Exhibit 10.206
CREDIT AGREEMENT
(364-DAY COMMITMENT)
June 25, 1999
Among
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
As Administrative Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
BANC OF AMERICA SECURITIES LLC
and
THE FIRST NATIONAL BANK OF CHICAGO
As Documentation Agent
CITICORP USA, INC.
As Syndication Agent
THE CHARLES SCHWAB CORPORATION
TABLE OF CONTENTS
1. DEFINITIONS...........................................................1
2. THE CREDIT FACILITY..................................................11
2.1. The Revolving Credit Facility...................................12
2.2. Term Loan Facility..............................................12
2.3. Evidence of Borrowing/Promissory Notes..........................13
2.4. Making of Revolving Loans and Term Loans, Borrowings;
Interest Periods; Notice......................................13
2.5. Conversion and Continuation Elections...........................15
2.6. Interest Periods................................................16
2.7. Interest Rates..................................................17
2.8. Substitute Rates................................................17
2.9. Fees............................................................18
2.10. Reduction of Credit.............................................19
2.11. Termination Date; Extensions....................................19
2.12. Payments by the Lenders to the Agent............................20
2.13. Sharing of Payments, Etc........................................21
2.14. Computation of Fees and Interest................................21
3. PAYMENT..............................................................21
3.1. Repayment.......................................................21
3.2. Method of Payment...............................................22
3.3. Optional Prepayment.............................................22
3.4. Taxes/Net Payments..............................................22
3.5. Illegality......................................................23
3.6. Increased Costs and Reduction of Return.........................24
3.7. Funding Losses..................................................24
3.8. Certificates of Lenders.........................................25
3.9. Substitution of Lenders.........................................25
3.10. Survival........................................................26
4. CONDITIONS...........................................................26
4.1. Conditions Precedent to the Effectiveness of this Agreement.....26
4.2. Conditions Precedent to Revolving Loans and Term Loans..........27
5. REPRESENTATIONS AND WARRANTIES.......................................28
5.1. Organization and Good Standing..................................28
5.2. Corporate Power and Authority...................................28
5.3. Enforceability..................................................28
5.4. No Violation of Laws or Agreements..............................28
5.5. No Consents.....................................................29
5.6. Financial Statements............................................29
5.7. Broker Subsidiary Licenses, Etc.................................29
5.8. Broker Subsidiary/Broker Registration...........................29
5.9. Broker Subsidiary/SIPC..........................................29
5.10. Taxes...........................................................29
5.11. ERISA...........................................................29
5.12. No Extension of Credit for Default Remedy/Hostile Acquisition...30
5.13. Use of Proceeds/Margin Regulations..............................30
5.14. Authorized Persons..............................................30
5.15. Material Contracts..............................................30
5.16. Litigation......................................................30
5.17. Investment Company..............................................30
5.18. Year 2000 Compliance............................................30
6. AFFIRMATIVE COVENANTS................................................31
6.1. Notice of Events of Default.....................................31
6.2. Financial Statements............................................31
6.3. Insurance.......................................................31
6.4. Books and Records...............................................31
6.5. Change in Business..............................................31
6.6. Year 2000 Compliance............................................31
7. NEGATIVE COVENANTS...................................................32
7.1. Net Capital.....................................................32
7.2. Minimum Stockholders' Equity....................................32
7.3. Merger/Disposition of Assets....................................32
7.4. Broker Subsidiary Indebtedness..................................32
7.5. Indebtedness Secured by Subsidiary Stock........................33
7.6. Liens and Encumbrances..........................................33
8. EVENTS OF DEFAULT....................................................33
8.1. Defaults........................................................34
8.2. Remedies........................................................35
9. THE AGENT............................................................36
9.1. Appointment and Authorization...................................36
9.2. Delegation of Duties............................................36
9.3. Liability of Agent..............................................36
9.4. Reliance by Agent...............................................37
9.5. Notice of Default...............................................37
9.6. Credit Decision.................................................37
9.7. Indemnification of Agent........................................38
9.8. Agent in Individual Capacity....................................38
9.9. Successor Agent.................................................39
9.10. Withholding Tax.................................................39
9.11. Co-Agents: Lead Managers........................................40
10. MISCELLANEOUS........................................................41
10.1. Amendments and Waivers..........................................41
10.2. Notices.........................................................41
10.3. No Waiver-cumulative Remedies...................................42
10.4. Costs and Expenses..............................................42
10.5. Borrower Indemnification........................................43
10.6. Payments Set Aside..............................................44
10.7. Successors and Assigns..........................................44
10.8. Assignments, Participations etc.................................44
10.9. Confidentiality.................................................46
10.10. Notification of Addresses, Lending Offices, Etc.................47
10.11. Counterparts....................................................47
10.12. Severability....................................................47
10.13. No Third Parties Benefited......................................48
10.14. Governing Law and Jurisdiction..................................48
10.15. Waiver of Jury Trial............................................48
10.16. Entire Agreement................................................49
10.17. Headings........................................................49
EXHIBIT A-1 REVOLVING NOTE....................................................4
EXHIBIT A-2 TERM NOTE.........................................................7
EXHIBIT B BORROWING ADVICE....................................................9
EXHIBIT C NOTICE OF CONVERSION/CONTINUATION..................................11
EXHIBIT D COMMITMENT AND TERMINATION DATE EXTENSION REQUEST..................13
EXHIBIT E BORROWER'S OPINION OF COUNSEL......................................14
EXHIBIT F FORM OF NOTICE OF ASSIGNMENT AND ACCEPTANCE........................18
EXHIBIT G YEAR 2000 COMPLIANCE STATEMENT.....................................21
SCHEDULES:
Schedule 1 - Lenders' Commitments
Schedule 2 - List of Borrowing Agreements
Schedule 10.2 - Notice
CREDIT AGREEMENT (364-DAY COMMITMENT)
THIS CREDIT AGREEMENT (364-DAY COMMITMENT) ("this Agreement") is
entered into as of June 25, 1999, among The Charles Schwab Corporation, a
Delaware corporation (the "Borrower"), the several financial institutions from
time to time party to this Agreement (collectively the "Lenders"; individually
each a "Lender") and Bank of America National Trust and Savings Association, as
Agent for the Lenders.
WHEREAS, the Lenders are willing to make from time to time
Revolving Loans to the Borrower through June 23, 2000 and to make Term Loans to
the Borrower on or before June 23, 2000 and maturing no later than June 22, 2001
upon the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements and covenants herein contained, the parties hereto agree as
follows:
1. DEFINITIONS. The following terms have the following meanings:
Affiliate: As to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the other
Person, whether through the ownership of voting securities, membership
interests, by contract, or otherwise.
Agent: BofA in its capacity as agent for the Lenders hereunder and any
successor agent appointed under Section 9.9.
Agent-Related Persons: BofA and any successor agent appointed under Section
9.9, together with BofA's Affiliate, the Arranger, and the officers,
directors, employees, agents and attorney-in-fact of such Persons and
Affiliate.
Agreement: This Credit Agreement.
Agent's Payment Office: The address for payments set forth on the signature
page hereto in relation to the Agent, or such other address as the Agent
may from time to time specify.
Applicable Margin: (i) with respect to Fed Funds Rate Loans, 0.35%
(ii) with respect to CD Rate Loans, 0.50%; and
(iii) with respect to Eurodollar Rate Loans, 0.35%.
Arranger: Banc of America Securities LLC.
Assessment Rate: For any Interest Period for any Loan for which the CD Rate
has been selected, the assessment rate per annum (adjusted upward, if
necessary, to the nearest 1/100 of 1%) determined by the Agent on the first
day of such Interest Period for determining the then current annual
assessment payable by Lenders to the Federal Deposit Insurance Corporation
(or any successor thereto) for such Corporation's (or successor's) insuring
U.S. dollar time deposits of a Lender in the United States. The CD Rate
shall be adjusted automatically on and as of the effective date of any
change in the Assessment Rate.
Assignee: Has the meaning specified in Section 10.8.
Attorney Costs: Without duplication, (1) all fees and disbursements of any
law firm or other external counsel, and (2) the allocated cost of internal
legal services and all disbursements of internal counsel.
Bankruptcy Code: The Federal Bankruptcy Reform Act of 1978 (11
U.S.C.ss.101, et seq.).
Base Rate: For any day, the higher of: (a) 0.50% per annum above the
Federal Funds Rate; and (b) the rate of interest in effect for such day as
publicly announced from time to time by BofA in San Francisco, California,
as its "Reference Rate." (The "Reference Rate" is a rate set by BofA based
upon various factors including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such announced
rate.) Any change in the Reference Rate announced by BofA shall take effect
at the opening of business on the day specified in the public announcement
of such change.
Base Rate Loan: A Revolving Loan or Term Loan that bears interest based on
the Base Rate.
BofA: Bank of America National Trust and Savings Association, a national
banking association.
Borrowing: A borrowing hereunder consisting of Revolving Loans or Term
Loans of the same Type made to the Borrower on the same day by the Lenders
under Article II and, other than in the case of a Base Rate Loan or Federal
Funds Rate Loan, having the same Interest Period.
Borrowing Advice: A written request made by the Borrower with respect to
any Loan substantially in the form of Exhibit B specifying the information
required in Section 2.4 hereof and executed by the Borrower from time to
time.
Borrowing Agreements: The bilateral Credit Agreements (364-Day Commitment)
each dated June 26, 1998 between the Borrower and the banks listed in
Schedule 2.
Borrowing Date: Any date on which a Borrowing occurs under Section 2.4.
Broker Subsidiary: Charles Schwab & Co., Inc., a California corporation,
and its successors and assigns.
Business Day: A day other than a Saturday, Sunday or any other day on which
commercial banks are authorized or required to close in California or New
York and, if the applicable Business Day relates to a Eurodollar Rate Loan,
means such a day on which dealings are carried on in the applicable
offshore dollar interbank market.
Capital Adequacy Regulation: Any guideline, directive or requirement of any
central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
CD Rate: For any Interest Period for any Loan for which the CD Rate has
been selected or is applicable, the sum of:
(a) the Assessment Rate for the Interest Period, plus
(b) the rate per annum obtained by dividing (i) the rate of interest per
annum determined by the Agent to be (aa) the average (adjusted upward, if
necessary, to the nearest 1/16 of 1%) rate per annum at which bids are
received by the Agent for its certificates of deposit as at 11:00 a.m. New
York City time (or as soon as practicable thereafter), on the first day of
an Interest Period from two or more New York City certificate of deposit
dealers of recognized standing selected by the Agent for the purchase at
face value of such certificates of deposit in an amount comparable to the
Loan for which the CD Rate has been selected and having a maturity
comparable to such Interest Period or (bb) in the event the Agent cannot,
without undue effort, obtain rates, the certificate of deposit rate as
reported for the date of the Borrowing Advice in "Federal Reserve
Statistical Release--Selected Interest Rates-H.15(519)," published by the
Board of Governors of the Federal Reserve System, or any successor
publication, under the caption "CDs (Secondary Market)" having a maturity
most closely approximating the conclusion of such Interest Period, by (ii)
a percentage (expressed as a decimal) equal to 1.00 minus the CD Rate
Reserve Percentage.
CD Rate Reserve Percentage: For any Interest Period for any Loan for which
the CD Rate has been selected or is applicable, the percentage (expressed
as a decimal) as calculated by the Agent that is in effect on the first day
of such Interest Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the maximum
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) for Agent as a member of the Federal
Reserve System, in respect of new non-personal time deposits in U.S.
Dollars in the United States having a maturity comparable to the applicable
Interest Period for said Loan for which the CD Rate has been selected
(BofA's reserve ratio on such time deposits in effect on June 25, 1999 was
0%). The CD Rate shall be adjusted automatically on and as of the effective
date of any change in the CD Rate Reserve Percentage.
CD Rate Loan: A Revolving Loan or Term Loan that bears interest based on
the CD Rate.
Change in Control: The consummation of a reorganization, merger or
consolidation by the Borrower or the sale or other disposition of all or
substantially all of the assets of the Borrower (a "Business Combination"),
unless, following such Business Combination, (i) no person or entity
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Borrower or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 35% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation (except to the extent that such ownership
existed prior to the Business Combination); and (ii) at least a majority of
the members of the board of directors of the corporation resulting from
such Business Combination were members of the board of directors of the
Borrower as of the time of the action of the board of directors of the
Borrower providing for such Business Combination.
Closing Date: The date on which all conditions precedent set forth in
Section 4 are satisfied or waived by all Lenders or, in the case of
subsection 4.1(g), waived by the person entitled to receive such payment.
Code: The Internal Revenue Code of 1986, as amended, and Regulations
promulgated thereunder.
Commitment: Has the meaning specified in Section 2.9(b).
Commitment Fee: Has the meaning specified in Section 2.1.
Controlled Subsidiary: Any corporation 80% of whose voting stock (except
for any qualifying shares) is owned directly or indirectly by the Borrower.
Conversion/ Continuation Date: Any date on which under Section 2.5, the
Borrower (a) converts Loans of one Type to another Type, or (b) continues
as Loans of the same Type, but with a new Interest Period, Loans having
Interest Periods expiring on such date.
Credit: The aggregate amount of the Commitments of all Lenders to make
Revolving Loans under the Revolving Credit Facility and Term Loans under
the Term Loan Facility in an amount not to exceed $600,000,000.
Default: Any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
Dollars, dollars, and $: Each mean lawful money of the United States.
Effective Amount: With respect to any Revolving Loans and Term Loans on any
date, the aggregate outstanding principal amount thereof after giving
effect to any Borrowings and prepayments or repayments of Revolving Loans
and Term Loans occurring on such date.
Eligible Assignee: (i) A commercial bank organized under the laws of the
United States, or any state thereof, and having total equity capital of at
least $1,000,000,000 and a senior debt rating of a least "A" by Standard &
Poor's Corporation or at least "A-2" by Moody's Investors Service, Inc. or,
if not rated by either of the foregoing organizations, an equivalent rating
from a nationally recognized statistical rating organization; or (ii) a
commercial bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and Development (the
OECD), or a political subdivision of any such country, and having total
equity capital of at least $1,000,000,000 and a senior debt rating of at
least "A" by Standard & Poor's Corporation or at least "A-2" by Moody's
Investors Service, Inc., or, if not rated by either of the foregoing
organizations, an equivalent rating from a nationally recognized
statistical rating organization; provided that such bank is acting through
a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD in the United States.
Eurodollar Rate: The rate obtained by dividing (i) the average rate per
annum at which deposits of U.S. dollars for the selected Interest Period
and in the amount of the Revolving Loan or Term Loan for which the
Eurodollar Rate has been selected are offered (a) if at least two such
offered rates appear on the Reuters Screen LIBO Page as at 11:00 a.m.
(London time) two Eurodollar Business Days prior to the commencement of the
relevant Interest Period, the arithmetic mean (adjusted upward, if
necessary, to the nearest 1/16 of 1%), of such offered rates by Agent, or
(b) if fewer than two offered rates appear, in immediately available funds
to the Agent in the London interbank market (adjusted upward, if necessary,
to the nearest 1/16 of 1%) as at 11:00 a.m. (London time) two Business Days
prior to the commencement of the relevant Interest Period, determined by
Agent, by (ii) a percentage (expressed as a decimal) equal to 1.00 minus
the Eurodollar Rate Reserve Percentage.
Eurodollar Rate Loan: A Revolving Loan or Term Loan that bears interest
based on the Eurodollar Rate.
Eurodollar Rate Reserve Percentage: For any Interest Period for any Loan
for which the Eurodollar Rate has been selected or is applicable, the
percentage (expressed as a decimal) as calculated by the Agent that is in
effect on the first day of such Interest Period, as prescribed by the Board
of Governors of the U.S. Federal Reserve System (or any successor), for
determining reserve requirements to be maintained by the Agent under
Regulation D (or any successor regulation thereof) as amended to the date
hereof (including such reserve requirements as become applicable to the
Agent pursuant to phase-in or other similar requirements of Regulation D at
any time subsequent to the date hereof) in respect of "Eurocurrency
liabilities" (as defined in Regulation D). The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Rate Reserve Percentage.
Event of Default: Any of the events or circumstances specified in Section
8.1.
Exchange Act: The Securities and Exchange Act of 1934, as amended, and
regulations promulgated thereunder.
