EXHIBIT 10.1
CREDIT AGREEMENT
(364-DAY COMMITMENT)
DATED AS OF
JUNE 26, 1998
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THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION
CREDIT AGREEMENT (364-DAY COMMITMENT)
THIS CREDIT AGREEMENT (364-DAY COMMITMENT) ("this Agreement") is
entered into as of June 26, 1998, between The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Corporation, a
Delaware corporation (the "Borrower"), and the Bank named on the signature page
hereto (the "Bank").
WHEREAS, the Bank is willing to make revolving credit loans to the
Borrower from time to time through June 25 1999, and to make Term Loans to the
Borrower on or before June 25, 1999 and maturing no later than June 24, 2000, on
the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. DEFINITIONS
Assessment Rate: For any Interest Period for any Advance or Term 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 Confirming Bank
on the first day of such Interest Period for
determining the then current annual assessment payable
by the Bank to the Federal Deposit Insurance
Corporation (or any successor thereto) for such
Corporation's (or successor's) insuring U.S. dollar
time deposits of the Bank 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.
Banking Day: Any Monday, Tuesday, Wednesday, Thursday or Friday,
other than a day on which banks are authorized or
required to be closed in California or New York.
Borrowing Advice: A written request made by the Borrower with respect to
an Advance or Term Loan specifying the information
required in Paragraph 2.3 hereof and executed by the
Borrower from time to time.
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Borrowing Agreement: Any of those separate credit agreements (so long as
the Credit (as defined herein) thereunder has not
been terminated) between the Borrower and any of the
Banks referred to in Schedule I hereto (other than
the Bank) and having terms substantially similar to
those contained in this Agreement. Such Schedule I
may from time to time be amended by the Borrower by
Borrower's delivery to each Bank (including the
Bank) of a new Schedule I, and each such new
Schedule I delivered by the Borrower to each Bank
(including the Bank) shall replace and supersede the
then-existing Schedule I and shall be the Schedule I
referred to in this Agreement; provided, however,
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that no such newly delivered Schedule I shall amend
or otherwise change the name, address, or amount of
Credit applicable to the Bank on the initial
Schedule I hereto without the prior written consent
of the Bank or as otherwise permitted in accordance
with the terms of this Agreement. Each such newly
delivered Schedule I shall include all of the then-
existing credit agreements between the Borrower and
any Bank having terms substantially similar to those
contained in this Agreement so long as the Credit
(as defined herein) thereunder has not been
terminated.
Broker Subsidiary: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc., a California corporation,
and its successors and assigns.
CD Banking Day: Any Banking Day on which dealings in bank certificates
of deposit are conducted by New York City certificate
of deposit dealers.
CD Rate: For any Interest Period for any Advance or Term 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
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annum determined by the Confirming Bank 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 CD Reference Banks for their
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 Confirming
Bank for the purchase at face value of such
certificates of deposit in an amount comparable to
the Advance or Term Loan for which the CD Rate has
been selected and having a maturity comparable to
such Interest Period or (bb) in the event the
Confirming Bank cannot, without undue effort,
obtain rates from such CD Reference Banks, 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 Advance or Term Loan
for which the CD Rate has been selected or is
applicable, the percentage (expressed as a decimal)
as calculated by the Confirming Bank 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,
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without limitation, basic, supplemental, marginal and
emergency reserves) for a bank with deposits exceeding
five billion dollars that is 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 Advance or Term Loan for which the CD Rate has
been selected (such bank's reserve ratio on such time
deposits in effect on June __, 1998 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 Reference Banks: Bank of America NT&SA
Citibank, N.A.
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
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Borrower providing for such Business Combination.
Change in Law
Affecting Cost: The occurrence of any one of the following events:
(a) the imposition, modification or application of any
reserve, capital adequacy requirement, special
deposit or similar requirement against assets held
by, or deposits in or for the account of, or
commitments, advances or loans by, or any other
acquisition of funds by, the Bank (other than such
requirements described in the Eurodollar Rate
Reserve Percentage section hereof), or the
imposition upon the Bank of any other condition
with respect to the London interbank market or to
this Agreement or any borrowing hereunder,
(b) a change in the basis of taxation of payments to
the Bank of principal, interest or any other
amount payable hereunder (except for changes in
Federal, state or local income tax rates and their
equivalents), or
(c) the adoption or enactment of any applicable law,
treaty, regulation or directive, or any change
therein or in the interpretation or application
thereof, or compliance by the Bank with any
request (whether or not having the force of law)
of any relevant government or corporation entity.
Closing Date: June 26, 1998
Confirming Bank: Citibank, N.A.
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Confirming Bank
Agreement: The Confirming Bank Agreement between the
Borrower and Citibank, N.A. dated June 26, 1998,
in substantially the form attached as Exhibit B
to the Credit Agreement, as the same may be
amended from time to time.
Controlled Subsidiary: Any corporation 80% of whose voting stock (except
for any qualifying shares) is owned directly or
indirectly by the Borrower.
Federal Funds
Effective Rate: For any day, an 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 Banking Day, for the next preceding
Banking Day) by the Federal Reserve Bank of New
York; or, if such rate is not published for any
day which is a Banking Day, an interest rate per
annum equal to the arithmetic mean 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
each Reference Rate Reference Bank from three
Federal funds brokers of recognized standing
selected by each Reference Rate Reference Bank in
its sole discretion.
Interest Period: Any period specified in accordance with Paragraph
2.4 hereof.
Intermediate Parent: Schwab Holdings, Inc. and its successors and
assigns.
Eurodollar Banking Day: Any Banking Day on which dealings in dollar
deposits are conducted by and among banks in the
London Eurodollar Market, or such other
Eurodollar Market as may from time to time be
selected by the Bank with the approval of the
Borrower.
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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
Advance 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 am. (London time) two Eurodollar Banking 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 as determined in accordance with the provisions
of the Confirming Bank Agreement or (b) if fewer than
two offered rates appear, in immediately available
funds to the Eurodollar Rate Reference Banks 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 Eurodollar Banking Days prior to the
commencement of the relevant Interest Period,
determined in accordance with the provisions of the
Confirming Bank Agreement, by (ii) a percentage
(expressed as a decimal) equal to 1.00 minus the
Eurodollar Rate Reserve Percentage.
