii) the period (not to
exceed twelve months) the fixed interest rate shall apply. The applicable
fixed interest rate shall be the Applicable Rate on the date the fixed
interest rate is to become effective pursuant to the written notice. Although
the period for which the Organization may fix the interest rate shall not
exceed twelve months, at the end of any period for which the Organization has
fixed the interest rate for any loan the Organization may fix the interest
rate for such loan for an additional period not to exceed twelve months by
giving similar written notice; provided, however, that in no event shall the
Organization fix the interest rate for any loan for a period exceeding the
time remaining between (i) the date the fixed interest rate is to become
effective, and (ii) the maturity date of such loan. (For example, if the
Organization wishes to elect a fixed interest rate for twelve months effective
May 1, 1990 for $50,000,000 in principal amount outstanding as of April 18,
1990 (or, alternatively, for a new borrowing in the amount of $50,000,000 to
be made on May 1, 1990), the Organization may do so by giving written notice
to the Lender between April 25, 1990 and May 1, 1990, specifying that
effective May 1, 1990, the Applicable Rate as of May 1, 1990 shall apply to
$50,000,000 in principal amount of an outstanding loan (or $50,000,000 in
principal amount of a newly-requested loan) for the twelve-month period
commencing May 1, 1990. At the end of such twelve-month period and
thereafter, the Organization, by providing another written notice, may again
fix the interest rate for such loan for any additional period up to the
shorter of (i) twelve months and (ii) the maturity date of such loan.) For
any period for which the Organization has not fixed the interest rate of a
loan hereunder, such loan during such period shall bear interest at the
Applicable Rate, as the same may change from time to time, with interest being
computed based on the number of days elapsed at each Applicable Rate.
(b) In the event that the Organization desires to fix the
interest rate on any loan under this agreement pursuant to the procedures
described in sub-paragraph (a) immediately above but at an interest rate other
than the Applicable Rate, the Organization may, in the three-day written
notice referred to in sub-paragraph (a) immediately above ("the Organization's
written notice"), propose a rate other than the Applicable Rate (an
"Alternative Applicable Rate"). (For example, in the Organization's written
notice, the Organization may propose that the interest rate be fixed on a
specified principal amount for a specified period at an Alternative Applicable
Rate of prime rate (equal to U.S. Prime Rate on page 17 of the Telerate
Systems) plus one-half percent per annum.) If the Lender agrees to such
Alternative Applicable Rate, the Lender shall so notify the Organization in
writing prior to the date the fixed interest rate is to become effective
pursuant to the Organization's written notice, and the applicable fixed
interest rate shall be such agreed-upon Alternative Applicable Rate. If, on
the other hand, the Lender does not so notify the Organization in writing that
it has agreed to the Alternative Applicable Rate proposed in the
Organization's written notice, the applicable fixed interest rate for the
principal amount and for the loan covered by the Organization's written notice
shall be the Applicable Rate.
(c) All interest payments hereunder shall be made on the last day
of each calendar quarter.
(d) Notwithstanding anything to the contrary above or elsewhere
in this agreement, in no event shall the rate of interest hereunder exceed the
maximum rate permitted by law, and any amount received by Lender as interest
hereunder which would exceed the maximum rate permitted by law shall be
applied to reduce the unpaid principal balance hereunder or returned to the
Organization."
4. Because of the addition of a new paragraph "2." to the Agreement as
provided above, old paragraphs "2." through "18." of the Agreement are hereby
renumbered Paragraphs "3." through "19.".
5. Contemporaneously with the execution hereof, the Organization shall
execute and deliver to the Lender a new promissory note in the form attached
hereto as Exhibit A (the "new Revolving Note"), which new Revolving Note shall
replace and supersede the Revolving Note dated September 29, 1988 made and
delivered by the Organization to the Lender.
6. Contemporaneously with the execution hereof, the Lender and the
Organization shall execute a Roll-Over Attachment in the form attached hereto
as Exhibit B (the "Roll-Over Attachment"), pursuant to which the Lender and
the Organization agree that the Commitment Termination Date and the Scheduled
Maturity Date shall in each year, without further action by either the Lender
or the Organization, be extended to September 29 of the following year, unless
on or before the day twelve months preceding the Scheduled Maturity Date then
in effect, the Lender shall notify the Organization in writing, with a written
copy to the New York Stock Exchange, Inc., that the Commitment Termination
Date and the Scheduled Maturity Date then in effect shall not be extended.