Federal Funds Rate: For any day, the interest rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York.
Federal Funds Effective Rate: For any day, an interest rate per annum equal
to the arithmetic mean as determined by the Agent of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, received by the Agent by
each of three Federal funds brokers of recognized standing in New York City
prior to 11:00 a.m. (San Francisco time) selected by Agent in its sole
discretion.
Federal Funds Rate Loan: A Revolving Loan or Term Loan that bears interest
based on the Federal Funds Effective Rate.
Fee Letter: Has the meaning specified in Section 2.9(a).
FRB: The Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
GAAP: Generally accepted accounting principles set forth from time to time
in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the U.S.
accounting profession), which are applicable to the circumstances as of the
date of determination.
Governmental Authority: Any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
Indebtedness: Indebtedness, as to any corporation, means any obligation of,
or guaranteed or assumed by, such corporation for (i) borrowed money
evidenced by bonds, debentures, notes or other similar instruments, (ii)
the deferred purchase price of property or services (excluding trade and
other accounts payable), (iii) the leasing of tangible personal property
under leases which, under any applicable Financial Accounting Standards
Board Statement, have been or should be recorded as capitalized leases, or
(iv) direct or contingent obligations under letters of credit issued for
the account of such corporation.
Indemnified Liabilities: Has the meaning specified in Section 10.5.
Indemnified Person: Has the meaning specified in Section 10.5.
Insolvency Proceeding: (a) Any case, action or proceeding before any court
or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other similar
arrangement in respect of its creditors generally or any substantial
portion of its creditors, undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.
Interest Payment Date: As to any Loan other than a Base Rate Loan or Fed
Funds Rate Loan, the last day of each Interest Period applicable to such
Loan and, as to any Base Rate Loan or Federal Funds Rate Loan, the last
Business Day of each calendar quarter, provided, however, that if any
Interest Period for a Eurodollar Rate Loan exceeds three months, the date
that falls three months after the beginning of such Interest Period and
after each Interest Payment Date thereafter is also an Interest Payment
Date.
Interest Period: Any period specified in accordance with Section 2.6
hereof.
Intermediate Parent: Schwab Holdings, Inc. and its successors and assigns.
Lender: Has the meaning specified in the introductory clause hereto.
Lending Office: As to any Lender, the office or offices of such Lender
specified as its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the case may be, on Schedule 10.2, or such other office
or offices as such Lender may from time to time notify the Borrower and the
Agent.
Loan: An extension of credit by a Lender to the Borrower under Article II
in the form of a Revolving Loan or Term Loan.
Loan Document: This Agreement, any Notes, the Fee Letter, and all other
documents delivered to the Agent or any Lender in connection herewith.
Minimum Stock- holders' Equity: As of the Closing Date, and the last day of
each fiscal quarter thereafter, the greater of:
(a) $714 million, or
(b) $714 million plus 40% of the sum of cumulative Net Earnings of the
Borrower and its Subsidiaries beginning with April 1, 1999.
MSI: Mayer & Schweitzer, Inc., a New Jersey corporation, and its successors
and assigns.
Net Capital Ratio: As of the date of determination, that percentage of net
capital to aggregate debit items of any entity subject to the Net Capital
Rule 15c3-1 promulgated by the Securities Exchange Commission pursuant to
the Securities Exchange Act of 1934 and any successor or replacement rule
or regulation therefor.
Net Earnings: With respect to any fiscal period, the consolidated net
income of the Borrower and its Subsidiaries, after taking into account all
extraordinary items, taxes and other proper charges and reserves for the
applicable period, determined in accordance with U.S. generally accepted
accounting principles, consistently applied.
Note: A promissory note executed by the Borrower in favor of a Lender
pursuant to Section 2.3 in substantially the form of Exhibits A-1 and A-2.
Notice of Conversion/ Continuation: A notice in substantially the form of
Exhibit C.
Obligations: All borrowings, debts, liabilities, obligations, covenants and
duties arising under any Loan Document owing by the Borrower to any Lender,
the Agent, or any Indemnified Person, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become
due, now existing or hereafter arising.
Person: Means an individual, partnership, corporation, limited liability
company, business trust, unincorporated association, trust, joint venture
or Governmental Authority.
Pro Rata Share: As to any Lender at any time, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at such time
of such Lender's Commitment divided by the combined Commitments of all
Lenders.
Replacement Lender: Has the meaning specified in Section 3.9.
Required Lenders: At any time at least two Lenders then holding in excess
of 50% of the then aggregate unpaid principal amount of the Loans, or, if
no such principal amount is then outstanding, at least two Lenders then
having in excess of 50% of the Commitments.
Requirement of Law: As to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
Responsible Officer: Any senior vice president or more senior officer of
the Borrower, or any other officer having substantially the same authority
and responsibility; or, with respect to compliance with financial
covenants, the chief financial officer, executive vice president-finance,
controller or the treasurer of the Borrower, or any other officer having
substantially the same authority and responsibility.
Revolving Credit Facility: The revolving credit facility available to the
Borrower pursuant to Section 2.1 hereof.
Revolving Loan: Has the meaning specified in Section 2.1, and may be a Base
Rate Loan, Federal Funds Rate Loan, CD Rate Loan or a Eurodollar Rate Loan
(each a "Type" of Revolving Loan).
Revolving Note: Has the meaning specified in Section 2.3.
Revolving Termination Date: The earlier to occur of:
(a) June 23, 2000; and
(b) The date on which the Commitments terminate in accordance with the
provisions of this Agreement.
SEC: The Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.
Stockholder's Equity: As of any date of determination, Stockholders' Equity
of Borrower and its Subsidiaries as of that date determined in accordance
with U.S. generally accepted accounting principles, consistently applied.
Subsidiary: Any corporation or other entity of which a sufficient number of
voting securities or other interests having power to elect a majority of
the board of directors or other persons performing similar functions are at
the time directly or indirectly owned by the Borrower.
Term Commitment: Means Six Hundred Million Dollars $600,000,000.
Term Loan: Has the meaning specified in Section 2.2 and may be a Base Rate
Loan, Federal Funds Rate Loan, CD Rate Loan or Eurodollar Rate Loan (each a
"Type" of Term Loan).
Term Loan Facility: The term loan facility available to the Borrower
pursuant to Section 2.2 hereof.
Term Note: Has the meaning specified in Section 2.3.
Type: Has the meaning specified in the definition of "Revolving Loan."
2. THE CREDIT FACILITY
2.1. The Revolving Credit Facility. Each Lender severally agrees, on the terms
and conditions set forth herein, to make loans to the Borrower (each such
loan, a "Revolving Loan") from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date, in an
aggregate amount not to exceed at any time outstanding, together with the
principal amount of Term Loans outstanding in favor of such Lender at such
time, the amount set forth on Schedule 1 (such amount together with the
Lender's Pro Rata Share of the Term Commitment, as the same may be reduced
under Section 2.10 or as a result of one or more assignments under Section
10.8, the Lender's "Commitment"); provided, however, that, after giving
effect to any Borrowing of Revolving Loans, the Effective Amount of all
outstanding Revolving Loans shall not at any time exceed the combined
Commitments; and provided further that the Effective Amount of the
Revolving Loans, together with all Term Loans outstanding at such time, of
any Lender shall not at any time exceed such Lender's Commitment. Within
the limits of each Lender's Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.1, prepay
under Section 3.3 and reborrow under this Section 2.1.
2.2. Term Loan Facility. Each Lender severally agrees, on the terms and
conditions set forth herein, to make Loans to the Borrower during the
period from the Closing Date to June 23, 2000 in an aggregate amount not to
exceed such Lender's Pro Rata Share of the Term Commitment. The Borrower
from time to time may borrow under the Term Loan Facility (and may reborrow
any amount theretofore prepaid) until close of business on June 23, 2000,
for a term not to exceed 364 days from the date of the Borrowing. Each such
loan under the Term Loan Facility (a "Term Loan") shall be in the minimum
amount of $10,000,000 and shall become due and payable on the last day of
the term selected by the Borrower for such Term Loan (the "Term Loan
Maturity Date"), which shall in no event be later than 364 days from the
date of such Term Loan. The maximum availability under the Term Loan
Facility shall be the amount of the Credit minus the aggregate outstanding
principal amount of Revolving Loans and Term Loans made by the Lenders;
provided, however, that to the extent the proceeds of a Term Loan are used
to repay an outstanding Revolving Loan (or a portion thereof), such
Revolving Loan (or portion thereof) shall not be considered part of the
aggregate principal amount of outstanding Revolving Loans made by the
Lenders for purposes of this sentence (such maximum availability hereafter
being referred to as the "Term Loan Availability"). Under no circumstances
shall the aggregate outstanding principal amount of Term Loans and
Revolving Loans made by the Lenders exceed the Credit, and under no
circumstances shall any Lender be obligated (i) to make any Term Loan (nor
may the Borrower reborrow any amount heretofore prepaid) after June 23,
2000, or (ii) to make any Term Loan in excess of the Term Loan
Availability. Each Term Loan made hereunder shall fully and finally mature
and be due and payable in full on the Term Loan Maturity Date specified in
the Borrowing Advice for such Term Loan; provided, however, that to the
extent the Borrowing Advice for any Term Loan selects an Interest Period
that expires before the Term Loan Maturity Date specified in such Borrowing
Advice, the Borrower may from time to time select additional interest rate
options and Interest Periods (none of which shall extend beyond the Term
Loan Maturity Date for such Term Loan) by delivering a Borrowing Advice or
Notice of Conversion/Continuation, as applicable.
2.3. Evidence of Borrowing/Promissory Notes. The obligation of the Borrower to
repay the aggregate unpaid principal amount of the Revolving Loans and Term
Loans shall be evidenced by promissory notes of the Borrower (respectively
the "Revolving Note and the Term Note") in substantially the form attached
hereto as Exhibits A-1 and A-2, with the blanks appropriately completed,
payable to the order of each Lender in the principal amount of its
Commitment, bearing interest as hereinafter specified. Each Revolving Note
and Term Note shall be dated, and shall be delivered to each Lender, on the
date of the execution and delivery of this Agreement by the Borrower. Each
Lender shall, and is hereby authorized by the Borrower to, endorse on the
schedule contained on the Revolving Note and Term Note, or on a
continuation of such schedule attached thereto and made a part thereof,
appropriate notations regarding the Revolving Loans and Term Loans
evidenced by such Note as specifically provided therein and such Lender's
record shall be conclusive absent manifest error; provided, however, that
the failure to make, or error in making, any such notation shall not limit
or otherwise affect the obligations of the Borrower hereunder or under the
Revolving Note and Term Note. The Agent, by notice to the Borrower (to be
given not later than two Business Days prior to the initial Borrowing or
Term Loan hereunder) may request that Revolving Loans or Term Loans made
hereunder for which the interest calculation is to be based on the
Eurodollar Rate be evidenced by separate Revolving Notes (in the case of
Revolving Loans) and Term Notes (in the case of Term Loans), substantially
in the form of Exhibit A-1 hereto (in the case of Revolving Loans) and
Exhibit A-2 hereto (in the case of Term Loans), payable to the order of
each Lender for the account of its office, branch or affiliate it may
designate as its Lending Office.
2.4. Making of Revolving Loans and Term Loans, Borrowings; Interest Periods;
Notice. (a) Each Borrowing of Revolving Loans or Term Loans shall be made
upon Borrower's irrevocable written notice delivered to the Agent in the
form of a Borrowing Advice (which notice must be received by the Agent
prior to 9:00 a.m. San Francisco time for a CD Rate Loan, prior to 10:00
a.m. San Francisco time for a Eurodollar Rate Loan, and prior to 11:00 a.m.
San Francisco time for a Base Rate Loan or a Federal Funds Rate Loan) (i)
the same Business Day as the requested Borrowing Date in the case of Base
Rate Loans and Federal Funds Rate Loans to be made on such Business Day,
(ii) one Business Day prior to the requested Borrowing Date in the case of
CD Rate Loans, or (iii) three Business Days prior to the requested
Borrowing Date in the case of Eurodollar Rate Loans, with each Borrowing
Advice setting forth the following information:
(A) The requested Borrowing Date, which shall be a
Business Day, on which such Revolving Loan or Term
Loan is to be made;
(B) For a CD Rate Loan or a Eurodollar Loan, the duration
of the Interest Period selected in accordance with
Section 2.6 hereof (if the Borrowing Advice fails to
specify the duration of the Interest Period for any
Borrowing comprised of a Eurodollar Rate Loan or a CD
Rate Loan, such Interest Period shall be three
months);
(C) The Type of Loans comprising the Borrowing and the
interest rate option selected in accordance with
Section 2.7 hereof; and
(D) The aggregate principal amount of the Revolving Loan
or Term Loan (which shall be in an aggregate minimum
amount of $10,000,000) to which such Interest Period
and interest rate shall apply.
(b) The Agent will promptly notify each Lender of its receipt of any Borrowing
Advice and of the amount of such Lender's Pro Rata Share of that Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of each Borrowing
available to the Agent for the account of the Borrower at the Agent's
Payment Office by 1:00 p.m. San Francisco time on the Borrowing Date
requested by the Borrower in funds immediately available to the Agent. Each
Loan to the Borrower under this Agreement shall be made by 1:30 p.m. (San
Francisco time) on the date of the Requested Borrowing Date, and shall be
in immediately available funds (in the aggregate amount made available to
the Agent by the Lenders) wired to the Borrower's account at Citibank, N.A.
(Account 4055-4016) or such other account as may be designated by the
Borrower in writing.
(d) After giving effect to any Borrowing, there may not be more than ten (10)
different Interest Periods in effect.
With respect to any Borrowing having an Interest Period ending on or
before June 23, 2000, if prior to the last day of the Interest Period for such
Borrowing the Borrower fails timely to provide a Notice of
Conversion/Continuation in accordance with Section 2.5, such Borrowing shall, on
the last day of the then-existing Interest Period for such Borrowing,
automatically convert into a Base Rate Loan. In the event of any such automatic
conversion, the Borrower on the date of such conversion shall be deemed to make
a representation and warranty to the Lenders that, to the best of the Borrower's
knowledge, (i) neither the Broker Subsidiary nor MSI is in violation of minimum
net capital requirements as described in Section 7.1, (ii) the Borrower's
Stockholders' Equity is not below the Minimum Stockholders' Equity as described
in Section 7.2, and (iii) no amount owing with respect to any Commitment Fee,
any outstanding Borrowing, or any interest thereon, or any other amount
hereunder, is due and unpaid. If prior to the last day of the Interest Period
applicable to any Term Loan the Borrower fails timely to provide a Notice of
Conversion/Continuation in accordance with Section 2.5, such Term Loan shall, on
the last day of the then-existing Interest Period for such Term Loan,
automatically, have applicable to it a new Interest Period of thirty (30) days
(or, in the event there are fewer than thirty (30) days remaining to the Term
Loan Maturity Date for such Term Loan, an Interest Period of the number of days
remaining to such Term Loan Maturity Date) and shall bear interest at the Base
Rate.
2.5. Conversion and Continuation Elections.
(a) The Borrower may, upon irrevocable written notice to the Agent in
accordance with this Section 2.5:
(i) elect, as of any Business Day, in the case of Base Rate Loans or Federal
Funds Rate Loans, or as of the last day of the applicable Interest Period,
in the case of any other Type of Loan, to convert any such Loan (or any
part thereof in an amount not less than $10,000,000), into Loans of any
other Type; or
(ii) elect as of the last day of the applicable Interest Period, to continue any
Loans having Interest Periods expiring on such day (or any part thereof in
an amount not less than $10,000,000); provided, that if at any time the
aggregate amount of Eurodollar Rate Loans in respect of any Borrowing is
reduced, by payment, prepayment, or conversion of part thereof to be less
than $10,000,000, such Eurodollar Rate Loans shall automatically convert
into Base Rate Loans.