Eurodollar Rate Reserve
Percentage: For any Interest Period for any Advance or Term Loan
for which the Eurodollar Rate has been selected or is
applicable, the percentage (expressed as a decimal)
as calculated by the Confirming Bank 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 Bank under Regulation D (or any successor
regulation thereof) as amended to the date hereof
(including such reserve requirements as become
applicable to the Bank pursuant to phase-in or other
similar requirements of Regulation D at any time
subsequent to the date hereof) in respect of
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"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.
Eurodollar Rate
Reference Banks: Union Bank of Switzerland
The Bank of New York
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.
Minimum Stockholder's
Equity: As of the last day of September 1998, and the last day
of each fiscal quarter thereafter, the greater of:
(a) $575 million, or
(b) $575 million plus 40% of the sum of cumulative Net
Earnings of the Borrower and its Subsidiaries
beginning with July 1, 1998.
MSI: ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, 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
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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.
Notice of Interest
Period: A written request made by the Borrower with respect to
an outstanding Term Loan prior to its maturity date
specifying the information required in Paragraph 2.3
hereof and executed by the Borrower from time to time.
Reference Rate: For any Interest Period for any Advance or Term Loan
for which the Reference Rate has been selected (or for
any post-Interest Period period covered by clause (ii)
of Paragraph 2.7 hereof), the average daily per annum
rate of interest calculated by the Confirming Bank
during such Interest Period or period, with the rate on
each day being equal to the higher of (i) the highest
per annum rate of interest (adjusted upward, if
necessary, to the nearest 1/16 of 1%) publicly
announced by any of the Reference Rate Reference Banks
on such day as its "prime rate," "prime commercial
lending rate," "reference rate," or "base rate," as the
case may be, and (ii) the highest per annum Federal
Funds Effective Rate available to any Reference Rate
Reference Bank, plus 1/2 of 1%.
Reference Rate
Reference Banks: The First National Bank of Chicago
Chase Manhattan Bank
Revolving Credit
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Facility: The revolving credit facility available to the
Borrower pursuant to paragraph 2.1 hereof.
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 Loan Facility: The term loan facility available to the Borrower
pursuant to Paragraph 2.2 hereof.
2. THE FACILITIES
The Bank agrees that consistent with the terms and conditions set
forth in this Article 2 respecting Advances under the Revolving Credit Facility
and Term Loans under the Term Loan Facility, it will lend to the Borrower sums
which, in the aggregate principal amount outstanding at any one time, shall not
exceed the dollar amount of the Bank's commitment as specified in Schedule I
hereto (the "Commitment"). Such amount, as it may from time to time be reduced
pursuant to Paragraph 2.11 hereof, shall be referred to as the "Credit," and the
Credit shall encompass both the Revolving Credit Facility described in Paragraph
2.1 hereof and the Term Loan Facility described in Paragraph 2.2 hereof.
2.1 The Revolving Credit Facility. From time to time commencing on
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June 26, 1998 and ending on June 25, 1999, the Borrower may borrow, repay at the
end of any Interest Period (or otherwise as permitted by Paragraph 3.2 hereof)
and reborrow amounts during the continuation of the Credit, as the Borrower may
see fit, subject to the applicable provisions of this Agreement. Each such
revolving credit loan made hereunder (an "Advance") shall be in the amount of
$1,000,000 or integral multiples thereof and shall become due and payable on the
last day of the Interest Period for such Advance.
The obligation of the Borrower to repay the aggregate unpaid principal
amount of the Advances shall be evidenced by a promissory note of
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the Borrower (the "Revolving Note") in substantially the form attached hereto as
Exhibit A-1, with the blanks appropriately completed, payable to the order of
the Bank, bearing interest as hereinafter specified. The Revolving Note shall
be dated, and shall be delivered to the Bank, on the date of the execution and
delivery of this Agreement by the Borrower. The Bank shall, and is hereby
authorized by the Borrower to, endorse on the schedule contained on the
Revolving Note, or on a continuation of such schedule attached thereto and made
a part thereof, appropriate notations regarding the Advances evidenced by the
Revolving Note as specifically provided therein; 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.
2.2 Term Loan Facility. The Borrower from time to time may borrow
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under the Term Loan Facility (and may reborrow any amount theretofore prepaid)
until close of business on June 25, 1999, 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 amount of $1,000,000 or an integral multiple thereof 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 Advances and Term Loans made
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by the Bank; provided, however, that to the extent the proceeds of a Term Loan
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are used to repay an outstanding Advance (or a portion thereof), such Advance
(or portion thereof) shall not be considered part of the aggregate principal
amount of outstanding Advances made by the Bank 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 Advances made by the Bank exceed the Credit,
and under no circumstances shall the Bank be obligated (i) to make any Term Loan
(nor may the Borrower reborrow any amount heretofore prepaid) after June 25,
1999, 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
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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 new Notice of Interest Period pursuant to Paragraphs 2.3, 2.4 and
2.5 hereof.
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The obligation of the Borrower to repay the aggregate unpaid principal
amount of the Term Loans shall be evidenced by a promissory note of the Borrower
(the "Term Note") in substantially the form attached hereto as Exhibit A-2, with
the blanks appropriately completed, payable to the order of the Bank, bearing
interest as hereinafter specified. The Term Note shall be dated, and shall be
delivered to the Bank, on the date of the execution and delivery of this
Agreement by the Borrower. The Bank shall, and is hereby authorized by the
Borrower to, endorse on the schedule contained on the Term Note, or on a
continuation of such schedule attached thereto and made a part thereof,
appropriate notations regarding the Term Loans evidenced by the Term Note as
specifically provided therein; provided, however, that the failure to make, or
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error in making, any such notation shall not limit or otherwise affect the
obligations of the Borrower hereunder or under the Term Note.