The Roll-Over Attachment shall become part of the Agreement as amended by this
First Amendment.
7. Except for the amendments expressly specified above, all other
provisions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, this First Amendment is executed as of April 18,
1990 at San Francisco, California.
THE ORGANIZATION:
CHARLES SCHWAB & CO., INC.
By /s/ A. John Gambs A. John Gambs
---------------------------------
Its Executive Vice President - Finance
----------------------------------
THE LENDER:
THE CHARLES SCHWAB CORPORATION
By /s/ Lawrence J. Stupski Lawrence J. Stupski
-------------------------------------------
Its President and Chief Operating Officer
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ROLL-OVER ATTACHMENT
Additional Provision for Revolving Subordinated Loan Agreement between The
Charles Schwab Corporation ("Lender") and Charles Schwab & Co., Inc.
("Organization"), as amended by First Amendment to Revolving Subordinated Loan
Agreement between the Organization and the Lender.
PRINCIPAL AMOUNT: $205,000,000.00
DATE OF AGREEMENT: September 29, 1988
DATE OF FIRST AMENDMENT TO AGREEMENT: April 18, 1990
The Commitment Termination Date in Paragraph 1 of the Agreement as amended is
September 29, 1991 (three years from the date the Agreement was executed), and
the Scheduled Maturity Date in Paragraph 1 of the Agreement as amended is
September 29, 1992 (four years from the date the Agreement was executed). The
Commitment Termination Date and the Scheduled Maturity Date shall in each
year, without further action by either the Lender or the Organization, be
extended to September 29 of the following year, unless on or before the day
twelve months preceding the Scheduled Maturity Date then in effect, the
Lender shall notify the Organization in writing, with a written copy to the
New York Stock Exchange, Inc., that the Commitment Termination Date and the
Scheduled Maturity Date then in effect shall not be extended.
THE ORGANIZATION:
CHARLES SCHWAB & CO., INC.
By /s/ A. John Gambs A. John Gambs
--------------------------------
Its Executive Vice President - Finance
----------------------------------
and Chief Financial Officer
---------------------------
THE LENDER:
THE CHARLES SCHWAB CORPORATION
By /s/ Lawrence J. Stupski Lawrence J. Stupski
-------------------------------------------
Its President and Chief Operating Officer
-------------------------------------
REVOLVING NOTE
$205,000,000.00 Date: April 18, 1990
For value received, the undersigned Charles Schwab & Co., Inc.
("Organization") hereby promises to pay to the order of The Charles Schwab
Corporation ("Lender") the principal amount of each advance made by the Lender
to the Organization under the terms of a Revolving Subordinated Loan Agreement
between the Organization and the Lender dated as of September 29, 1988, as
amended by a First Amendment thereto between the Organization and the Lender
dated as of April 18, 1990 (collectively, the "Agreement"), as shown in the
schedule attached hereto and any continuation thereof, payable at such times
as are specified in the Agreement. The undersigned also promises to pay
interest on the unpaid principal amount of such advance from the date of such
advance until such principal amount is paid, at the rates per annum, and
payable at such times, as are specified in the Agreement. The Note shall be
subject to the Agreement, and all principal and interest payable hereunder
shall be due and payable in accordance with the terms of the Agreement. Terms
defined in the Agreement are used herein with the same meanings.
The maturity date of this Revolving Note shall be September 29, 1992.
The maturity date shall in each year, without further action by either the
Lender or the Organization, be extended to September 29 of the following year,
unless on or before the day twelve months preceding the maturity date then in
effect, the Lender shall notify the Organization in writing, with a written
copy to the New York Stock Exchange, Inc., that such maturity date shall not
be extended.
This Revolving Note replaces and supersedes the Revolving Note dated
September 29, 1988 in the maximum principal amount of $100,000,000.00,
delivered by the Organization to the Lender.
IN WITNESS WHEREOF, the undersigned has caused this Revolving Note to be
executed by its officer thereunto duly authorized and directed by appropriate
corporate authority.
Charles Schwab & Co., Inc.
By: /s/ A. John Gambs
-------------------------
A. John Gambs
Executive Vice President -
Finance and Chief
Financial Officer