(b) The Borrower shall deliver a Notice of Conversion/Continuation to be
received by the Agent not later than 9:00 a.m. San Francisco time for a CD
Rate Loan, not later than 10:00 a.m. San Francisco time for a Eurodollar
Rate Loan, and not later than 11:00 a.m. San Francisco time for a Base Rate
Loan or a Federal Funds Rate Loan, at least (i) three Business Days in
advance of the Conversion/Continuation Date, as to any Loan that is to be
converted into or continued as a Eurodollar Rate Loan; (ii) one Business
Day in advance of the Conversion/Continuation Date as to any Loan that is
to be converted into a CD Rate Loan; and (iii) the same Business Day as the
Conversion/Continuation Date, as to any Loan that is to be converted into a
Base Rate Loan or Federal Funds Rate Loan, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of the Loan or Loans to be converted or renewed;
(C) the Type of Loan or Loans resulting from the proposed conversion or
continuation; and
(D) other than in the case of conversions into Base Rate Loans or Federal Funds
Rate Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to Eurodollar Rate
Loans or CD Rate Loans, the Borrower has failed to select timely a new
Interest Period to be applicable to such Eurodollar Rate Loans or CD Rate
Loans, or if any Default or Event of Default then exists, the Borrower
shall be deemed to have elected to convert such Eurodollar Rate Loans or CD
Rate Loans into Base Rate Loans effective as of the expiration date of such
Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the
Borrower, the Agent will promptly notify each Lender of the details of any
automatic conversion. All conversions and continuations shall be made
ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given as held by each Lender.
(e) Unless the Required Lenders otherwise agree, during the existence of a
Default or Event of Default, the Borrower may not elect to have a Loan
converted into or continued as a Eurodollar Rate Loan.
(f) After giving effect to any conversion or continuation of Loans, there may
not be more than ten (10) different Interest Periods in effect.
2.6. Interest Periods. The Borrower may select for any CD Rate Loan or
Eurodollar Rate Loan the Interest Period (as defined in the next sentence)
for each Borrowing, it being understood that the Borrower may request
multiple Borrowings on the same day and may select a different Interest
Period for each such Borrowing. An Interest Period shall be each period, as
selected by the Borrower in accordance with the terms of this Agreement, in
the case of each Borrowing, beginning on the Borrowing Date of such Loan or
on the Conversion/Continuation Date on which the Loan is converted into or
continued as a Eurodollar Rate Loan, and ending on the date specified by
the Borrower, subject to the following:
(a) Either 30, 60, 90 or 180 days thereafter, in the case of any Interest
Period for which the interest is to be based on the CD Rate, provided that
if the last day of an Interest Period would be a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business
Day; or
(b) the numerically corresponding day in the first, second, third or sixth
month thereafter, in the case of any Interest Period that is to be based on
the Eurodollar Rate, provided that if the last day of an Interest Period
would be a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless such next succeeding
Business Day is in a different calendar month, in which case such interest
period shall end on the next preceding Business Day; provided, however,
that (i) no Interest Period applicable to any Revolving Loan shall extend
beyond the Revolving Termination Date; and (ii) no Interest Period
applicable to any Term Loan shall extend beyond the Term Loan Maturity Date
specified in the Borrowing Advice for such Term Loan, which in no event
shall be later than June 22, 2001.
2.7. Interest Rates.
(a) Each Revolving Loan and each Term Loan, while outstanding, shall bear
interest from the applicable Borrowing Date at a rate per annum equal to
the Eurodollar Rate, the CD Rate, the Federal Funds Rate, or the Base Rate,
as the case may be, (and subject to the Borrower's right to convert to
other Types of Loans under Section 2.5) plus the Applicable Margin.
(b) Interest on each Revolving Loan and Term Loan shall be paid in arrears on
each Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Loans under Section 3.3 for the portion of the Loan so
prepaid and upon payment (including prepayment) in full thereof, and,
during the existence of any Event of Default interest shall be paid on
demand of the Agent at the request or with the consent of the Required
Lenders.
(c) After the principal amount of any Revolving Loan or Term Loan, accrued
interest upon such Loan, the commitment fee, or any other amount hereunder
shall have become due and payable by acceleration, or otherwise, it shall
thereafter (until paid) bear interest, payable on demand, (i) until the end
of the Interest Period with respect to such Loan at a rate per annum equal
to 1% per annum in excess of the rate or rates in effect with respect to
such Loan and (ii) thereafter, at a rate per annum equal to 1% per annum in
excess of the Base Rate.
2.8. Substitute Rates. If upon receipt by the Agent of a Borrowing Advice
relating to any Borrowing or of a Notice of Conversion/Continuation:
(a) the Agent shall determine that by reason of changes affecting the New York
City certificate of deposit market and/or the London interbank market,
adequate and reasonable means do not exist for ascertaining the applicable
CD Rate and/or Eurodollar Rate, respectively, with respect to any Interest
Period; or
(b) the Agent shall determine that by reason of any change since the date
hereof in any applicable law or governmental regulation (other than any
such change in the regulations described in the definition of Eurodollar
Rate Reserve Percentage in Article I hereof), guideline or order (or any
interpretation thereof), the adoption or enactment of any new law or
governmental regulation or order or any other circumstance affecting the
Lenders or the New York City certificate of deposit market and/or the
London interbank market, the CD Rate and/or Eurodollar Rate, shall no
longer represent the effective cost to the Lenders of certificates of
deposit and/or of U.S. dollar deposits, respectively, in the relevant
amount and for the relevant period; or
(c) Agent shall determine that, as a result of any change since the date hereof
in any applicable law or governmental regulation or as a result of the
adoption of any new applicable law or governmental regulation, the
applicable CD Rate and/or Eurodollar Rate, would be unlawful; then, the
Agent will promptly so notify the Borrower and each Lender, whereupon, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans or CD
Rate Loans, as the case may be, hereunder shall be suspended until the
Agent upon the instruction of the Required Lenders revokes such notice in
writing. Upon receipt of such notice, the Borrower may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it and, at
its election, submit a Borrowing Advice or Notice of
Conversion/Continuation selecting another Type of Loan. If the Borrower
does not revoke such Notice or give a Notice as provided herein, the
Lenders shall make, convert or continue the Loans, as proposed by the
Borrower in the amount specified in the applicable notice submitted by the
Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of Eurodollar Rate Loans or CD Rate Loans, as the case may
be.
2.9. Fees. The Borrower agrees to pay the following fees:
(a) Arrangement, Agency Fees. The Borrower shall pay an arrangement fee to the
Arranger for the Arranger's account, and shall pay an agency fee to the
Agent for the Agent's account, as required by the Letter Agreement ("Fee
Letter") between the Borrower, the Agent and the Arranger dated May 20,
1999.
(b) Commitment Fee. The Borrower shall pay to the Agent for the account of each
Lender a commitment fee (the "Commitment Fee") on the actual daily unused
portion of such Lender's Commitment computed on a quarterly basis in
arrears on the last Business Day of each quarter based upon the daily
utilization for that quarter as calculated by the Agent, equal to nine-one
hundredths of one percent (0.09%) per annum. For purposes of calculating
utilization under this subsection, the Commitments shall be deemed used to
the extent of the Effective Amount of Revolving Loans and Term Loans then
outstanding. Such Commitment Fee shall accrue from the Closing Date to the
Revolving Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each quarter commencing on the quarter
ending September 30, 1999 through the Revolving Termination Date, with the
final payment to be made on the Revolving Termination Date; provided that,
in connection with any reduction or termination of Commitments under
Section 2.10, the accrued commitment fee calculated for the period ending
on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the
basis of the period from such reduction or termination date to such
quarterly payment date.
(c) Utilization Fee. The Borrower shall pay to the Agent for the account of
each Lender quarterly in arrears commencing upon June 30, 1999 a
utilization fee equal to seventy-five one thousandths of one percent
(0.075%) per annum on the aggregate amount of outstanding Revolving Loans
and Term Loans, provided that the outstanding amount of such Loans exceeds
fifty percent (50%) of the aggregate amount of all the Commitments of the
Lenders to the Borrower.
2.10.Reduction of Credit. The Borrower, from time to time, upon at least three
(3) Business Days' written notice to the Agent, may terminate the
commitments, or permanently reduce the Commitments by an aggregate minimum
amount of $10,000,000, without penalty or premium; unless after giving
effect thereto and to any prepayments of Loans made on the effective date
thereof, the Effective Amount of all Revolving Loans and Term Loans
together would exceed the amount of the combined Commitments then in
effect. Once reduced in accordance with this Section, the Commitments may
not be increased. Any reduction of the Commitments shall be applied to each
Lender's Commitment according to its Pro Rata Share. All accrued Commitment
Fees to, but not including, the effective date of any reduction or
termination of Commitments, shall be paid on the effective date of such
reduction or termination. During the continuation of the Credit, the
computation of the Commitment Fee and the Lenders' obligations to make
Revolving Loans or Term Loans shall be based upon such reduced Commitments.
In the event the Credit shall be reduced to zero pursuant to this Section,
the Credit shall be deemed terminated, and any Commitment Fee or any other
amount payable hereunder then accrued shall become immediately payable.
Such termination of the Credit shall terminate the Borrower's obligations
with respect to the Commitment Fee to the extent not theretofore accrued
and shall terminate the Lenders' obligations to make any further Revolving
Loans or Term Loans under this Agreement.
2.11.Termination Date; Extensions. The termination date of each Lender's
Commitment with respect to the Credit (the "Termination Date"), including
both the Revolving Credit Facility under Section 2.1 hereof and the Term
Loan Facility under Section 2.2 hereof, is initially June 23, 2000. At any
time no earlier than forty-five (45) days and no later than thirty (30)
days prior to the Termination Date then in effect (whether the initial
Termination Date of June 23, 2000 or any later Termination Date as extended
under this Section 2.11), the Borrower may, by written notice to the Agent
in the form attached as Exhibit D hereto, request that the Termination Date
be extended for a period of 364 calendar days. Such request shall be
irrevocable and binding upon the Borrower. In no event will any Lender
agree to approve any extension more than thirty (30) days before the
Termination Date then in effect. If each Lender agrees to so extend its
Commitment and the Termination Date, the Agent shall evidence such
agreement by executing and returning to the Borrower a copy of the
Borrower's written request countersigned by the Agent and delivered to the
Borrower by the Bank no later than fifteen (15) days after the Agent's
receipt of the Borrower's written request. If the Agent fails to so respond
to and accept the Borrower's request for extension of the Termination Date
then in effect, the Lenders' Commitments shall be terminated on the
Termination Date then in effect. If, on the other hand, the Agent so
responds to and accepts the Borrower's request for extension of the
Termination Date, then upon receipt by the Borrower of a copy of the
Borrower's written request countersigned by the Agent, (i) the Lenders'
Commitments then in effect and the Termination Date then in effect shall
automatically be extended for the 364-day period specified in such written
request, and (ii) each reference in this Agreement to "June 23, 2000", and
"June 22, 2001" (and any prior extension thereof pursuant to this Section
2.11) also shall automatically be correspondingly extended for 364 days.
2.12. Payments by the Lenders to the Agent.
(a) Unless the Agent receives notice from a Lender on or prior to the Closing
Date or, with respect to any Borrowing after the Closing Date, at least one
Business Day in the case of a Eurodollar Rate Loan or CD Rate Loan, or, in
the case of a Base Rate Loan or Federal Funds Rate Loan, prior to noon
(12:00) San Francisco time on the date of such Borrowing, that such Lender
will not make available as and when required hereunder to the Agent for the
account of the Company the amount of that Lender's Pro Rata Share of the
Borrowing, the Agent may assume that each Lender has made such amount
available to the Agent in immediately available funds on the Borrowing Date
and the Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent any Lender shall not have made its full amount
available to the Agent in immediately available funds and the Agent in such
circumstances has made its full amount available to the Borrower such
Lender shall on the Business Day following such Borrowing Date make such
amount available to the Agent, together with interest at the Federal Funds
Rate for each day during such period. A notice of the Agent submitted to
any Lender with respect to amounts owing under this subsection (a) shall be
conclusive, absent manifest error. If such amount is so made available,
such payment to the Agent shall constitute such Lender's Loan on the date
of Borrowing for all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the Borrowing Date,
the Agent will notify the Borrower of such failure to fund and, upon demand
by the Agent, the Borrower shall pay such amount to the Agent for the
Agent's account, together with interest thereon for each day elapsed since
the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any Borrowing Date shall not
relieve any other Lender of any obligation hereunder to make a Loan on such
Borrowing Date, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on any
Borrowing Date.
2.13.Sharing of Payments, Etc. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of its Pro Rata Share, such Lender
shall immediately (a) notify the Agent of such fact, and (b) purchase from
the other Lenders such participation in the Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment pro
rata with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender,
such purchase shall to that extent be rescinded and each other Lender shall
repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender's ratable share (according to
the proportion of (i) the amount of such paying Lender's required repayment
to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any
Lender so purchasing a participation from another Lender may, to the
fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.5) with respect
to such participation as fully as if such Lender were the direct creditor
of the Borrower in the amount of such participation. The Agent will keep
records (which shall be conclusive and binding in the absence of manifest
error) of participation purchased under this Section and will in each case
notify the Lenders following any such purchase or repayment.
2.14.Computation of Fees and Interest. All computations of interest for Base
Rate Loans when the Base Rate is determined by Bank of America's "Reference
Rate" shall be made on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed. All other computations of interest, and
all computation of fees under Section 2.9(b) and (c) shall be made on the
basis of a 360-day year and actual days elapsed. Interest and such fees
shall accrue during each period during which interest or such fees are
computed from and including the first day thereof to and excluding the last
day thereof.
3. PAYMENT
3.1. Repayment
(a) The Term Credit. The Borrower shall repay to the Agent for the account of
the Lenders the aggregate principal amount of the Term Loans outstanding on
each Term Loan Maturity Date, as applicable.
(b) The Revolving Credit. The Borrower shall repay to the Agent, for the
account of the Lenders, on the Revolving Termination Date the aggregate
principal amount of Revolving Loans outstanding on such date.
3.2. Method of Payment. All payments hereunder and under the Revolving Note and
the Term Note shall be payable in lawful money of the United States of
America and in immediately available funds not later than 12:00 noon (San
Francisco time) on the date when due at the principal office of the Agent
or at such other place as the Agent may, from time to time, designate in
writing to the Borrower.
3.3. Optional Prepayment. Subject to Section 3.7, the Borrower shall be entitled
at any time or from time to time, upon not less than one (1) Business Day
irrevocable notice to the Agent, to ratably prepay Loans in whole or in
part in minimum amounts of $10,000,000 without premium or penalty. Each
notice of payment shall specify the date and aggregate principal amount of
any such prepayment and the Type(s) of Loans to be repaid. The Agent will
promptly notify each Lender of its receipt of any such Notice and of such
Lender's Pro Rata Share of such prepayment. If such Notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount,
specified in such Notice shall be due and payable on the date specified
therein, together with all accrued interest to each such date on the amount
prepaid, and any amounts required in accordance with Section 3.7 hereof as
a result of such prepayment.
3.4. Taxes/Net Payments. All payments by Borrower hereunder and under the
Revolving Note and the Term Note to the Agent or any Lender shall be made
without set-off or counterclaim and in such amounts as may be necessary in
order that all such payments, after deduction or withholding for or on
account of any present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any Governmental Authority or
taxing authority thereof (collectively, "Taxes"), shall not be less than
the amounts otherwise specified to be paid under this Agreement. The
Borrower shall pay all Taxes when due and shall promptly send to the Lender
original tax receipts or copies thereof certified by the relevant taxing
authority together with such other documentary evidence with respect to
such payments as may be required from time to time by the Agent. If the
Borrower fails to pay any Taxes to the appropriate taxing authorities when
due or fails to remit to the Agent or Lender any such original tax receipts
or certified copies thereof as aforesaid or other required documentary
evidence, the Borrower shall indemnify the Agent or Lender within thirty
(30) days of demand by the Lender or Agent for any taxes, interest or
penalties that may become payable by the Agent or Lender as a result of
such failure.