2.3 Making of Advances and Term Loans; Interest Periods; Notice.
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Whenever the Borrower desires the Bank to make an Advance or a Term Loan, or to
specify a new Interest Period in respect of a Term Loan as to which an Interest
Period is expiring (a "new Term Loan Interest Period"), it shall give the Bank
(i) same Banking Day's irrevocable written notice prior to 2:00 p.m. (New York
City time) for Reference Rate Advances or Reference Rate Term Loans (or New Term
Loan Interest Periods to which the Reference Rate applies) to be made on such
Banking Day, (ii) one CD Banking Day's prior irrevocable written notice for CD
Rate Advances or CD Term Loans (or New Term Loan Interest Periods to which the
CD Rate applies), or (iii) three Eurodollar Banking Days' prior irrevocable
written notice for Eurodollar Rate Advances or Eurodollar Term Loans (or new
Term Loan Interest Periods to which the Eurodollar Rate applies) (each such
notice to be in the form of a Borrowing Advice in substantially the form
attached hereto as Exhibit C) setting forth the following information:
(a) The date, which shall be either a Banking Day, a CD Banking day,
or a Eurodollar Banking Day, on which such Advance or Term Loan
is to be made or on which such New Term Loan Interest Period is
to commence;
(b) The Interest Period selected in accordance with Paragraph 2.4
hereof;
(c) The interest rate option selected in accordance with Paragraph
2.5 hereof; and
(d) The aggregate principal amount of the Advance or Term Loan to
which such Interest Period and interest rate shall apply.
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Notice of each Borrowing Advice or Notice of Interest Period
indicating the selection of an Interest Period and whether the interest
calculation is to be based on the Eurodollar Rate, the CD Rate or the Reference
Rate shall simultaneously be given to the Confirming Bank by the Borrower. Any
notice required pursuant to this Paragraph 2.3 for a same day Reference Rate
Advance or Reference Rate Term Loan shall be given no later than 2:00 p.m. (New
York City time) on the date of such Advance or Term Loan. Any other notice
required pursuant to this Paragraph 2.3 shall be given no later than 12:00 noon
(New York City time) on the date such notice is required to be given.
With respect to any Advance having an Interest Period ending on or
before June 25, 1999, if prior to the last day of the Interest Period for such
Advance the Borrower fails timely to provide a new Borrowing Advice in
accordance with this Paragraph 2.3, such Advance shall, on the last day of the
then-existing Interest Period for such Advance, automatically convert into a new
Reference Rate Advance with an Interest Period of thirty (30) days (or, in the
event that there are fewer than thirty (30) days remaining to June 25, 1999, an
Interest Period of the number of days remaining to June 25, 1999). 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 Bank 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 Paragraph 7.1,
(ii) the Borrower's Stockholders' Equity is not below the Minimum Stockholders'
Equity as described in Paragraph 7.2, and (iii) no amount owing with respect to
any Commitment Fee, any outstanding Advance, any outstanding Term Loan, 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 Interest Period in
accordance with this Paragraph 2.3, 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 Term Loan 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 Reference Rate.
Each Advance or Term Loan to the Borrower under this Agreement shall
be made by 12:00 noon (New York City time) on the date the Advance is to be made
(except with respect to any Reference Rate Advance or Reference Rate Term Loan
for which same-day written notice has been given by Borrower, such Advance or
Term Loan shall be made by 3:30 p.m. (New York City time) on the date of such
same-day written notice), and shall be in
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immediately available funds credited to the account of Borrower with the Bank or
wired to the Borrower's account at Citibank, N.A. (Account 4055-4016) or such
other account as may be designated by the Borrower.
The Bank, by notice to the Borrower (to be given not later than two
Banking Days prior to the initial Advance or Term Loan hereunder) may request
that Advances 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 Advances) and Term Notes (in the case of Term Loans), substantially
in the form of Exhibit A-1 hereto (in the case of Advances) and Exhibit A-2
hereto (in the case of Term Loans), payable to the order of such Bank for the
account of its office, branch or affiliate it may designate as its Eurodollar
lending office. Each reference to the Bank in Paragraph 2.6(b) and 3.5 shall
include the Bank's designated Eurodollar lending office; all notices given to
the Bank in accordance with this Agreement shall be deemed to have been given to
such Eurodollar lending office.
2.4 Interest Periods. The Borrower may select the Interest Period
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(as defined in the next sentence) for each Advance and an Interest Period
applicable from time to time for each Term Loan, it being understood that the
Borrower (i) may request multiple Advances on the same day and may select a
different Interest Period for each such Advance; and (ii) may request multiple
Term Loans having different Interest Periods (including New Term Loan Interest
Periods) applicable thereto; provided, however, that each such Advance or Term
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Loan shall be in the amount of $1,000,000 or an integral multiple thereof. An
Interest Period shall be each period, as selected by the Borrower in accordance
with the terms of this Agreement, (i) in the case of each Advance, beginning on
the day such Advance is made under this Agreement, and (ii) in the case of a
Term Loan, beginning on the date specified in the Borrowing Advice or Notice of
Interest Period pertaining thereto, as the case may be, and ending on the date
specified by the Borrower:
(a) Not more than 180 days thereafter, in the case of any Interest
Period for which the interest is to be based on the Reference
Rate, provided that if the last day of an Interest Period would
be a day that is not a Banking Day, such Interest Period shall be
extended to the next succeeding Banking Day;
(b) 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 CD Banking Day, such Interest Period shall
be extended to the next succeeding CD Banking Day; or
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(c) not less than 7 nor more than 180 days 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 Eurodollar Banking Day, such Interest
Period shall be extended to the next succeeding Eurodollar
Banking Day, unless such next succeeding Eurodollar Banking Day
is in a different calendar month, in which case such interest
period shall end on the next preceding Eurodollar Banking Day;
provided, however, that (i) no Interest Period applicable to any Advance shall
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extend beyond September 23, 1999; 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
24, 2000.
2.5 Interest Rates. Each Advance and each Term Loan, while
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outstanding, shall bear interest, payable on the last day of each Interest
Period applicable thereto (provided that (i) if any Advance, Term Loan or New
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Term Loan Interest Period is based on the Reference Rate, interest attributable
thereto also shall be payable on the last day of each calendar quarter that
occurs before the last day of the applicable Interest Period, or (ii) if the
Interest Period is longer than 90 days, interest with respect thereto also shall
be payable on the Banking Day following the 90th day from the commencement of
the Interest Period) at a rate per annum (based on a 360-day year and actual
days elapsed for Eurodollar Rate and CD Rate Advances and Eurodollar Rate and CD
Rate Term Loans, and a 365-day year and actual days elapsed for Reference Rate
Advances and Reference Rate Term Loans, counting the first day but not the last
day of any Interest Period) that shall be equal to one of the following as
selected by the Borrower:
(a) the Eurodollar Rate, plus 1/4 of 1% per annum;
(b) the CD Rate, plus 3/8 of 1% per annum; or
(c) the Reference Rate.
2.6 Substitute Rates. If upon receipt by the Bank of a Borrowing
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Advice relating to an Advance or of a Borrowing Advice or Notice of Interest
Period relating to a Term Loan:
(a) the Confirming Bank shall determine in accordance with the
provisions of the Confirming Bank Agreement that by reason of
changes affecting the New York City certificate of deposit market
and/or the London interbank market,
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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 Bank 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 Bank or the New
York City certificate of deposit market and/or the London
interbank market, the CD Rate and/or Eurodollar Rate, determined
in accordance with the Confirming Bank Agreement shall no longer
represent the effective cost to the Bank of certificates of
deposit and/or of U.S. dollar deposits, respectively, in the
relevant amount and for the relevant period; or
(c) the Confirming Bank or the Bank 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, and in any such event, the Bank and the Borrower shall agree upon a rate
of interest applicable to the Advance or Term Loan that is reasonably judged by
them to be the nearest equivalent of the selected rate; provided, however, that
if no such rate is judged by them to be equivalent to the selected rate, the
basis for determining the rate of interest and the Interest Period shall be the
Reference Rate for an Interest Period of 30 days.
2.7 Interest Upon Default. After the principal amount of any Advance
---------------------
or Term Loan, accrued interest upon such Advance or Term Loan, 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 Advance or Term
Loan at a rate per annum equal to 1% per annum in excess of the rate or rates in
effect with respect to such Advance or Term Loan and (ii) thereafter, at a rate
per annum equal to 1% per annum in excess of the Reference Rate.
2.8 Commitment Fee. Through June 25, 1999, the Borrower will pay to
--------------
the Bank a credit commitment fee (the "Commitment Fee") for each
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calendar quarter at a rate per annum (based on a 360-day year and actual days
elapsed) of 80/1000 of 1% of the average daily unused principal amount of the
Credit in effect during such quarter, payable on the first Banking Day after the
end of such quarter (or portion of such quarter, if applicable), and upon
termination of the Credit; provided, however, that any such payment upon
-------- -------
termination of the Credit during any calendar quarter shall be in lieu of (and
not in addition to) the payment otherwise due for such portion of such quarter
on the first Banking Day after the end of such quarter.
2.9 Facility Fee. On June 26, 1998, the Borrower shall pay a
------------
facility fee to the Bank in an amount equal to 20/1000 of 1% of the Bank's
Commitment as specified in Schedule I.
2.10 Confirming Bank Fee. On June 26, 1998, the Borrower shall pay
-------------------
to the Confirming Bank a fee of $5,000.
2.11 Reduction of Credit. The Borrower, from time to time, upon at
-------------------
least three Banking Days' written notice to the Bank, may permanently reduce any
then-unutilized portion of the Credit in units of $1,000,000 without penalty or
premium; thereafter, during the continuation of the Credit, the computation of
the Commitment Fee and the Bank's obligations for Advances or Term Loans shall
be based upon such reduced Credit. The Borrower, from time to time, upon at
least three Banking Days' written notice to the Bank, may permanently reduce all
or any part of the then-utilized portion of the Credit by making payment to the
Bank on such utilized portion pursuant to Paragraph 2.1 or Paragraph 3.2 hereof,
and thereafter, during the continuation of the Credit, the computation of the
Commitment Fee and the Bank's obligations for Advances or Term Loans shall be
based upon such reduced Credit; provided, however, that in order for a payment
-------- -------
to result in a permanent reduction of the Credit under this paragraph, the
written notice required under this paragraph must expressly provide that the
payment is being tendered pursuant to this paragraph and is intended to result
in a permanent reduction of the Credit. Any written notice delivered pursuant
to either of the foregoing two sentences shall be irrevocable unless the Bank
consents in writing to its revocation. In the event the Credit shall be reduced
to zero pursuant to this paragraph, 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 Bank's obligations to make any
further Advances or Term Loans under this Agreement.
2.12 Termination Date; Extensions. The termination date of the
----------------------------
Bank's Commitment with respect to the Credit (the "Termination Date"), including
both the Revolving Credit Facility under Paragraph 2.1 hereof and
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the Term Loan Facility under Paragraph 2.2 hereof, is initially June 25, 1999.
At any time no earlier than sixty (60) days and no later than thirty (30) days
prior to the Termination Date then in effect (whether the initial Termination
Date of June 25, 1999 or any later Termination Date as extended under this
Paragraph 2.12), the Borrower may, by written notice to the Bank 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 irreovcable and binding
upon the Borrower. If the Bank agrees, in its individual and sole discretion,
to so extend its Commitment and the Termination Date, it shall evidence such
agreement by executing and returning to the Borrower a copy of the Borrower's
written request countersigned by the Bank and delivered to the Borrower by the
Bank no later than fifteen (15) days after the Bank's receipt of Borrower's
written request. If the Bank fails to so respond to and accept the Borrower's
request for extension of the Termination Date then in effect, the Bank's
Commitment shall be terminated on the Termination Date then in effect. If, on
the other hand, the Bank 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 Bank, (i) the Bank's
Commitment 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 25, 1999",
"September 23, 1999" and "June 24, 2000" (and any prior extension thereof
pursuant to this Paragraph 2.12) also shall automatically be correspondingly
extended for 364 days.