Notwithstanding the foregoing, (i) the Borrower shall not be liable for the
payment of any tax on or measured by the net income of any Lender pursuant
to the laws of the jurisdiction where an office of such Lender making any
loan hereunder is located or does business, and (ii) the foregoing
obligation to gross up the payments to any Lender so as not to deduct or
offset any withholding taxes or Taxes paid or payable by the Borrower with
respect to any payments to such Lender shall not apply (x) to any payment
to any Lender which is a "foreign corporation, partnership or trust" within
the meaning of the Code if such Lender is not, on the date hereof (or on
the date it becomes a Lender under this Agreement pursuant to the
assignment terms of this Agreement), or on any date hereafter that it is a
Lender under this Agreement, entitled to submit either a Form 1001 or any
successor form thereto (relating to such Lender and entitling it to a
complete exemption from withholding on all interest to be received by it
hereunder in respect of the Loans) or Form 4224 or any successor form
thereto (relating to all interest to be received by such Lender hereunder
in respect of the Loans) of the U.S. Department of Treasury, or (y) to any
item referred to in the preceding sentence that would not have been imposed
but for the failure by such Lender to comply with any applicable
certification, information, documentation or other reporting requirements
concerning the nationality, residence, identity or connections of such
Lender with the United States if such compliance is required by statute or
regulation of the United States as a precondition to relief or exemption
from such item.
3.5. Illegality.
(a) If any Lender determines that the introduction of any Requirement of Law,
or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make
Eurodollar Rate Loans, then, on notice thereof by the Lender to the
Borrower through the Agent, any obligation of that Lender to make
Eurodollar Rate Loans shall be suspended until the Lender notifies the
Agent and the Borrower that the circumstances giving rise to such
determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any Eurodollar Rate
Loan, the Borrower shall, upon its receipt of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such
Eurodollar Rate Loans of that Lender then outstanding, together with
interest accrued thereon and amounts required under Section 3.7, either on
the last day of the Interest Period thereof, if the Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such
Eurodollar Rate Loan. If the Borrower is required to so prepay any
Eurodollar Rate Loan, then concurrently with such prepayment, the Borrower
shall borrow from the affected Lender, in the amount of such repayment, a
Base Rate Loan, CD Rate Loan, or Federal Funds Rate Loan, subject to any
applicable notice for a CD Rate Loan.
(c) If the obligation of any Lender to make or maintain Eurodollar Rate Loans
has been so terminated or suspended, the Borrower may elect, by giving
notice to the Lender through the Agent that all Loans which would otherwise
be made by the Lender as Eurodollar Rate Loans shall be instead Base Rate
Loans, CD Rate Loans, or Federal Funds Rate Loans, subject to any
applicable notice for a CD Rate Loan.
(d) Before giving any notice to the Agent under this Section, the affected
Lender shall designate a different Lending Office with respect to its
Eurodollar Rate Loans if such designation will avoid the need for giving
such notice or making such demand and will not, in the judgment of the
Lender, be illegal or otherwise disadvantageous to the Lender.
3.6. Increased Costs and Reduction of Return.
(a) If any Lender determines that, due to either (i) the introduction of or any
change (other than any change by way of imposition of or increase in
reserve requirements included in the calculation of the Eurodollar Rate) in
or in the interpretation of any law or regulation or (ii) the compliance by
that Lender with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or
making, funding or maintaining any Eurodollar Rate Loan, then the Borrower
shall be liable for, and shall from time to time, upon demand (with a copy
of such demand to be sent to the Agent), pay to the Agent for the account
of such Lender, additional amounts as are sufficient to compensate such
Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or
(iv) compliance by the Lender (or its Lending Office) or any corporation
controlling the Lender with any Capital Adequacy Regulation, affects or
would affect the amount of capital required or expected to be maintained by
the Lender or any corporation controlling the Lender and determines that
the amount of such capital is increased as a consequence of its Commitment,
Loans, credits or obligations under this Agreement then, upon demand of
such Lender to the Borrower through the Agent, the Borrower shall pay to
the Lender, from time to time as specified by the Lender, additional
amounts sufficient to compensate the Lender for the cost of such increase.
3.7. Funding Losses. The Borrower shall reimburse each Lender and hold each
Lender harmless from any loss or expense which the Lender may sustain or
incur as a consequence of:
(a) the failure of the Borrower to make on a timely basis any payment of
principal of any Eurodollar Rate Loan;
(b) the failure of the Borrower to borrow, continue or convert a Loan after the
Borrower has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/Continuation;
(c) the failure of the Borrower to make any prepayment in accordance with any
notice delivered under Section 3.3;
(d) the prepayment or other payment (including after acceleration thereof) of
any Eurodollar Rate Loan or CD Rate Loan on a day that is not the last day
of the relevant Interest Period; or
(e) the automatic conversion under Section 2.5 of any Eurodollar Rate Loan or
CD Rate Loan to a Base Rate Loan on a day that is not the last day of the
relevant Interest Period, including any such loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain its
Eurodollar Rate Loans or CD Rate Loans or from fees payable to terminate
the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Borrower to the Lenders under this
Section and under subsection 3.6(a), (i) each Eurodollar Rate Loan made by
a Lender and each related reserve, special deposit or similar requirement
shall be conclusively deemed to have been funded at the LIBO-based rate
used in determining the Eurodollar Rate for such Eurodollar Rate Loan by a
matching deposit or other borrowing in the interbank eurodollar market for
a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan is in fact so funded, and (ii) each CD Rate Loan made
by a Lender and each related reserve, special deposit or similar
requirement shall be conclusively deemed to have been funded at the rate
described in subsection (b)(i)(bb) of the CD Rate definition in Section 1
of this Agreement by a matching deposit or other borrowing in the CD
market, for a comparable amount and for a comparable period, whether or not
such CD Rate Loan is in fact so funded.
3.8. Certificates of Lenders. Any Lender claiming reimbursement or compensation
under this Article III shall deliver to the Borrower (with a copy to the
Agent) a certificate setting forth in reasonable detail the amount payable
to the Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
3.9. Substitution of Lenders. Upon the receipt by the Borrower from any Lender
(an "Affected Lender") of a claim for compensation under Section 3.6, the
Borrower may: (i) request the Affected Lender to use its best efforts to
obtain a replacement bank or financial institution satisfactory to the
Borrower to acquire and assume all or a ratable part of all of such
Affected Lender's Loans and Commitment (a "Replacement Lender"); (ii)
request one or more of the other Lenders to acquire and assume all or part
of such Affected Lender's Loans and Commitment; or (iii) designate a
Replacement Lender. Any such designation of a Replacement Lender under
clause (ii) or (iii) shall be subject to the prior written consent of the
Agent (which consent shall not be unreasonably withheld).
3.10.Survival. The agreements and obligations of the Borrower in this Article
III shall survive the payment of all other Obligations.
4. CONDITIONS
4.1. Conditions Precedent to the Effectiveness of this Agreement. The obligation
of each Lender to make its initial Credit Extension is subject to the
condition that the Agent has received on or before the Closing Date all of
the following in form and substance satisfactory to the Agent and each
Lender, in sufficient copies for each Lender;
(a) This Agreement and the Notes executed by each party thereto.
(b) A copy of a resolution or resolutions adopted by the Board of Directors or
Executive Committee of the Borrower, certified by the Secretary or an
Assistant Secretary of the Borrower as being in full force and effect on
the date hereof, authorizing the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby, and a copy of the Certificate of Incorporation and the By-Laws of
the Borrower, similarly certified.
(c) A certificate, signed by the Secretary or an Assistant Secretary of the
Borrower and dated the date hereof, as to the incumbency of the person or
persons authorized to execute and deliver this Agreement.
(d) A certificate signed by the Chief Financial Officer of the Borrower that,
as of the date hereof, there has been no material adverse change in its
consolidated financial condition since December 31, 1998 not reflected on
its Quarterly Report on Form 10-Q filed with the SEC for the period ending
March 31, 1999.
(e) A certificate, signed by the Secretary or an Assistant Secretary of the
Borrower and dated the date hereof, as to the persons authorized to execute
and deliver a Borrowing Advice, a Notice of Conversion/Continuation, and
the Revolving Notes and the Term Notes. The Agent and each Lender may rely
on such certificate with respect to the Revolving Loans and Term Loans
hereunder unless and until it shall have received an updated certificate
and, after receipt of such updated certificate, similarly may rely thereon.
(f) A written opinion, dated the date hereof, of counsel for the Borrower, in
the form of Exhibit E.
(g) Evidence of payment by the Borrower of all accrued and unpaid fees, costs
and expenses to the extent then due and payable on the Closing Date,
together with Attorney Costs of BofA to the extent invoiced prior to or on
the Closing Date, plus such additional amounts of Attorney Costs as shall
constitute BofA's reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude final settling of accounts between the
Borrower and BofA); including any such costs, fees and expenses arising
under or referenced in Sections 2.9 and 10.4.
(h) Certificate of a Responsible Officer certifying to the Agent and Lenders to
the effect that (i) the Borrower has no intention of Borrowing prior to the
Termination Date of any Borrowing Agreement; (ii) all obligations due and
owing under the Borrowing Agreements have been paid in full and discharged;
and (iii) the Borrower intends that the Borrowing Agreements shall
terminate pursuant to their terms and the credit facility evidenced thereby
replaced by this Agreement.
4.2. Conditions Precedent to Revolving Loans and Term Loans. The obligation of
each Lender to make any Revolving Loan or Term Loan to be made by it
(including its initial Revolving Loan), or to continue or convert any Loan
under Section 2.5 is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or
Conversion/Continuation Date.
The Agent shall have received a Borrowing Advice or a Notice of
Conversion/Continuation, as applicable. Each Borrowing Advice or Notice of
Conversion/Continuation given by the Borrower shall be deemed to be a
representation and warranty by the Borrower to each Lender, effective on
and as of the date of such Notice and as of such Borrowing Date for a
Revolving Loan or Term Loan covered thereby, that (i) the representations
and warranties set forth in Article 5 hereof are true and correct as of
such date, and (ii) no Event of Default, and no event which with the lapse
of time or notice or both would become an Event of Default, has occurred
and is continuing. No Lender shall be required to make any Loan hereunder
if:
(a) the Credit, the Revolving Credit Facility (in the case of a Revolving Loan)
or the Term Loan Facility (in the case of a Term Loan) has been terminated;
or
(b) any of the representations or warranties of the Borrower set forth in
Article 5 hereof shall prove to have been untrue in any material respect
when made, or when any Event of Default or any event that, upon lapse of
time or notice or both, would become an Event of Default as defined in
Article 8, has occurred; or
(c) the Broker Subsidiary or MSI is in violation of minimum net capital
requirements as described in Section 7.1; or
(d) the Borrower's Stockholder's Equity is below the Minimum Stockholders'
Equity as described in Section 7.2; or
(e) any amount owing with respect to any Commitment Fee or any outstanding
Revolving Loan or Term Loan or any interest thereon or any other amount
payable hereunder is due and unpaid.
5. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and each Lender, as of
the date of delivery of this Agreement and as of the date of any Revolving Loan
or Term Loan, as follows:
5.1. Organization and Good Standing. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the
state of Delaware and has full power, authority and legal right and has all
governmental licenses, authorizations, qualifications and approvals
required to own its property and assets and to transact the business in
which it is engaged; and all of the outstanding shares of capital stock of
Borrower have been duly authorized and validly issued, are fully paid and
non-assessable.
5.2. Corporate Power and Authority. The Borrower has full power, authority and
legal right to execute and deliver, and to perform its obligations under,
this Agreement, and to borrow hereunder, and has taken all necessary
corporate and legal action to authorize the borrowings hereunder on the
terms and conditions of this Agreement and to authorize the execution and
delivery of this Agreement, and the performance of the terms thereof.
5.3. Enforceability. This Agreement has been duly authorized and executed by the
Borrower, and when delivered to the Lenders will be a legal, valid and
binding agreement of the Borrower, enforceable against the Borrower in
accordance with its terms, except, in each case, as enforcement thereof may
be limited by bankruptcy, insolvency or other laws relating to or affecting
enforcement of creditors' rights or by general equity principles.
5.4. No Violation of Laws or Agreements. The execution and delivery of this
Agreement by the Borrower and the performance of the terms hereof will not
violate any provision of any law or regulation or any judgment, order or
determination of any court or governmental authority or of the charter or
by-laws of, or any securities issued by, the Borrower or any provision of
any mortgage, indenture, loan or security agreement, or other instrument,
to which the Borrower is a party or which purports to be binding upon it or
any of its assets in any respect that reasonably could be expected to have
a material adverse effect on the Borrower and its Subsidiaries taken as a
whole on a consolidated basis; nor will the execution and the delivery of
this Agreement by the Borrower and the performance of the terms hereof
result in the creation of any lien or security interest on any assets of
the Borrower pursuant to the provisions of any of the foregoing.
5.5. No Consents. Except as disclosed in writing by Borrower, no consents of
others (including, without limitation, stockholders and creditors of the
Borrower) nor any consents or authorizations of, exemptions by, or
registrations, filings or declarations with, any Governmental Authority are
required to be obtained by the Borrower in connection with the execution
and delivery of this Agreement and the performance of the
terms thereof.
5.6. Financial Statements. The consolidated financial statements of the Borrower
contained in the documents previously delivered to each Lender have been
prepared in accordance with U.S. generally accepted accounting principles
and present fairly the consolidated financial position of the Borrower.
5.7. Broker Subsidiary Licenses, Etc. The Broker Subsidiary possesses all
material licenses, permits and approvals necessary for the conduct of its
business as now conducted and as presently proposed to be conducted as are
required by law or the applicable rules of the SEC and the National
Association of Securities Dealers, Inc.
5.8. Broker Subsidiary/Broker Registration. The Broker Subsidiary is registered
as a broker-dealer under the Securities Exchange Act of 1934, as amended.
5.9. Broker Subsidiary/SIPC. The Broker Subsidiary is not in arrears with
respect to any assessment made upon it by the Securities Investor
Protection Corporation, except for any assessment being contested by the
Broker Subsidiary in good faith by appropriate proceedings and with respect
to which adequate reserves or other provisions are being maintained to the
extent required by U.S. generally accepted accounting principles.
5.10.Taxes. The Borrower has paid and discharged or caused to be paid and
discharged all taxes, assessments, and governmental charges prior to the
date on which the same would have become delinquent, except to the extent
that such taxes, assessments or charges are being contested in good faith
and by appropriate proceedings by or on behalf of the Borrower and with
respect to which adequate reserves or other provisions are being maintained
to the extent required by U.S. generally accepted accounting principles.
5.11.ERISA. The Borrower is in compliance with the provisions of and
regulations under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the Internal Revenue Code of 1986, as amended,
applicable to any pension or other employee benefit plan established or
maintained by the Borrower or to which contributions are made by the
Borrower (the "Plans"). The Borrower has met all of the funding standards
applicable to each of its Plans, and there exists no event or condition
that would permit the institution of proceedings to terminate any of the
Plans under Section 4042 of ERISA. The estimated current value of the
benefits vested under each of the Plans does not, and upon termination of
any of the Plans will not, exceed the estimated current value of any such
Plan's assets. The Borrower has not, with respect to any of the Plans,
engaged in a prohibited transaction set forth in Section 406 of ERISA or
Section 4975(c) of the Internal Revenue Code of 1986.
5.12.No Extension of Credit for Default Remedy/Hostile Acquisition. The
Borrower will not use any amounts borrowed by it under this Agreement to
remedy a default under any mortgage, indenture, agreement or instrument
under which there may be issued any Indebtedness of the Borrower to any
bank or bank holding company, or their respective assignees, for borrowed
money. Further, the Borrower will not use any amounts advanced to it under
this Agreement for the immediate purpose of acquiring a company where the
Board of Directors or other governing body of the entity being acquired has
made (and not rescinded) a public statement opposing such acquisition.
5.13.Use of Proceeds/Margin Regulations. The Borrower will use the proceeds for
general corporate purposes, including, without limitation, for the back-up
of the issuance of commercial paper notes. The Borrower will not use the
proceeds of any loan provided hereby in such a manner as to result in a
violation of Regulations T, U or X of the Board of Governors of the Federal
Reserve System.
5.14.Authorized Persons. The persons named for such purpose in the certificates
delivered pursuant to Section 4.1(e) hereof are authorized to execute
Borrowing Advices.
5.15.Material Contracts. Borrower is not in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material contract, indenture, mortgage, loan agreement,
note or lease to which the Borrower is a party or by which it may be bound.
5.16.Litigation. There is no action, suit or proceeding pending against, or to
the knowledge of the Borrower, threatened against or affecting, the
Borrower or any of its Subsidiaries before any court, arbitrator,
governmental body, agency or official in which there is a significant
probability of an adverse decision which could have a material adverse
affect on the business or the financial condition of the Borrower.