3. PAYMENT
3.1 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
(New York City time) on the date when due at the principal office of the Bank or
at such other place as the Bank may, from time to time, designate in writing to
the Borrower.
3.2 Optional Prepayment. The Borrower shall be entitled to prepay the
-------------------
Revolving Note and/or the Term Note in whole or in part (such part being in
integral multiples of $1,000,000) without premium or penalty. In the case of
each such prepayment (i) the Borrower shall give to the Bank at least three
Banking Days' prior irrevocable notice of the aggregate principal amount of any
such prepayment, (ii) at the time of prepayment, the Borrower shall pay all
unpaid interest accrued on the amount prepaid, and (iii) the Borrower shall pay
the Bank any amount payable to the Bank in accordance with Paragraph 3.4 hereof
as a result of such prepayment.
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3.3 Net Payments. All payments by Borrower hereunder and under the
------------
Revolving Note and the Term Note 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
government or any political subdivision or taxing authority thereof
(collectively, "Taxes"), shall not be less than the amounts otherwise specified
to be paid under this Agreement. Notwithstanding the foregoing, the Borrower
shall not be liable for the payment of any tax on or measured by the net income
of the Bank pursuant to the laws of the jurisdiction where an office of the Bank
making any loan hereunder is located or does business. The Borrower shall pay
all Taxes when due and shall promptly send to the Bank 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 Bank. If the Borrower fails to pay any Taxes to the
appropriate taxing authorities when due or fails to remit to the Bank any such
original tax receipts or certified copies thereof as aforesaid or other required
documentary evidence, the Borrower shall indemnify the Bank for any taxes,
interest or penalties that may become payable by the Bank as a result of such
failure.
3.4 Indemnity for Losses. The Borrower shall indemnify the Bank for
--------------------
any loss or expense (including, without limitation, any interest paid by the
Bank to lenders of funds borrowed by it to make or maintain any Advance or Term
Loan and any loss incurred by the Bank in connection with the reemployment of
funds obtained by the Bank for the purpose of making or maintaining any Advance
or Term Loan hereunder) which the Bank may sustain as a result of (i) any
payment or prepayment of any Advance or Term Loan on a date other than the last
day of any Interest Period, (ii) any failure of the Borrower to borrow on a date
specified in a Borrowing Advice furnished hereunder or (iii) any failure by the
Borrower to prepay any amount on the date and in the amount specified in a
notice furnished by the Borrower in accordance with the terms hereof. A
certificate as to any amounts payable pursuant to the foregoing submitted by the
Bank to the Borrower shall, in the absence of manifest error, be conclusive.
3.5 Change in Law. In the event that the Bank shall become subject
-------------
to any increased cost (including, but not limited to, taxes, increases in
reserves and reductions in amounts receivable by the Bank) with respect to this
Agreement or making or maintaining any borrowing hereunder as a result of any
Change in Law Affecting Cost, then as soon as practicable thereafter, the Bank
shall give the Borrower notice of such Change in Law Affecting Cost and a
certificate containing the amount and basis of demand, and the Borrower shall
pay to the Bank additional amounts that will compensate the Bank for such
increased cost or reduced amount receivable and, at the option of the
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Borrower on notice to the Bank, the Borrower may either elect to (i) change the
basis for determining interest on outstanding indebtedness for the remainder of
the applicable Interest Period in accordance with Paragraph 2.4 hereof, or (ii)
prepay the principal amount outstanding with accrued interest thereon to the
date of prepayment. If such change or prepayment is made on a day that is not
the last day of an Interest Period, the Borrower shall pay the Bank, upon
request, such amount or amounts as will compensate the Bank for any loss or
expense incurred by the Bank in the redeployment of funds obtained by the Bank
for the purpose of making or maintaining the Advances or Term Loans provided for
herein. A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by the Bank to the Borrower shall, in the absence
of manifest error, be conclusive.
4. CONDITIONS
4.1 Conditions Precedent to the Effectiveness of this Agreement. The
-----------------------------------------------------------
Borrower shall deliver to the Bank the following documents concurrently with the
execution of this Agreement:
(a) A written opinion, dated the date hereof, of counsel for the
Borrower, in the form of Exhibit E.
(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, 1997 not reflected on its Quarterly Report on Form
10-Q filed with the SEC for the period ending March 31, 1998.
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(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
Interest Period, and the Revolving Note and the Term Note. The
Bank may rely on such certificate with respect to the Advances
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.
4.2 Conditions Precedent to Advances and Term Loans. The Bank shall
-----------------------------------------------
not be required to make any Advance or Term Loan pursuant to Article 2 hereof:
(a) when the Credit, the Revolving Credit Facility (in the case of an
Advance) or the Term Loan Facility (in the case of a Term Loan)
has been terminated; or
(b) when 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) when the Broker Subsidiary or MSI is in violation of minimum net
capital requirements as described in Paragraph 7.1; or
(d) when the Borrower's Stockholder's Equity is below the Minimum
Stockholders' Equity as described in Paragraph 7.2.; or
(e) when any amount owing with respect to any Commitment Fee or any
outstanding Advance or Term Loan or any interest thereon or any
other amount payable hereunder is due and unpaid.
Each Borrowing Advice given by the Borrower shall be deemed to be a
representation and warranty by the Borrower to the Bank, effective on and as of
the date of the Advance 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.
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5. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants, as of the date of delivery of
this Agreement and as of the date of any Advance or Term Loan, as follows:
5.1 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 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 This Agreement has been duly authorized and executed by the
Borrower, and when delivered to the Bank 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 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 Except as disclosed in writing by Borrower, no consents of others
(including, without limitation, stockholders and creditors of the
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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 this Agreement.
5.6 The consolidated financial statements of the Borrower contained
in the documents previously delivered to the Bank have been prepared in
accordance with U.S. generally accepted accounting principles and present fairly
the consolidated financial position of the Borrower.
5.7 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 required by law or the applicable rules of
the SEC and the National Association of Securities Dealers, Inc.
5.8 The Broker Subsidiary is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended.
5.9 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 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 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 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
-23-
prohibited transaction set forth in Section 406 of ERISA or Section 4975(c) of
the Internal Revenue Code of 1986.