5.17.Investment Company. The Borrower is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
5.18. Year 2000 Compliance.
(a) Borrower has conducted a review and assessment of the material areas of the
operations of its Broker Subsidiary that could be materially adversely
affected by the "Year 2000 problem" (that is, the risk that computer
applications may not be able properly to perform date-sensitive functions
after December 31, 1999). The Broker Subsidiary has developed a plan and
timetable (the "Y2K Compliance Plan") for addressing on a timely basis the
Year 2000 problem, as it affects Broker Subsidiary.
(b) Attached as Exhibit G is the Year 2000 Compliance Statement for Broker
Subsidiary, which describes the status of the Y2K Compliance Plan. Borrower
represents that to the best knowledge of Borrower and Broker Subsidiary,
the statements made in the Year 2000 Compliance Statement are true and
accurate as of the date of such Statement, and such statements accurately
reflect the status of the Y2K Compliance Plan of Broker Subsidiary as of
the date of such Statement.
6. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any Lender shall have a
Commitment hereunder or any Loan or other obligation hereunder shall remain
outstanding, unpaid or unsatisfied and until full payment of all amounts
due to the Lenders hereunder, it will, unless and to the extent the
Required Lenders waive compliance in writing:
6.1. Notice of Events of Default. Give prompt notice to the Agent and each
Lender, no later than three Business Days after becoming aware thereof, of
any Event of Default or any event that, upon lapse of time or notice or
both, would become an Event of Default.
6.2. Financial Statements. Deliver to the Agent, in form and detail satisfactory
to the Agent and the Required Lenders with sufficient copies for each
Lender, within ten Business Days of the filing thereof with the SEC, a copy
of each registration statement filed under the Securities Act of 1933, a
copy of each filing (including exhibits) made by the Borrower with the SEC
under the Securities Exchange Act of 1934, as amended, accompanied by a
Compliance Certificate with an attached schedule of calculations
demonstrating compliance with the Section 7.1 and 7.2 financial covenants;
and, in the event the Borrower requests an extension of any such filing
from the SEC, promptly (but not later than the second Business Day
following the filing of such request) deliver a copy of such request to the
Agent.
6.3. Insurance. Maintain and keep in force in adequate amounts such insurance as
is usual in the business carried on by the Borrower and cause the Broker
Subsidiary to maintain and keep in force in adequate amounts such insurance
as is usual in the business carried on by the Broker Subsidiary.
6.4. Books and Records. Maintain adequate books, accounts and records and
prepare all financial statements required hereunder in accordance with U.S.
generally accepted accounting principles and practices and in compliance
with the regulations of any governmental regulatory body having
jurisdiction thereof.
6.5. Change in Business. Advise the Agent and such Lender, in a timely manner,
of material changes to the nature of business of the Borrower or the Broker
Subsidiary as at present conducted. The Broker Subsidiary is at present
engaged in the business of providing financial services, primarily to
individual investors and/or their advisors.
6.6. Year 2000 Compliance. From and after the execution of this Agreement and
until at least January 1, 2000, Borrower will, on a quarterly basis, update
the Year 2000 Compliance Statement and deliver such update to the Agent
promptly after its release. Each such update will be true and accurate as
of the date of such update, and will accurately reflect the status as of
such date of Broker Subsidiary's Y2K Compliance Plan.
7. NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any Lender shall have any
Commitment hereunder, or any Loan or other obligation, shall remain
outstanding, unpaid or unsatisfied and until full payment of all amounts
due to the Lenders hereunder, unless and to the extent the Required Lenders
waive compliance in writing:
7.1. Net Capital. The Borrower will not permit the Broker Subsidiary to allow
(i) the average of two consecutive month-end Net Capital Ratios to be less
than 7%, or (ii) any month-end Net Capital Ratio to be less than 5%. The
Borrower similarly will not permit MSI to allow (i) the average of two
consecutive month-end Net Capital Ratios to be less than 7%, or (ii) any
month-end Net Capital Ratio to be less than 5%.
7.2. Minimum Stockholders' Equity. The Borrower will not allow Stockholders'
Equity to fall below the Minimum Stockholders' Equity.
7.3. Merger/Disposition of Assets. The Borrower will not (i) permit either
Broker Subsidiary or Intermediate Parent to (a) merge or consolidate,
unless the surviving company is a Controlled Subsidiary, or (b) convey or
transfer its properties and assets substantially as an entirety except to
one or more Controlled Subsidiaries; or, (ii) except as permitted by
Section 7.3(i) sell, transfer or otherwise dispose of any voting stock of
Broker Subsidiary or Intermediate Parent, or permit either Broker
Subsidiary or Intermediate Parent to issue, sell or otherwise dispose of
any of its voting stock, unless, after giving effect to any such
transaction, Broker Subsidiary or Intermediate Parent, as the case may be,
remains a Controlled Subsidiary.
7.4. Broker Subsidiary Indebtedness. The Borrower will not permit the Broker
Subsidiary to create, incur or assume any Indebtedness other than:
(a) (i) Indebtedness to customers, other brokers or dealers, securities
exchanges or securities markets, self-regulatory organizations, clearing
houses and like institutions (including, without limitation, letters of
credit or similar credit support devices issued for the account of Broker
Subsidiary and for the benefit of any of the foregoing in order to comply
with any margin, collateral or similar requirements imposed by or for the
benefit of any of the foregoing), (ii) "broker call" credit, (iii)
indebtedness consisting of borrowings secured solely by margin loans made
by Broker Subsidiary, together with any underlying collateral of Broker
Subsidiary, (iv) stock loans, (v) obligations to banks for disbursement
accounts, (vi) Indebtedness incurred for the purchase of tangible personal
property on a non-recourse basis or for the leasing of tangible personal
property under a capitalized lease; (vii) Indebtedness incurred for the
purchase, installation or servicing of computer equipment and software; and
(viii) Indebtedness incurred in the ordinary course of the Broker
Subsidiary's business, to the extent not already included in the foregoing
clauses (i) through (vii);
(b) intercompany Indebtedness; and
(c) other Indebtedness in the aggregate not exceeding $100,000,000.
7.5. Indebtedness Secured by Subsidiary Stock. The Borrower will not, and will
not permit any Subsidiary at any time directly or indirectly to create,
assume, incur or permit to exist any Indebtedness secured by a pledge, lien
or other encumbrance (hereinafter referred to as a "lien") on the voting
stock of any Subsidiary without making effective provision whereby the
Revolving Notes and the Term Notes shall be secured equally and ratably
with such secured Indebtedness so long as other Indebtedness shall be so
secured; provided, however, that the foregoing covenant shall not be
applicable to Permitted Liens (as defined in Section 7.6 below).
7.6. Liens and Encumbrances. The Borrower will not create, incur, assume or
suffer to exist any lien or encumbrance upon or with respect to any of its
properties, whether now owned or hereafter acquired, except the following
(the "Permitted Liens"):
(a) liens securing taxes, assessments or governmental charges or levies, or in
connection with workers' compensation, unemployment insurance or social
security obligations, or the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons not yet delinquent
or which are being contested in good faith by appropriate proceedings with
respect to which adequate reserves or other provisions are being maintained
to the extent required by U.S. generally accepted accounting principles;
(b) liens not for borrowed money incidental to the conduct of its business or
the ownership of property that do not materially detract from the value of
any item of property;
(c) attachment, judgment or other similar liens arising in the connection with
court proceedings that do not, in the aggregate, materially detract from
the value of its property, materially impair the use thereof in the
operation of its businesses and (i) that are discharged or stayed within
sixty (60) days of attachment or levy, or (ii) payment of which is covered
in full (subject to customary and reasonable deductibles) by insurance or
surety bonds; and
(d) liens existing at Closing Date provided that the obligations secured
thereby are not increased.
8. EVENTS OF DEFAULT
8.1. Defaults. The occurrence of any of the following events shall constitute an
"Event of Default":
(a) The Borrower shall fail to pay any interest with respect to the Revolving
Notes or the Term Notes or any Commitment Fee in accordance with the terms
hereof within 10 days after such payment is due.
(b) The Borrower shall fail to pay any principal with respect to the Revolving
Notes or the Term Notes in accordance with the terms thereof on the date
when due.
(c) Any representation or warranty made by the Borrower herein or hereunder or
in any certificate or other document furnished by the Borrower hereunder
shall prove to have been incorrect when made (or deemed made) in any
respect that is materially adverse to the interests of the Lenders or their
rights and remedies hereunder.
(d) Except as specified in (a) and (b) above, the Borrower shall default in the
performance of, or breach, any covenant of the Borrower with respect to
this Agreement, and such default or breach shall continue for a period of
thirty days after there has been given, by registered or certified mail, to
the Borrower by the Agent a written notice specifying such default or
breach and requiring it to be remedied.
(e) An event of default as defined in any mortgage, indenture, agreement or
instrument under which there may be issued, or by which there may be
secured or evidenced, any Indebtedness of the Borrower in a principal
amount not less than $60 million, shall have occurred and shall result in
such Indebtedness becoming or being declared due and payable prior to the
date on which it otherwise would become due and payable; provided, however,
that if such event of default shall be remedied or cured by the Borrower,
or waived by the holders of such Indebtedness, within twenty days after the
Borrower has received written notice of such event of default and
acceleration, then the Event of Default hereunder by reason thereof shall
be deemed likewise to have thereupon been remedied, cured or waived without
further action upon the part of either the Borrower or the Agent and
Lenders.
(f) Any involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief
against the Borrower or the Broker Subsidiary, or against all or a
substantial part of the property of either of them, under Title 11 of the
United States Code or any other federal, state or foreign bankruptcy,
insolvency, reorganization or similar law, (ii) the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for the Borrower or the Broker Subsidiary or for all or a
substantial part of the property of either of them, or (iii) the winding-up
or liquidation of the Borrower or the Broker Subsidiary; and, in any such
case, such involuntary proceeding or involuntary petition shall continue
undismissed for 60 days, or, before such 60-day period has elapsed, there
shall be entered an order or decree ordering the relief requested in such
involuntary proceeding or involuntary petition.
(g) The Borrower or the Broker Subsidiary shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or shall consent to the entry of an order for relief in an
involuntary case under such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Borrower or Broker Subsidiary or
for any substantial part of its respective properties, or shall make any
general assignment for the benefit of creditors, or shall fail generally to
pay its respective debts as they become due or shall take any corporate
action in furtherance of any of the foregoing.
(h) A final judgment or judgments for the payment of money in excess of
$50,000,000 in the aggregate shall be entered against the Borrower by a
court or courts of competent jurisdiction, and the same shall not be
discharged (or provisions shall not be made for such discharge), or a stay
of execution thereof shall not be procured, within 30 days from the date of
entry thereof and the Borrower shall not, within said period of 30 days, or
such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal.
(i) At any time after a Change in Control, the Borrower fails to maintain at
least one of the following credit ratings for its Senior Medium-Term Notes,
Series A: (a) BBB- (or better) by Standard & Poor's Rating Group, or (b)
Baa3 (or better) by Moody's Investor Service.
8.2. Remedies. If an Event of Default occurs and is continuing, then and in
every such case the Agent shall, at the request of, or may, with the
consent of, the Required Lenders (i) declare the Commitment of each Lender
to make Loans to be terminated whereupon such Commitments and obligation
shall be terminated, and declare the unpaid principal of all outstanding
Loans, any and all accrued and unpaid interest, any accrued and unpaid
Commitment Fees, or any other amounts owing or payable under the Notes, to
be immediately due and payable, by a notice in writing to the Borrower, and
upon such declaration such principal, interest, Commitment Fees, or other
amounts payable hereunder and accrued thereon shall become immediately due
and payable, together with any funding losses that may result as a
consequence of such declaration, without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by the
Borrower; provided, however, that in the case of any of the Events of
Default specified in subsection (f) or (g) of Section 8.1, automatically
without any notice to the Borrower or any other act by the Agent, the
Credit and the obligations of each Lender to make Loans shall automatically
terminate and the unpaid principal amount of all outstanding Loans, any
accrued and unpaid interest, any accrued and unpaid Commitment Fees or any
other amounts payable hereunder shall become immediately due and payable,
together with any funding losses that may result as a consequence thereof,
without further act of the Agent or any Lender and without presentment,
demand, protest or other notice of any kind, all of which are expressly
waived by the Borrower.
9. THE AGENT
9.1. Appointment and Authorization. Each Lender hereby irrevocably (subject to
Section 9.9) appoints, designates and authorizes the Agent to take such
action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any
duties or responsibilities except those expressly set forth, nor shall the
Agent have or be deemed to have any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or any other Loan Document
or otherwise exist against the Agent.
9.2. Delegation of Duties. The Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for
the negligence or misconduct of any agent or attorney-in-fact that it
selects with reasonable care.
9.3. Liability of Agent. None of the Agent-Related Persons shall (i) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty made by the
Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in
any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Loan Document, or for any failure of the Borrower or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or
any of the Borrower's Subsidiaries or Affiliates.
9.4. Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document
in accordance with a request or consent of the Required Lenders and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions specified in
Section 4.1, each Lender that has executed this Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender.
9.5. Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent
shall have received written notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating
that such notice is a "notice of default". The Agent will notify the
Lenders of its receipt of any such notice. The Agent shall take such action
with respect to such Default or Event of Default as may be requested by the
Required Lenders in accordance with Article VIII; provided, however, that
unless and until the Agent has received any such request, the Agent may
(but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
9.6. Credit Decision. Each Lender acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it and that no act by
the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the
Agent, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of any
of the Agent-Related Persons.
9.7. Indemnification of Agent. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, from and against any and all Indemnified Liabilities; provided,
however, that no Lender shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified Liabilities
resulting solely from any such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall
reimburse the Agent upon demand for its ratable share, of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
9.8. Agent in Individual Capacity. BofA and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and
its Subsidiaries and Affiliates as though BofA were not the Agent hereunder
and without notice to or consent of the Lenders. The Lenders acknowledge
that, pursuant to such activities, BofA or its Affiliates may receive
information regarding the Borrower or its Affiliates (including information
that may be subject to confidentiality obligations in favor of the Borrower
or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans,
BofA shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the Agent.
9.9. Successor Agent. The Agent may, and at the request of the Required Lenders
shall, resign as Agent upon 30 days' notice to the Lenders and Borrower. If
the Agent resigns under this Agreement, the Required Lenders, with the
consent of the Borrower, which consent shall not be unreasonably withheld,
shall appoint from among the Lenders a successor agent for the Lenders
which successor agent shall be approved by the Borrower. If no successor
agent is appointed prior to the effective date of the resignation of the
Agent, the Agent with the consent of the Borrower, which consent shall not
be unreasonably withheld, may appoint, after consulting with the Lenders
and the Borrower, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring
Agent and the term "Agent" shall mean such successor agent and the retiring
Agent's appointment, powers and duties as Agent shall be terminated. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article 9 and Sections 10.4 and 10.5 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the
date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. The retiring Agent shall refund to
Borrower that portion of any agency fee paid to such Agent as is not earned
due to such Agent's resignation, prorated to the date of such Agent's
resignation.
9.10.Withholding Tax. (a) If any Lender is a "foreign corporation, partnership
or trust" within the meaning of the Code and such Lender claims exemption
from, or a reduction of, U.S. withholding tax under Section 1441 or 1442 of
the Code, such Lender agrees with and in favor of the Agent, to deliver to
the Agent:
(i) if such Lender claims an exemption from, or a reduction of, withholding tax
under a United States tax treaty, properly completed IRS Forms 1001 and W-8
before the payment of any interest in the first calendar year and before
the payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this Agreement is exempt
from United States withholding tax because it is effectively connected with
a United States trade or business of such Lender, two properly completed
and executed copies of IRS Form 4224 or any successor form thereto before
the payment of any interest is due in the first taxable year of such Lender
and in each succeeding taxable year of such Lender during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii)such other form or forms as may be required under the Code or other laws
of the United States as a condition to exemption from, or reduction of,
United States withholding tax. Such Lender agrees to promptly notify the
Agent of any change in circumstances which would modify or render invalid
any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding tax under
a United States tax treaty by providing IRS Form 1001 and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of the Company to such Lender, such Lender agrees
to notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Lender. To the
extent of such percentage amount, the Agent will treat such Lender's IRS
Form 1001 or any successor form thereto as no longer valid.
(c) If any Lender claiming exemption from United States withholding tax by
filing IRS Form 4224 or any successor form thereto with the Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Company to such Lender, such Lender agrees to
undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable withholding tax,
the Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent or if any Lender which is a
"foreign corporation, partnership or trust" within the meaning of the Code
is not entitled to claim exemption from or a reduction of U.S. withholding
tax under Section 1441 or 1442 of the Code, then the Agent shall withhold
from any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold
tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because
such Lender failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Lender shall indemnify the Agent fully for
all amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The
obligation of the Lenders under this subsection shall survive the payment
of all Obligations and the resignation or replacement of the Agent.
9.11.Co-Agents: Lead Managers. None of the Lenders identified on the facing
page or signature pages of this Agreement as a "co-agent," "lead manager"
"syndication agent" or "documentation agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders so identified as a "co-agent," "lead
manager," "Syndication agent" or "documentation agent" shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the
Lenders so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.
10. MISCELLANEOUS
10.1.Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Required
Lenders (or by the Agent at the written request of the Required Lenders)
and the Borrower and acknowledged by the Agent, and then any such waiver or
consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all the
Lenders and the Borrower and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.2);
(b) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein on any
Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Lenders or any of
them to take any action hereunder; or
(e) amend this Section, or Section 2.13, or any provision herein providing for
consent or other action by all Lenders; and, provided further, that (i) no
amendment, waiver or consent shall, unless in writing and signed by the
Agent in addition to the Required Lenders or all the Lenders, as the case
may be, affect the rights or duties of the Agent under this Agreement or
any other Loan Document, and (ii) the Fee Letters may be amended or rights
or privileges thereunder waived, in a writing executed by the parties
thereto.
10.2. Notices.
(a) All notices, requests and other communications shall be in writing
(including, unless the context expressly otherwise provides, by facsimile
transmission, provided that any matter transmitted by the Borrower by
facsimile shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule 10.2).
(b) All such notices, requests and communications shall, when transmitted by
overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or IX shall not be effective until actually
received by the Agent.
(c) Any agreement of the Agent and the Lenders herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Borrower. The Agent and the Lenders shall be entitled to
rely on the authority of any Person purporting to be a Person who is named
in the then-current certificate delivered pursuant to Section 4.1(e) hereof
as authorized to execute Borrowing Advices (each an "Authorized Person")
and the Lenders shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Agent or the
Lenders in reliance upon such telephonic or facsimile notice, provided the
Agent and the Lenders reasonably believe such Person to be an Authorized
Person. The obligation of the Borrower to repay the Loans shall not be
affected in any way to any extent by any failure by the Agent and the
Lenders to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the Lenders of a confirmation which
is at variance with the terms understood by the Agent and the Lenders to be
contained in the telephonic or facsimile notice.
10.3.No Waiver-cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege.
10.4.Costs and Expenses. The Borrower shall:
(a) whether or not the transactions contemplated hereby are consummated, pay or
reimburse BofA including in its capacity as Agent and Lender within five
Business Days after demand, subject to subsection 4.1(g) for all reasonable
costs and expenses incurred by BofA including in its capacity as Agent and
Lender in connection with the development, preparation, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement,
any Loan Document and any other documents prepared in connection herewith
or therewith, and the consummation of the transactions contemplated hereby
and thereby, including reasonable Attorney Costs incurred by BofA
(including in its capacity as Agent and Lender with respect thereto); and
(b) pay or reimburse the Agent, the Arranger and each Lender within five
Business Days after demand (subject to subsection 4.1(g)) for all
reasonable costs and expenses (including reasonable Attorney Costs)
incurred by them in connection with the enforcement, attempted enforcement,
or preservation of any rights or remedies under this Agreement or any other
Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding). In connection with any claim, demand,
action or cause of action relating to the enforcement, preservation or
exercise of any rights or remedies covered by this Section 10.4 against the
Borrower, all Lenders shall be represented by the same legal counsel
selected by such Lenders; provided, that if such legal counsel determines
in good faith that representing all such Lenders would or could result in a
conflict of interest under Laws or ethical principles applicable to such
legal counsel or that a claim is available to a Lender that is not
available to all such Lenders, then to the extent reasonably necessary to
avoid such a conflict of interest or to permit an unqualified assertion of
such a claim, each Lender shall be entitled to separate representation by
legal counsel selected by that Lender, with all such legal counsel using
reasonable efforts to avoid unnecessary duplication of effort by counsel
for all Lenders.
10.5.Borrower Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Borrower shall indemnify and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of
the Agent or replacement of any Lender) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein, or
the transactions contemplated hereby, or any action taken or omitted by any
such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or the use of the proceeds thereof, whether or
not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that the Borrower
shall have no obligation hereunder to any Indemnified Person with respect
to Indemnified Liabilities resulting from the gross negligence or willful
misconduct of such Indemnified Person. If any claim, demand, action or
cause of action is asserted against any Indemnified Person, such
Indemnified Person shall promptly notify Borrower, but the failure to so
promptly notify Borrower shall not affect Borrower's obligations under this
Section unless such failure materially prejudices Borrower's right to
participate in the contest of such claim, demand, action or cause of
action, as hereinafter provided. If requested by Borrower in writing, such
Indemnified Person shall in good faith contest the validity, applicability
and amount of such claim, demand, action or cause of action and shall
permit Borrower to participate in such contest. Any Indemnified Person that
proposes to settle or compromise any claim or proceeding for which Borrower
may be liable for payment of indemnity hereunder shall give Borrower
written notice of the terms of such proposed settlement or compromise
reasonably in advance of settling or compromising such claim or proceeding
and shall obtain Borrower's prior consent. In connection with any claim,
demand, action or cause of action covered by this Section 10.5 against more
than one Indemnified Person, all such Indemnified Person shall be
represented by the same legal counsel selected by the Indemnified Persons
and reasonably acceptable to Borrower; provided, that if such legal counsel
determines in good faith that representing all such Indemnified Persons
would or could result in a conflict of interest under Laws or ethical
principles applicable to such legal counsel or that a defense or
counterclaim is available to an Indemnified Person that is not available to
all such Indemnified Persons, then to the extent reasonably necessary to
avoid such a conflict of interest or to permit unqualified assertion of
such a defense or counterclaim, each Indemnified Person shall be entitled
to separate representation by legal counsel selected by that Indemnified
Person and reasonably acceptable to Borrower, with all such legal counsel
using reasonable efforts to avoid unnecessary duplication of effort by
counsel for all Indemnified Persons. The agreements in this Section shall
survive payment of all other Obligations.
10.6.Payments Set Aside. To the extent that the Borrower makes a payment to the
Agent or the Lenders, or the Agent or the Lenders exercise any right of
set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Lender in its discretion) to be repaid to
a trustee, receiver or any other party, in connection with any Insolvency
Proceeding or otherwise, then (a) to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not
been made or such setoff had not occurred, and (b) each Lender severally
agrees to pay to the Agent upon demand its pro rata share of any amount so
recovered from or repaid by the Agent.
10.7.Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not assign or transfer
any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Lender.
10.8.Assignments, Participations etc. (a) Any Lender may, with the written
consent of the Agent and the Borrower, which consent shall not be
unreasonably withheld (except Borrower's consent shall not be required if
(i) a Default or an Event of Default exists and is continuing, and (ii) the
Eligible Assignee is not engaged in the securities brokerage business or
the investment advisory business), at any time assign and delegate to one
or more Eligible Assignees (provided that no written consent of the Agent
shall be required in connection with any assignment and delegation by a
Lender to an Eligible Assignee that is an Affiliate of such Lender) (each
an "Assignee") all, or any ratable part of all, of the Loans, the
Commitments, and the other rights and obligations of such Lender hereunder,
in a minimum amount of $10,000,000; provided, however, that the Borrower
and, the Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses
and related information with respect to the Assignee, shall have been given
to the Borrower and the Agent by such Lender and the Assignee; (ii) such
Lender and its Assignee shall have delivered to the Borrower and the Agent
an Assignment and Acceptance in the form of Exhibit D ("Assignment and
Acceptance") together with any Note or Notes subject to such assignment and
(iii) the assignor Lender or Assignee has paid to the Agent a processing
fee in the amount of $3,500.
(b) From and after the date that the Agent notifies the assignor Lender and the
Borrower that it has received (and the Borrower and the Agent have provided
their consent with respect to) an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the
Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the Agent that it
has received an executed Assignment and Acceptance and payment of the
processing fee, (and provided that it consents to such assignment in
accordance with subsection 10.8(a)), the Borrower shall execute and deliver
to the Agent, new Notes evidencing such Assignee's assigned Loans and
Commitment and, if the assignor Lender has retained a portion of its Loans
and its Commitment, replacement Notes in the principal amount of the
Commitment retained by the assignor Lender (such Notes to be in exchange
for, but not in payment of, the Notes held by such Lender). Immediately
upon each Assignee's making its processing fee payment under the Assignment
and Acceptance, this Agreement shall be deemed to be amended to the extent,
but only to the extent, necessary to reflect the addition of the Assignee
and the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assignor Lender pro tanto.
(d) Any Lender may at any time sell to one or more commercial banks or other
Persons not Affiliates of the Borrower (a "Participant") participating
interests in any Loans, the Commitment of that Lender and the other
interests of that Lender (the "originating Lender") hereunder and under the
other Loan Documents; provided, however, that (i) the originating Lender's
obligations under this Agreement shall remain unchanged, (ii) the
originating Lender shall remain solely responsible for the performance of
such obligations, (iii) the Borrower, and the Agent shall continue to deal
solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the
other Loan Documents, and (iv) no Lender shall transfer or grant any
participating interest under which the Participant has rights to approve
any amendment to, or any consent or waiver with respect to, this Agreement
or any other Loan Document.
(e) Notwithstanding any other provision in this Agreement, any Lender may at
any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in
favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve
Bank may enforce such pledge or security interest in any manner permitted
under applicable law.
(f) Any Lender, (a "Granting Lender") may, with notice to the Agent, grant to a
special purpose funding vehicle (an "SPC") the option to fund all or any
part of any Loan that such Granting Lender would otherwise be obligated to
fund pursuant to this Agreement. The funding of a Loan by an SPC hereunder
shall utilize the Revolving Credit Commitment of the Granting Lender to the
same extent, and as if, such Loan were funded by such Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
payment under this Agreement for which a Lender would otherwise be liable
for so long as, and to the extent, the Granting Lender provides such
indemnity or makes such payment. Notwithstanding anything to the contrary
contained in the foregoing or anywhere else in this Agreement, (i) nothing
herein shall constitute a commitment by any SPC to fund any Loan, (ii) if
an SPC elects not to exercise such option or otherwise fails to fund all or
any part of such Loan, the Granting Lender shall be obligated to fund such
Loan pursuant to the terms hereof, and (iii) the Borrower and Agent shall
continue to deal exclusively with the Granting Lender and any funding by an
SPC hereunder shall not constitute an assignment, assumption or
participation of any rights or obligations of the Granting Lender. Any SPC
may disclose on a confidential basis any non-public information relating to
its funding of Loans to any rating agency, commercial paper dealer or
provider of any surety or guarantee to such SPC, provided, as a condition
precedent to such disclosure, (i) such agency, dealer or provider has
delivered to such Granting Lender for the benefit of Borrower a written
confidentiality agreement substantially similar to Section 10.9, and (ii)
simultaneous with or prior to such disclosure, such Granting Lender has
given written notice to Borrower of the agency, dealer or provider to which
such disclosure is being made and the contents of such disclosure. This
Section may not be amended without the prior written consent of each
Granting Lender, all or any part of whose Loan is being funded by an SPC at
the time of such amendment.
10.9.Confidentiality. Each Lender agrees to hold any confidential information
that it may receive from Borrower or from the Agent on such Borrower's
behalf, pursuant to this Agreement in confidence, except for disclosure:
(a) to legal counsel and accountants for Borrower or any Lender, (b) to
other professional advisors to Borrower or any Lender, provided that the
recipient has delivered to such Lender a written confidentiality agreement
substantially similar to this Paragraph 10.9; (c) to regulatory officials
having jurisdiction over any Lender, (d) as required by applicable law or
legal process or in connection with any legal proceeding in which any
Lender and Borrower are adverse parties; and (e) to another financial
institution in connection with a disposition or proposed disposition to
that financial institution of all or part of any Lender's interests
hereunder or a participation interest in the Revolving Note and/or the Term
Note, each in accordance with Paragraph 10.8 hereof, provided that the
recipient has delivered to such Lender a written confidentiality agreement
substantially similar to this Paragraph 10.9. Each Lender further agrees
that it will not use such confidential information in any activity or for
any purpose other than the administration of credit facilities extended to
Borrower and its Subsidiaries and, without limitation, will take such steps
as are reasonably appropriate to preclude access to any such confidential
information to be obtained by any Person employed by any Lender, or by an
affiliate of any Lender, who is not involved in the administration of
credit facilities extended to Borrower and its Subsidiaries. For purposes
of the foregoing, "confidential information" shall mean any information
respecting Borrower or its Subsidiaries reasonably specified by Borrower as
confidential, other than (i) information filed with any governmental agency
and available to the public, and (ii) information disclosed by Borrower to
any Person not associated with Borrower without a written confidentiality
agreement substantially similar to this Paragraph 10.9. Certain of the
confidential information pursuant to this Agreement is or may be valuable
proprietary information that constitutes a trade secret of Borrower or its
Subsidiaries; neither the provision of such confidential information to any
Lender or the limited disclosures thereof permitted by this Paragraph 10.9
shall affect the status of any such confidential information as a trade
secret of Borrower and its Subsidiaries. Each Lender, and each other Person
who agrees to be bound by this Paragraph 10.9, acknowledges that any breach
of the agreements contained in this Paragraph 10.9 would result in losses
that could not be reasonably or adequately compensated by money damages.
Accordingly, if any Lender or any other person breaches its obligations
hereunder, such Lender or such other person recognizes and consents to the
right of Borrower, Intermediate Parent, and/or Broker Subsidiary to seek
injunctive relief to compel such Lender or other Person to abide by the
terms of this Paragraph 10.9.
10.10. Notification of Addresses, Lending Offices, Etc. Each Lender shall notify
the Agent in writing of any changes in the address to which notices to the
Lender should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of
such other administrative information as the Agent shall reasonably
request.
10.11. Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which, when so executed, shall be deemed an original,
and all of said counterparts taken together shall be deemed to constitute
but one and the same instrument.
10.12. Severability. The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required
hereunder.
10.13. No Third Parties Benefited. This Agreement is made and entered into for
the sole protection and legal benefit of the Borrower, the Lenders, the
Agent and the Arranger, and their permitted successors and assigns, and no
other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
10.14. Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA; PROVIDED THAT THE
AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF
THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE AGENT AND THE
LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE AGENT
AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO.
10.15. Waiver of Jury Trial. THE BORROWER, THE LENDERS AND THE AGENT EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTION CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR
IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR
THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.16. Entire Agreement. This Agreement, together with the other Loan Documents,
embodies the entire agreement and understanding among the Borrower, the
Lenders and the Agent, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating
to the subject matter hereof and thereof.
10.17. Headings. Articles and Section headings in this Agreement are included
herein for the convenience of reference only.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the date first above written.
Borrower:
THE CHARLES SCHWAB CORPORATION
By
----------------------------
Joseph R. Martinetto
Senior Vice President and Treasurer
Lenders:
Bank of America National Trust and
Savings Association, as Agent and
individually as Lender
By
Title:
The Bank of New York
By
Title:
Banque Nationale de Paris N.Y.
By
Title:
By
Title:
Citicorp USA, Inc. as Syndication
Agent and Lender
By
Title:
Commerzbank AG, New York and Grand
Cayman Branches
By
Title:
By
Title:
Credit Lyonnais - New York Branch
By
Title:
The First National Bank of Chicago
By
Title:
First Tennessee Bank, National Assoc.
By
Title:
Harris Trust and Savings Bank
By
Title:
Lloyds Bank Plc
By
Title:
Mellon Bank N.A.
By
Title:
Wells Fargo Bank N.A.