5.12 The Borrower will not use any amounts advanced to 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 This Agreement contains terms no less favorable to the Bank than
the terms of any Borrowing Agreement.
5.14 The Borrower will not use the proceeds of any loan provided
hereby in such a manner as to result in a violation of Regulations G, T, U or X
of the Board of Governors of the Federal Reserve System.
5.15 The persons named for such purpose in the certificates delivered
pursuant to Paragraph 4.1(e) hereof are authorized to execute Borrowing Advices.
5.16 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.
5.17 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 materially adversely affect the business or the financial position
of the Borrower.
5.18 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.
6. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as the Credit shall
continue or any Advance or Term Loan by the Bank remains outstanding
-24-
and until full payment of all amounts due to the Bank hereunder, it will, unless
and to the extent the Bank waives compliance in writing:
6.1 Give prompt notice to the Bank, no later than three Banking 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 Deliver to the Bank, within ten Banking 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
(but, in the event the Borrower requests an extension of any such filing from
the SEC, promptly (but not later than the second Banking Day following the
filing of such request) deliver a copy of such request to the Bank).
6.3 Maintain and keep in force in adequate amounts such insurance as
is usual in the business carried on by the Borrower.
6.4 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 Advise the Bank, in a timely manner, of material changes to the
nature of business of the Borrower or its 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 With respect to each and any Advance or Term Loan requested by
the Borrower under this Agreement (a "primary Advance" or a "primary Term Loan,"
as the case may be), the Borrower will concurrently request an Advance (or Term
Loan) under each of the Borrowing Agreements (each such other Advance or Term
Loan under each of the Borrowing Agreements being hereinafter individually
referred to as an "other Advance" or "other Term Loan" and collectively referred
to as the "other Advances" or "other Term Loans," as the case may be), with each
such other Advance or other Term Loan being requested in an amount equal to the
same percentage of the Credit under the applicable Borrowing Agreement as the
primary Advance or Term Loan constitutes as a percentage of the Credit under
this Agreement. As an illustration of the application of this Paragraph 6.6 and
by way of example only, if the Borrower requests an Advance under this Agreement
that is in an amount equal to 10% of the Credit under this Agreement, the
Borrower shall simultaneously seek an other Advance under each of the Borrowing
Agreements, each of which other Advances shall be
-25-
requested in an amount equal to 10% of the Credit under the applicable Borrowing
Agreement.
7. NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as the Credit shall
continue or any Advance or Term Loan by the Bank remains outstanding and until
full payment of all amounts due to the Bank hereunder, unless and to the extent
the Bank waives compliance in writing:
7.1 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 The Borrower will not allow Stockholder's Equity to fall below
the Minimum Stockholders' Equity.
7.3 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 (i) immediately preceding, 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 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) stock loans, (iv) obligations to banks for disbursement
accounts,
-26-
(v) 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; (vi) Indebtedness
incurred for the purchase, installation or servicing of computer
equipment and software; and (vi) Indebtedness incurred in the
ordinary course of the Broker Subsidiary's business, to the
extent not already included in the foregoing clauses (i) through
(vi);
(b) intercompany Indebtedness; and
(c) other Indebtedness in the aggregate not exceeding $100,000,000.
7.5 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 Note and the Term Note 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 Paragraph 7.6 below).
7.6 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
-27-
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. EVENT OF DEFAULT
8.1 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 Note or the Term Note 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 Note or the Term Note in accordance with the terms
thereof on the date when due or shall fail to pay when due (after
expiration of any applicable grace periods) any principal or
interest with respect to any advance or other loan under any of
the Borrowing Agreements.
(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 Bank or its 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 Bank a written notice specifying such default or breach and
requiring it to be remedied.
(e) An event of default as defined under any Borrowing Agreement, or
an event of default as defined in any
-28-
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 Bank.
(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
-29-
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
▇▇▇▇▇'▇ Investor Service.
8.2 If an Event of Default occurs and is continuing, then and in
every such case the Bank at its option may terminate the Credit and all
obligations of the Bank to make any further Advances or Term Loans, and declare
the principal, any accrued and unpaid interest, any accrued and unpaid
Commitment Fees, or any other amounts payable under the outstanding Revolving
Note and/or under the outstanding Term Note, to be due and payable immediately,
by a notice in writing to the Borrower, and upon such declaration such
principal, interest, Commitment Fees, or other amounts payable hereunder 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 subparagraph (f) or (g) of Paragraph 8.1,
automatically without any notice to the Borrower or any other act by the Bank,
the Credit and the Bank's obligations to make any further Advances or Term Loans
shall thereupon terminate and the outstanding principal of the Revolving Note
and of the Term Note, 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 presentment, demand, protest or other notice of any
kind, all of which are expressly waived by the Borrower.
-30-
9. MISCELLANEOUS
9.1 Notices. Any communications between the parties hereto or
-------
notices provided herein shall be effective upon receipt and shall be, unless
otherwise specified, in writing (which may include telex or telecopy
transmission) and shall be given to the Bank at the address specified in
Schedule I hereto and to the Borrower at The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Corporation, Attn:
Treasury Department, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, fax
number (▇▇▇) ▇▇▇-▇▇▇▇, or to such other address as either party shall hereafter
have indicated to the other party in writing. In the event the Borrower
consents to any assignment by the Bank with respect to this Agreement, upon
receiving written notice from the Bank that such assignment has been effected,
the Borrower thereafter shall give all notices required to be given under this
Agreement to the assignee at the address specified for such assignee by the Bank
or such assignee. Notwithstanding the granting of any participation by the Bank
with respect to this Agreement as permitted by Paragraph 9.4, all notices
required to be given under this Agreement may continue to be given by the
Borrower only to the Bank and shall be effective upon delivery to the Bank as
though no such participation had been granted.