By
Title:
PNC Bank, National Association
By
Title:
Wesdeutsche Landesbank Girozentrale,
New York Branch
By
Title:
By
Title:
Schedule 1
LENDERS' COMMITMENTS
The Charles Schwab Corporation $600,000,000 Credit Agreement dated June 25, 1999
Lender Commitment Amount
1. Bank of America National Trust and Savings 1. $75,000,000
Association
2. Citicorp USA, Inc. 2. $65,000,000
3. The First National Bank of Chicago 3. $65,000,000
4. Lloyds Bank Plc 4. $55,000,000
5. Wells Fargo Bank, N.A. 5. $55,000,000
6. PNC Bank, National Association 6. $55,000,000
7. Credit Lyonnais New York Branch 7. $35,000,000
8. Wesdeutsch Landesbank Girozentrale, 8. $35,000,000
New York Branch
9. Commerzbank AG - New York Bank 9. $35,000,000
10. Banque Nationale de Paris, N.Y. 10. $35,000,000
11. The Bank of New York 11. $25,000,000
12. Harris Trust & Savings Bank 12. $25,000,000
13. Mellon Bank, N.A. 13. $25,000,000
14. First Tennessee Bank, National Association 14. $15,000,000
Total $600,000,000
Schedule 2
(Dollars in Millions)
The Charles Schwab Corporation is a party to a separate but substantially
identical Credit Agreement (364-Day Commitment) dated June 26, 1998 with each of
the following banks, with the commitment of each bank as specified across from
such bank's name. Each such Credit Agreement (364-Day Commitment) terminates by
its terms on June 25, 1999.
Commitment Amount
(Dollars in Millions)
Bank of America NT&SA $25
Bank of New York 25
Chase Manhattan Bank 17.5
Citicorp USA, Inc. 25
The First National Bank of Chicago 17.5
First Tennessee Bank National Association 10
Norwest Bank Minnesota, N.A. 10
PNC Bank 25
NationsBank, N.A. 10
Union Bank of Switzerland 10
Schedule 10.2
NOTICES
If to the Borrower:
If by U.S. mail: The Charles Schwab Corporation
Treasury Department
Att'n: Emily Glidden or Successor
211 Main St. (Mail Stop SF120KNY-09-305)
San Francisco, CA 94105
If by hand delivery
(including courier
and overnight
messenger service): The Charles Schwab Corporation
Treasury Department
Att'n: Emily Glidden or Successor
120 Kearny St. 9th Floor
San Francisco, CA 94101
Telephone: (415) 636-9801
Facsimile: (415) 667-3155
If to the Agent:
See information under Bank of America National Trust and Savings
Association in table below pertaining to Lenders.
If to the Lenders:
Credit Contact Operations Contact Lending Office Payment Instructions
- -------------- ------------------ -------------- --------------------
Bank of America National Trust Bank of America National Bank of America National Trust Bank of America
and Savings Association Trust and Savings and Savings Association Concord, California
231 South LaSalle Street Association 1850 Gateway Blvd. ABA#: 121-000-358
Chicago, Illinois 60697 1850 Gateway Blvd. Concord, CA 94520 Acct.#: 12330-17051
Attention: Mr. Jeffrey Kovarik Concord, CA 94520 Attention: Ms. Kristine
Principal Attention: Ms. Kristine Kelleher Kelleher, Bank of America
(312) 828-8870 Agency Administrative Officer
Fax: (312) 828-3359 (925) 675-8373
Fax: (925) 675-8500
Bank of New York Bank of New York Bank of New York The Bank of New York
One Wall Street, 42nd Floor One Wall Street One Wall Street New York, New York
New York, NY 10286 New York, NY 10286 New York, NY 10286 ABA#: 021000018
Attention: Mr. Mark Rogers Attention: Ms. Wendy Forrest Acct.#: GLA 111231
Vice President (212) 635-6812 Acct. Name: Broker Services
(212) 635-6827 Fax: (212) 635-6615 Attention: Mr. Doug Ottley
Fax: (212) 809-9566
First Tennessee Bank, N.A. First Tennessee Bank, N.A. First Tennessee Bank,
165 Madison Avenue, 9th Floor 165 Madison Avenue National Association
The National Department The National Department Memphis, Tennessee
Memphis, TN 38103 Memphis, TN 38103 ABA#: 084000026
Attention: Mr. Victor Notaro Acct.#: 1141746830
Vice President Acct. Name: Money Transfer
(901) 523-4106 Clearance Bank Secrecy
Fax: (901) 523-4267 Attention: Sonel Patel
Mellon Bank N.A. Mellon Bank Mellon Bank Mellon Bank, N.A.
One Mellon Bank Center One Mellon Bank Center Three Mellon Center ABA#: 043000261
Room 0370 Room 0370 Pittsburgh, PA 15259 Acct.#: 990873800
Pittsburgh, PA 15258 Pittsburgh, PA 15258 Attention: Ms. Theresa
Attention: Mr. Charles Attention: Mr. Geoff Callahan Hayward, Loan Administration
Frankenberry Senior Vice President
Vice President (412) 234-9364
(412) 236-1643 Fax: (412) 234-9047
Fax: (412) 234-9047
Harris Bank Harris Bank Harris Bank Harris Trust & Savings Bank
111 West Monroe Street 111 West Monroe Street 111 West Monroe Street Chicago, Illinois
5th Floor East 5th Floor East 5th Floor East ABA#: 071000288
Chicago, IL 60603 Chicago, IL 60603 Chicago, IL 60603 Acct.#: 109-215-4
Attention: Ms. Shelley Mulconrey Attention: Ms. Sue Anderl Attention: Loan Accounting
Vice President Collateral Specialist Division
(312) 765-1561 (312) 461-3524
Fax: (312) 765-8201 Fax: (312) 765-8201
Banque Nationale de Paris, N.Y. Banque Nationale de Paris, N.Y. Banque Nationale de Paris, N.Y. Banque Nationale de Paris,
499 Park Avenue, 2nd Floor 499 Park Avenue, 2nd Floor 499 Park Avenue, 2nd Floor N.Y.
New York, NY 10022-1278 New York, NY 10022-1278 New York, NY 10022-1278 New York, New York
Attention: Ms. Riva Howard Attention: Ms. Claudia Ramirez ABA#: 026007689
Vice President Administrator Acct.#: 70015370150
(212) 415-9883 (212) 415-9874 Acct Name: Back Office Loans
Fax: (212) 415-9707 Fax: (212) 415-9707 Attention: Ms. Claudia
Ramirez
Commerzbank AG Commerzbank AG Commerzbank AG Commerzbank AG, New York
633 West Fifth Street, Suite 6600 2 World Financial Center 2 World Financial Center Branch
Los Angeles, CA 90071 New York, NY 10281 New York, NY 10281 ABA#: 026008044
Attention: Mr. Steven Larsen Attn: Ms. Christine Hunermund Acct.#; 150/292159105USD
(213) 623-8223 (212) 266-7499 Acct Name: Commerzbank AG,
Fax: (213) 623-0039 Fax: (212) 266-7684 New York Branch
Reference Charles Schwab
Corporation
Westdeutsche Landesbank Westdeutsche Landesbank Westdeutsche Landesbank Chase Manhattan Bank
Girozentrale, New York Branch Girozentrale, New York Branch Girozentrale, New York Branch One Chase Manhattan Plaza
1211 Avenue of the America 1211 Avenue of the America 1211 Avenue of the America New York, New York 10081
New York, NY 10036 New York, NY 10036 New York, NY 10036 ABA#: 021-000-021
Attention: Mr. Terence Law Attention: Mr. Philip Green Acct.#: 920-1-060663
Vice President Vice President Acct. Name: Westdeutsche
(212) 852-6242 (212) 852-6113 Landesbank Girozentrale
Fax: (212) 852-6156 Fax: (212) 302-7946 New York Branch
Attn: Mr. Darryl Fennell
Reference: The Charles
Schwab Corporation
Credit Lyonnais Credit Lyonnais Credit Lyonnais Federal Reserve Bank of New
515 South Flower Street, Ste 2200 515 South Flower Street, 515 South Flower Street, Suite York
Los Angeles, CA 90071 Suite 2200 2200 New York, New York
Attention: Mr. Edward Leong Los Angeles, CA 90071 Los Angeles, CA 90071 ABA#: 026008073
First Vice President Attention: Emiko Naggai Acct#: 01-88179-3701-00-001
(213) 362-5946 Commercial Assistant Acct. Name: Credit Lyonnais
Fax: (213) 362-5949 (213) 362-5941 NY Branch
Fax: (213) 362-6949
Lloyds Bank Plc Lloyds Bank Plc Lloyds Bank Plc Bank of America
575 Fifth Avenue, 17th Floor 575 Fifth Avenue, 17th Floor One Biscayne Tower International, New York
New York, NY 10017 New York, NY 10017 Suite 3200 ABA#: 026-009-593
Attention: Mr. Mike Gilligan Attention: Patricia Kilian / Two South Biscayne Boulevard Acct. #: 655-010-1938
Director, Financial Institutions, Jamie Burger Miami, FL 33131 Acct. Name: Lloyds Bank
USA (212) 930-8914 Plc, Miami
(212) 930-8911 Fax: (212) 930-5098
Fax: (212) 930-5098
Wells Fargo Bank, N.A. Wells Fargo Bank, N.A. Wells Fargo Bank, N.A. Well Fargo Bank, N.A.
230 W. Monroe, Suite 2900 201 Third Street 201 Third Street San Francisco, California
Chicago, IL 60606 San Francisco, CA 94103 MAC 0187-081 ABA#: 121-000-248
Attention: Mr. Brad Hardy Attention: Ms. Sue Silver San Francisco, CA 94103 Acct.#: 271-2507201
Vice President Vice President Acct. Name: Memsyn
(312) 345-8622 (415) 477-5374 Attention: Charles Schwab
Fax: (312) 553-4783 Fax: (415) 512-1943 1582242431
PNC Bank National Association PNC Bank National Association PNC Bank National Association PNC Bank, N.A.
1600 Market Street, 21st Floor 1600 Market Street, 21st Floor 1600 Market Street, 21st Floor Philadelphia, Pennsylvania
Philadelphia, PA 19103 Philadelphia, PA 19103 Philadelphia, PA 19103 ABA#: 031-000-053
Attention: Mr. Paul Devine Attention: Mr. Jack Hoffman Acct.#: 13076-156
F2-F070-21-3 Loan Administrator Acct. Name: Commercial Loan
Vice President (215) 585-5239 Attention: Charles Schwab
(215) 585-6639 Fax: (215) 585-7161 Corp.
Fax: (215) 585-7615
First National Bank of Chicago First National Bank of Chicago First National Bank of Chicago The First National Bank
153 West 51st Street, Suite 4000 One First National Plaza One First National Plaza of Chicago
New York, NY 10019 Chicago, IL 60670 Chicago, IL 60670 Chicago, Illinois
Attention: Mr. Francois Van Attention: Ms. Vickie Kobierski ABA#: 071000013
Reepinghen (312) 732-5627 Acct.#: DES Incoming
Senior Vice President Fax: (312) 732-3537 Clearing General Ledger
(212) 373-1001 (312) 732-3246 #7521-7653
Fax: (212) 373-1403 Attention: Ms. Vickie
Kobierski Reference Charles
Schwab
Citibank, N.A. Citicorp USA, Inc. Citicorp USA, Inc. Citibank, N.A.
399 Park Avenue, 12th Floor Two Pennsway, Suite 300 Two Pennsway, Suite 300 ABA#: 021000089
New York, NY 10043 New Castle, DE 19720 New Castle, DE 19720 Acct.#: RE Charles Schwab
Attention: Mr. Michael Mauerstein Attention: Ms. Lizanne Bradley Attention: Ms. Lizanne
Managing Director (302) 894-6143 Bradley
(212) 559-6985 (302) 894-6120
Fax: (212) 371-3709
EXHIBIT A-1
REVOLVING NOTE
Date: June 25, 1999
$ (Amount of Commitment)
--------------------
For Value Received, The Charles Schwab Corporation ("Schwab")
hereby promises to pay to the order of (the "Lender") to Bank
of America National Trust and Savings Association, as Agent, at Agent's office
located at , for the account of the applicable Lending Office of
the Lender, the principal amount of ($ ) or the aggregate
amount of all Revolving Loans made to Schwab by the Lender, whichever is less,
on June 23, 2000. The undersigned also promises to pay interest on the unpaid
principal amount of each Borrowing from the date of such Borrowing until such
principal amount is paid, at the rates per annum, and payable at such times, as
are specified in the Credit Agreement. This Note shall be subject to the terms
of the Credit Agreement, and all principal and interest payable hereunder shall
be due and payable in accordance with the terms of the Credit Agreement.
Schwab hereby authorizes the Lender to endorse on the Schedule
attached to this Note the amount and Type of Revolving Loans made to Schwab by
the Lender and all renewals, conversions, and payments of principal amounts in
respect of such Revolving Loans, which endorsements shall, in the absence of
manifest error, be conclusive as to the outstanding principal amount of all such
Revolving Loans, provided, however, that the failure to make such notation with
respect to any Revolving Loans or payments shall not limit or otherwise affect
the obligation of Schwab under the Credit Agreement or this Note.
This Note is the Revolving Note referred to in the Credit
Agreement (364-Day Commitment), dated as of June 25, 1999 among Schwab, the
Lender, certain other Lenders party thereto, and Bank America National Trust &
Savings Association, as Agent for the Lenders (the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same meanings. The
Credit Agreement, among other things, contains provisions for acceleration of
the maturity of this Note, upon the happening of certain stated events and also
for prepayments on account of the principal of this Note prior to the maturity
of this Note upon the terms and conditions specified in the Credit Agreement.
Principal and interest payments shall be in money of the United
States of America, lawful at such times for the satisfaction of public and
private debts, and shall be in immediately available funds.
Schwab promises to pay the costs of collection, including
reasonable attorney's fees, if default is made in the payment of this Note.
The terms and provisions of this Note shall be governed by the
applicable laws of the State of California.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed by its officers thereunto duly authorized and directed by appropriate
corporate authority.
The Charles Schwab Corporation
By:
---------------------------
Joseph R. Martinetto
Senior Vice President and Treasurer
Exhibit A-1
SCHEDULE TO REVOLVING NOTE
Date Amount of Unpaid
Made, Principal Principal Name of
Continued, Continued, Balance of Person
Converted, Type of Amount Converted, Revolving Making
or Paid Loan of Loan or Paid Note Notation
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EXHIBIT A-2
TERM NOTE
Date: June 25, 1999
FOR VALUE RECEIVED, the undersigned, The Charles Schwab
Corporation ("Schwab") hereby promises to pay to the order of
(the "Lender"), to Bank of America National Trust and
- ---------------------
Savings Association, as Agent, at the Agent's office located at 231 South
LaSalle Street, Chicago, Illinois 60697, for the account of the applicable
Lending Office of the Lender, the principal amount of each Term Loan made by the
Lender to Schwab pursuant to the terms of the Credit Agreement (364-Day
Commitment), dated as of June 25, 1999, as amended, among Schwab, the Lender,
certain other Lenders party thereto, and Bank of America National Trust and
Savings Association, as Agent for the Lenders (the "Credit Agreement"), as shown
in the schedule attached hereto and any continuation thereof, in lawful money of
the United States and in immediately available funds on the Term Loan Maturity
Date for such Term Loan. The undersigned also promises to pay interest on the
unpaid principal amount of each Term Loan from the date of such Term Loan until
such principal amount is paid, in like money, at said office for the account of
the Lender's applicable Lending Office, at the rates per annum, and payable at
such times as are specified in the Credit Agreement. This Term Note shall be
subject to the terms of the Credit Agreement and all principal and interest
payable hereunder should be due and payable in accordance with the terms of the
Credit Agreement. Terms defined in the Credit Agreement are used herein with the
same meanings.
This Term Note is one of the Term Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, contains provisions for acceleration of the maturity of this Term
Note upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity of the Term Note upon the
terms and conditions specified in the Credit Agreement.
Schwab promises to pay costs of collection, including reasonable
attorney's fees, if default is made in the payment of this Note.
The terms and provisions of this Term Note shall be governed by
the applicable laws of the State of California.
IN WITNESS WHEREOF, the undersigned has caused this Term Note to
be executed by its officer thereunto duly authorized and directed by appropriate
corporate authority.
The Charles Schwab Corporation
By:
---------------------------
Joseph R. Martinetto
Senior Vice President and Treasurer
Exhibit A-2
SCHEDULE TO TERM NOTE
Date Amount of Unpaid
Made, Term Principal Principal Name of
Continued, Type Amount Loan Continued, Balance of Person
Converted, of of Maturity Converted, Term Making
or Paid Loan Loan Date or Paid Note Notation
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EXHIBIT B
BORROWING ADVICE
1. This Borrowing Advice is executed and delivered by The Charles
Schwab Corporation ("Borrower") to you pursuant to that certain Credit Agreement
dated as of June , 1999 (the "Credit Agreement"), entered into by Borrower,
Bank of America National Trust and Savings Association ("Bank of America") and
certain other Lenders parties thereto, collectively with Bank of America (the
"Lenders") and Bank of America as Agent for the Lenders (herein "Agent"). Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as defined in the Credit Agreement.
2. Borrower hereby requests that the Lenders make a Revolving [or Term
Loan] for the account of Borrower (at , Account No.
) pursuant to Section 2.4 of the Credit Agreement as follows:
(a) Amount of Revolving [or Term Loan]:
(b) Borrowing Date of Revolving [or Term Loan]:
(c) [If a Revolving Loan] Type of Revolving Loan
(check one only):
CD Rate with - day Interest Period
----- ----
Eurodollar Rate with - day Interest Period
----- ----
Federal Funds Rate
-----
Base Rate
-----
(d) [If a Term Loan] Type of Term Loan (check one only):
CD Rate with initial - day Interest Period
----- ----
Eurodollar Rate with initial - day Interest Period
----- ----
Federal Funds Rate
-----
Base Rate
-----
(e) [If a Term Loan] Maturity Date of Term Loan:
3. Following this request for a Revolving Loan [or Term Loan], the
aggregate outstanding amount of all Revolving Loans and Term Loans under the
Revolving Note will not exceed the aggregate amount of the Commitments.
4. This Borrowing Advice is executed on by the Borrower.
--------------
BORROWER:
THE CHARLES SCHWAB CORPORATION,
a Delaware Corporation
By
-----------------------------
[Printed Name and Title]
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
Dated as of:
-----------------
Bank of America National Trust
and Savings Association, as Agent
231 South LaSalle Street
Chicago, Illinois 60697
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation (this "Notice") is
delivered to you under the Credit Agreement dated as of June , 1999 (as
amended, restated or otherwise modified, the "Credit Agreement") by and among
The Charles Schwab Corporation, a Delaware corporation (the "Company") (herein
"Borrower"); and Bank of America National Trust and Savings Association, a
national banking association (herein "Bank of America") and the other Lenders
signatory thereto (together with Bank of America, collectively "Lenders"), and
Bank of America as agent for the Lenders (herein "Agent").
1. This Notice is submitted for the purpose of:
(check one and complete applicable information in accordance with the Credit
Agreement)
[ ] Converting or [ ] continuing all or a portion of the
following type of Loan:
(a) (check, as applicable) Base Rate Loan ;
Federal Funds Rate Loan ; Eurodollar Rate
Loan ; CD Rate Loan .
(b) The aggregate outstanding principal balance of the above
Loan is $ .
(c) As applicable, the last day of the current Interest Period
for such Loan is $ .
(d) The principal amount of such Loan to be [converted or
continued] is $ .
(e) Such principal amount should be converted/continued
into the following type of Loan: Base Rate Loan
; Federal Funds Rate Loan ;
Eurodollar Rate Loan ; or CD Rate Loan
.
(f) The requested effective date of the
[conversion/continuation] of such Loan is .
(g) As applicable, the requested Interest Period applicable to
the new Loan is .
2. No Event of Default under the Agreement, or event which with the
passage of time or the giving of notice or both would constitute an Event of
Default under the Credit Agreement, has occurred and is continuing or will be
caused by the advance requested hereby.
3. The representations and warranties set forth in Section Five of the
Credit Agreement are true and correct as if made on the date hereof (except for
such representations and warranties as expressly relate to a prior date).
Capitalized terms used herein which are not defined herein
shall have the respective meanings set forth in the Agreement.
IN WITNESS WHEREOF, the undersigned officer of the Company has
executed this Notice of Conversion/Continuation this day of ,
.
THE CHARLES SCHWAB CORPORATION
By:
--------------------------
Name
Title
[must be signed by an Authorized Officer]
EXHIBIT D
COMMITMENT AND TERMINATION DATE EXTENSION REQUEST
[Date]
[Bank name and Address]
Reference is made to that certain Credit Agreement (364-Day
Commitment) dated as of June , 1999 ("Credit Agreement") entered into by The
Charles Schwab Corporation ("Borrower"), Bank of America National Trust and
Savings Association, as Agent and Lenders party thereto. Terms defined in the
Credit Agreement and not otherwise defined herein are used herein as defined in
the Credit Agreement.
Pursuant to Section 2.11 of the Credit Agreement, Borrower hereby
requests Agent to obtain each Lender's agreement to the extension of such
Lender's Commitment presently in effect, in the amount of $[specify amount of
existing Commitment], and the Termination Date presently in effect for an
additional 364 days.
Agent's execution of a copy of this letter in the space provided
below and the transmission of such executed copy to Borrower shall constitute
all Lenders' acceptance of Borrower's request and all Lenders' agreement to the
364-day extension sought herein. More specifically, upon the execution of a copy
of this letter by Agent, on behalf of Lenders and the transmission thereof to
Borrower within 15 days after Agent's receipt of this letter, (1) the
Termination Date as defined in Section 2.11 of the Credit Agreement shall be
extended 364 days and deemed changed to , and (2) all other dates appearing in
the Credit Agreement that are referred to in Section 2.11 of the Credit
Agreement shall correspondingly be extended 364 days.
This Commitment and Termination Date Extension Request is
executed by Borrower on .
BORROWER:
THE CHARLES SCHWAB CORPORATION,
a Delaware Corporation
By
---------------------------
[Printed Name and Title]
ACCEPTED AND AGREED:
Agent, on Behalf of Lenders
By
------------------------
[Printed Name and Title]
EXHIBIT E
BORROWER'S OPINION OF COUNSEL
[Howard, Rice Letterhead]
[Date]
Bank of America National Trust
and Savings Association, as Agent
231 South LaSalle Street
Chicago, Illinois 60697
Re: Credit Agreement (364-Day Commitment), dated June 25, 1999, among The
Charles Schwab Corporation, Bank of America National Trust and Savings
Association, as Agent and the Lenders party thereto
Ladies and Gentlemen:
This opinion is delivered at the request of The Charles Schwab
Corporation to you in your capacity as Agent, on behalf of the Lenders, under
the Credit Agreement (364-Day Commitment) dated as of June , 1999 (the
"Credit Agreement") among, The Charles Schwab Corporation, a Delaware
corporation ("Borrower"), Bank of America National Trust and Savings
Association, as the Administrative Agent and the Lenders' signatories thereto
(each a "Lender" and collectively, the "Lenders"). This opinion letter speaks as
of close of business on June 25, 1999 (hereafter the "operative date").
We have acted as special counsel to Borrower in connection with
the Credit Agreement. In such capacity we have examined originals, or copies
represented to us by Borrower to be true copies, of the Credit Agreement; and we
have obtained such certificates of such responsible officials of Borrower and of
public officials as we have deemed necessary for purposes of this opinion. We
have assumed without investigation the genuineness of all signatures on original
documents, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as photostatic
copies of originals, and the accuracy and completeness of all corporate records
certified to us by the Borrower to be accurate and complete. We have further
assumed that the Credit Agreement is binding upon and enforceable against the
Agent and the Lenders. As to factual matters, we have relied upon the
representations and warranties contained in and made pursuant to the Credit
Agreement.
Capitalized terms not otherwise defined herein have the meanings
given for such terms in the Credit Agreement. For the purpose of this opinion,
"Loan
Documents" as used herein means the Credit Agreement and the
Notes.
Based upon the foregoing and in reliance thereon, and subject to
the exceptions and qualifications set forth herein, we are of the opinion that:
1. Borrower is a corporation duly formed, validly existing, and
in good standing under the laws of Delaware.
2. Borrower has all requisite corporate power and authority to
execute, deliver and perform all of its obligations under the Loan Documents.
3. Each Loan Document has been duly authorized, executed and
delivered by Borrower. Each Loan Document constitutes the legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such validity, binding nature or enforceability may be
limited by:
(a) the effect of applicable federal or state bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other similar
laws and court decisions relating to or affecting creditors' rights generally;
(b) the effect of legal and equitable principles upon the
availability of creditors' remedies, regardless of whether considered in a
proceeding in equity or at law;
(c) the effect of California judicial decisions involving
statutes or principles of equity which have held that certain covenants or other
provisions of agreements, including without limitation those providing for the
acceleration of indebtedness due under debt instruments upon the occurrence of
events therein described, are unenforceable under circumstances where it cannot
be demonstrated that the enforcement of such provisions is reasonably necessary
for the protection of the lender, has been undertaken in good faith under the
circumstances then existing, and is commercially reasonable;
(d) the effect of Section 1670.5 of the California Civil Code,
which provides that a court may refuse to enforce a contract or may limit the
application thereof or any clause thereof which the court finds as a matter of
law to have been unconscionable at the time it was made;
(e) the unenforceability, under certain circumstances, of
provisions purporting to require the award of attorneys' fees, expenses, or
costs, where such provisions do not satisfy the requirements of California Civil
Code Section 1717 et seq., or in any action where the lender is not the
prevailing party;
(f) the unenforceability, under certain circumstances, of
provisions waiving stated rights or unknown future rights and waiving defenses
to obligations, where such waivers are contrary to applicable law or against
public policy;
(g) the unenforceability, under certain circumstances, of
provisions which provide for penalties, late charges, additional interest in the
event of a default by the borrower or fees or costs related to such charges;
(h) the unenforceability, under certain circumstances, of
provisions to the effect that rights or remedies are not exclusive, that every
right or remedy is cumulative and may be exercised in addition to or with any
other right or remedy, or that the election of some particular remedy or
remedies does not preclude recourse to one or another remedy;
(i) the unenforceability of provisions prohibiting waivers of
provisions of either of the Loan Documents otherwise than in writing to the
extent that Section 1698 of the California Civil Code permits oral modifications
that have been executed;
(j) limitations on the enforceability of release,
contribution, exculpatory, or nonliability provisions, under federal or state
securities laws, Sections 1542 and 1543 of the California Civil Code, and any
other applicable statute or court decisions; and
(k) limitations on the enforceability of any indemnity
obligations imposed upon or undertaken by the borrower to the extent that such
obligations do not satisfy the requirements of Sections 2772 et seq. of the
California Civil Code and any judicial decisions thereunder; provided that the
limitations and qualifications set forth in the immediately preceding
sub-paragraphs (b) through (k) do not, in our opinion, render the remedies
available to the Lenders under the Loan Documents inadequate for the practical
realization of the primary rights and benefits reasonably expected by an
institutional lender in a comparable unsecured credit facility transaction
governed by California law.
The foregoing opinions are subject to the following exceptions
and qualifications:
a. We have not been requested to verify and have not verified
the validity, accuracy, or reasonableness of any of the factual representations
contained in either or both of the Loan Documents, and we express no opinion
with respect to any of such matters.
b. We are members of the bar of the State of California. We
are opining herein only concerning matters governed by the Federal laws of the
United States of America, the substantive laws of the State of California, and
the General Corporation Law of the State of Delaware, and only with respect to
Borrower. We express no opinion concerning the applicability to either or both
of the Loan Documents, or the effect thereon, of the laws of any other
jurisdiction. Furthermore, we express no opinion with respect to choice of law
or conflicts of law, and none of the opinions stated herein shall be deemed to
include or refer to choice of law or conflict of law.
c. We express no opinion on any Federal or state securities
laws as they may relate to either or both of the Loan Documents.
d. We express no opinion as to compliance with the usury laws
of any jurisdiction.
The opinions set forth herein are given as of the operative
date. We disclaim any obligation to notify you or any other person or entity
after the operative date if any change in fact and/or law should change our
opinion with respect to any matters set forth herein. This opinion letter is
rendered to you in your capacity as the Agent on behalf of the Lenders under the
Credit Agreement and may not be relied upon, circulated or quoted, in whole or
in part, by any other person or entity (other than the Lenders and a person or
entity who becomes an assignee or successor in interest of any Lender or
acquires a participation from any Lender consistent with the terms of the Loan
Documents) and shall not be referred to in any report or document furnished to
any other person or entity without our prior written consent; provided, however,
that the foregoing shall not preclude any Lender from describing or otherwise
disclosing the existence or contents of this letter to (i) any bank regulatory
authority having jurisdiction over such Lender, as required by such authority,
(ii) a person or entity who, in good-faith discussions between such Lender and
such person or entity, is proposed to become an assignee or successor in
interest of such Lender or to acquire a participation from the Bank consistent
with the terms of the Loan Documents, and (iii) counsel to the Agent and the
Lenders.
Very truly yours,
HOWARD, RICE, NEMEROVSKI,
CANADY, FALK & RABKIN
A Professional Corporation
By
-----------------------
EXHIBIT F
FORM OF NOTICE OF ASSIGNMENT AND ACCEPTANCE
To: BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement (364-Day Commitment) dated as
of June , 1999 between The Charles Schwab Corporation, a Delaware
corporation ("Borrower"), Lenders from time to time party thereto, and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Administrative Agent (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Agreement", the terms defined therein being used herein as
therein defined).
1. We hereby give you notice of, and request your consent to, the assignment by
(the "Assignor") to (the "Assignee")
of % of the right, title and interest of the Assignor in and to the Loan
Documents, including, without limitation, the right, title and interest of the
Assignor in and to the Commitment of the Assignor, and all outstanding Loans
made by the Assignor. Before giving effect to such assignment:
(a) the aggregate amount of the Assignor's Commitment is $ .
(b) the aggregate principal amount of its outstanding Loans is $ .
2. The Assignee hereby represents and warrants that it has complied with the
requirements of Section 10.8 of the Agreement in connection with this assignment
and acknowledges and agrees that: (a) other than the representation and warranty
that it is the legal and beneficial owner of the Pro Rata Share being assigned
thereby free and clear of any adverse claim, the Assignor has made no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or the execution, legality, validity, enforceability, genuineness or
sufficiency of the Agreement of any other Loan Document; (b) the Assignor had
made no representation or warranty and assumes no responsibility with respect to
the financial condition of Borrower or the performance by Borrower of the
Obligations; (c) it has received a copy of the Agreement, together with copies
of the most recent financial statements delivered pursuant to Section 6.2
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance;
(d) it will independently and without reliance upon Administrative Agent or any
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Agreement; (e) it appoints and authorizes Administrative Agent
to take such action and to exercise such powers under the Agreement and the
other Loan Documents as are delegated to Administrative Agent by the Agreement
and such other Loan Documents; and (f) it will perform in accordance with their
terms all of the obligations which by the terms of the Agreement are required to
be performed by it as a Lender.
3. The Assignee agrees that, upon receiving your consent to such assignment and
form and after , the Assignee will be bound by the terms of the
Loan Documents, with respect to the interest in the Loan Documents assigned to
it as specified above, as fully and to the same extent as if the Assignee were a
Lender originally holding such interest in the Loan Documents.
4. The following administrative details apply to the Assignee:
(a) Offshore Lending Office:
Assignee name:
Address:
Attention:
Telephone:
Telecopier:
(b) Domestic Lending Office:
Assignee name:
Address:
Attention:
Telephone:
Telecopier:
(c) Notice Address:
Assignee name:
Address:
Attention:
Telephone:
Telecopier:
(d) Payment Instructions:
Account No.:
Attention:
Reference:
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[ASSIGNOR]
By:
Name:
Title:
[ASSIGNEE]
By:
Name:
Title:
We hereby consent to the foregoing assignment.
THE CHARLES SCHWAB CORPORATION,
As Borrower
By:
Name:
Title:
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION, as Administrative Agent
By:
Name:
Title:
EXHIBIT G
YEAR 2000 COMPLIANCE STATEMENT
CH02/21097020.17