9.2 Waivers. No delay or omission to exercise any right, power or
-------
remedy accruing to the Bank upon any breach or default of the Borrower under
this Agreement shall impair any such right, power or remedy of the Bank, nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any amendment,
modification, waiver, permit, consent or approval of any kind or character on
the part of the Bank of any breach or default under this Agreement, or any
waiver on the part of the Bank of any provision or condition of this Agreement,
must be in writing signed by the Bank and shall be effective only to the extent
specifically set forth in writing. All remedies, either under this Agreement or
by law or otherwise afforded to the Bank, shall be cumulative and not
alternative.
9.3 Expenses. The Borrower agrees to pay all reasonable out-of-
--------
pocket expenses of the Bank (including the reasonable fees and expenses of its
counsel) in connection with the negotiation, preparation, execution and delivery
of this Agreement, any amendments or modifications of or supplements to any of
the foregoing and any and all other documents furnished in connection herewith,
as well as, after the occurrence of any event that upon a lapse of time or
notice or both, would become an Event of Default, all costs and expenses
(including reasonable fees and expenses of counsel who may be employees of Bank)
in connection with the enforcement or administration (including, without
limitation, actions taken by the Bank in
-31-
connection with litigation or regulatory proceedings as to which this Agreement
becomes relevant) of, or legal advice in respect to the rights and
responsibilities or the exercise of any right or remedy under, any provision of
this Agreement, the Revolving Note, the Term Note, and any amendments or
modifications of or supplements to any of the foregoing.
9.4 Assignment. Except as hereinafter set forth in this Paragraph
----------
9.4, no rights of the Bank hereunder may be assigned, transferred, sold,
assigned, pledged or otherwise disposed of, and no lien, charge or other
encumbrance may be created or permitted to be created thereon without the prior
written consent of the Borrower.
(a) Transfers to Affiliated Entities and Federal Reserve Banks. The
Bank shall have the right at any time and from time to time, to
transfer any loan hereunder to any Federal Reserve Bank or to any
parent, subsidiary, affiliate, branch or other related office of
the Bank which is not engaged in the securities brokerage
business or the investment advisory business, and to grant
participations hereunder to any such Federal Reserve Bank,
parent, subsidiary, affiliate, branch or other related office of
the Bank. In no event shall any such transferee or participant
be considered a party to the Agreement, and Bank shall continue
to service any loan transferred pursuant to this Paragraph 9.4(a)
and shall remain liable for the performance of all of its
obligations under this Agreement. Notwithstanding any such
transfer or grant of a participation, Borrower shall continue to
make payments required under this Agreement to Bank unless and
until otherwise notified in writing by Bank, and Bank agrees to
indemnify and hold Borrower harmless from and against any claims
by any transferee or participant arising out of any payment made
to Bank in accordance with this Paragraph 9.4(a).
(b) Transfers to Unrelated Entities. Subject to the provisions of
this Paragraph 9.4(b), the Bank may at any time sell to one or
more unrelated financial institutions not engaged in the
securities brokerage business or the investment advisory business
(each a "Participant") participating interests in any Advance or
Term Loans, the Revolving Note, the Term Note, the Bank's Credit
hereunder or any other interest of the Bank hereunder. In the
event of any such sale by the Bank to a Participant, the Bank's
obligations under this Agreement shall remain unchanged, the Bank
shall remain solely responsible for the
-32-
performance hereof, the Bank shall remain the holder of the
Revolving Note and of the Term Note for all purposes under this
Agreement, and the Borrower shall continue to deal solely and
directly with the Bank in connection with the Bank's rights and
obligations under this Agreement. Any agreement pursuant to
which Bank may grant a participation shall provide that the Bank
shall retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without
limitation, the right to declare an acceleration or default
hereunder and the right to approve any amendment, modification or
waiver of any provision of this Agreement.
The Borrower may not assign this Agreement or any of its rights
hereunder without the prior written consent of the Bank.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the Bank and the Borrower and their respective successors and
assigns, and the term "Borrower" as used in this Agreement shall include the
Borrower and all such successors and assigns.
9.5 Confidentiality. Bank agrees to hold any confidential
---------------
information that it may receive from Borrower pursuant to this Agreement in
confidence, except for disclosure: (a) to legal counsel and accountants for
Borrower or Bank; (b) to other professional advisors to Borrower or Bank,
provided that the recipient has delivered to the Bank a written confidentiality
agreement substantially similar to this Paragraph 9.5; (c) to regulatory
officials having jurisdiction over Bank; (d) as required by applicable law or
legal process or in connection with any legal proceeding in which Bank 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 Bank's interests hereunder or a participation
interest in the Revolving Note and/or the Term Note, each in accordance with
Paragraph 9.4 hereof, provided that the recipient has delivered to Bank a
written confidentiality agreement substantially similar to this Paragraph 9.5.
Bank 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 Bank, or by an
affiliate of Bank, 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
----------
-33-
the public, (ii) information published in any public medium from a source other
than, directly or indirectly, Bank, and (iii) information disclosed by Borrower
to any person not associated with Borrower without a written confidentiality
agreement substantially similar to this Paragraph 9.5. 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 Bank or
the limited disclosures thereof permitted by this Paragraph 9.5 shall affect the
status of any such confidential information as a trade secret of Borrower and
its Subsidiaries. Bank, and each other person who agrees to be bound by this
Paragraph 9.5, acknowledges that any breach of the agreements contained in this
Paragraph 9.5 would result in losses that could not be reasonably or adequately
compensated by money damages. Accordingly, if Bank or any such other person
breaches its obligations hereunder, Bank 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 Bank or other Person to abide by the
terms of this Paragraph 9.5.
9.6 Waiver of Jury Trial. The Borrower waives any right it may have
--------------------
to trial by jury in any action or proceeding to enforce or defend any rights or
remedies arising under this Agreement and the Revolving Note and the Term Note.
9.7 Entire Agreement. This instrument and the exhibits hereto
----------------
embody the entire agreement with respect to the subject matter hereof between
the Borrower and the Bank.
9.8 Counterparts. This Agreement may be executed in as many
------------
counterparts as may be deemed necessary or convenient, and by the different
parties hereto on separate counterparts each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute but one and
the same instrument.
9.9 Governing Law. This Agreement and the Revolving Note and the
-------------
Term Note shall be deemed to be contracts under, and for all purposes shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of California.
9.10 Notice of Modification of Borrowing Agreements. The Borrower
----------------------------------------------
shall give prior notice to the Bank of any proposed modification in the terms of
any of the Borrowing Agreements and hereby agrees, should the Bank so request,
to make identical modifications in the terms of this Agreement.
-34-
9.11 No Priority. Nothing in this Agreement is intended, or shall be
-----------
interpreted, to create any priority of any of the banks listed on Schedule I
over any other of such banks with respect to their rights under the Borrowing
Agreements.
9.12 Headings. All headings in this Agreement are for convenience of
--------
reference only and shall not be construed to limit or interpret the provisions
they introduce.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the date first above written.
Bank: Borrower:
[NAME OF BANK] THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION
By By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
_________________________________ ______________________________
Its ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
________________________________ Senior Vice President and Treasurer
-35-
SCHEDULE OF CREDIT AGREEMENTS OMITTED
The following are the banks that are each signatories to separate but
substantially identical credit agreements that materially differ only with
respect to (i) the bank involved and (ii) the amount of the bank's commitment.
Bank of America NT&SA
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------
Its Managing Director
-----------------------
Bank of New York
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Its Vice President
-------------------------
The Chase Manhattan Bank
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Its Managing Director
-------------------------
Citicorp USA, Inc.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Its Attorney-in-fact
-------------------------
The First National Bank of Chicago
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Its Assistant Vice President
-------------------------
-36-
First Tennessee Bank National Association
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Its Vice President
-------------------------
Norwest Bank Minnesota, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Its Vice President
-------------------------
PNC Bank
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Its Senior Vice President
-------------------------
NationsBank, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------
Its Senior Vice President
-------------------------
Union Bank of Switzerland
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Its Managing Director
-------------------------
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Its Assistant Treasurer
-------------------------
-37-
SCHEDULE I
TO CREDIT AGREEMENT (364-DAY COMMITMENT) DATED AS OF JUNE 26, 1998 BETWEEN
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION AND THE BANKS LISTED BELOW
(Dollars in Millions)
Amount
------
Bank of America NT&SA $ 25
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Managing Director
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank of New York 25
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Chase Manhattan Bank 17.5
Broker Dealer Division
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Managing Director
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Citicorp USA, Inc. 25
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Managing Director
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The First National Bank of Chicago 17.5
Attn: ▇▇▇▇▇▇ de Diego, Senior Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
First Tennessee Bank National Association 10
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Norwest Bank Minnesota, N.A. 10
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
6th and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
PNC Bank 25
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
NationsBank, N.A. 10
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Senior Vice President
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-▇▇-
▇▇▇▇▇ ▇▇▇▇ of Switzerland 10
New York Branch
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Managing Director
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇ ▇-▇
REVOLVING NOTE
Date:
$ ____________________
For value received, the undersigned The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Corporation
("Schwab") hereby promises to pay to the order of ________________ (the "Bank")
at ______________, the principal amount of each Advance made by the Bank to
Schwab under the terms of a Credit Agreement (364-Day Commitment) between Schwab
and the Bank, dated as of June 26, 1998, as amended from time to time (the
"Credit Agreement"), as shown in the schedule attached hereto and any
continuation thereof, on the last day of the Interest Period (as defined in the
Credit Agreement) for such Advance. The undersigned also promises to pay
interest on the unpaid principal amount of each Advance from the date of such
Advance until such principal amount is paid, at the rates per annum, and payable
at such times, as are specified in the Credit Agreement. This Note shall be
subject to the Credit Agreement, and all principal and interest payable
hereunder shall 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.
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 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 or employees thereunto duly authorized and directed by
appropriate corporate authority.
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Corporation
By:
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President and Treasurer
-40-
EXHIBIT A-2
TERM NOTE
Date:
$____________________
For value received, the undersigned The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Corporation
("Schwab") hereby promises to pay to the order of ___________________ (the
"Bank") at ____________________________, the principal amount of each Term Loan
made by the Bank to Schwab under the terms of a Credit Agreement (364-Day
Commitment) between Schwab and the Bank, dated as of June 26, 1998, as amended
from time to time (the "Credit Agreement"), as shown in the schedule attached
hereto and any continuation thereof, on the Term Loan Maturity Date (as defined
in the Credit Agreement) 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, at the rates per annum, and
payable at such times, as are specified in the Credit Agreement. This Note
shall be subject to the Credit Agreement, and all principal and interest payable
hereunder shall 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.
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 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 or employees thereunto duly authorized and directed by
appropriate corporate authority.
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Corporation
By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President and Treasurer
-41-
EXHIBIT B
CONFIRMING BANK AGREEMENT
This Agreement is entered into as of June 26, 1998 between The ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Corporation (the "Borrower") and Citibank, N.A. (the "Confirming Bank").
WHEREAS, under the terms of separate substantially similar Credit
Agreements (364-Day Commitment) (the "Credit Agreements") between the Borrower
and each of the banks (the "Banks") set forth on Schedule I hereto, the Banks
have severally agreed to lend certain amounts to the Borrower on a revolving
credit loan basis through June 25, 1999 and maturing no later than September 23,
1999 and to make Term Loans to the Borrower on or before June 25, 1999 and
maturing no later than June 24, 2000 (as such dates may be extended from time to
time pursuant to Paragraph 2.12 of each of the Credit Agreements);
WHEREAS, the Borrower desires the Confirming Bank to calculate the
basis for the rates of interest to be borne by certain of the loans which may be
made by the Banks to the Borrower under the Credit Agreements:
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. Terms defined in the Credit Agreements shall bear the same
meanings herein unless the context otherwise requires.
2. Upon the terms and subject to the conditions hereinafter
mentioned, the Confirming Bank shall determine the CD Rate (including the
Assessment Rate and the CD Rate Reserve Percentage), the Eurodollar Rate
(including the Eurodollar Rate Reserve Percentage) or the Reference Rate which
is to serve as the basis for the interest rate of certain loans made under any
of the Credit Agreements.
3. Simultaneously with the giving of a Borrowing Advice, to any of
the Banks, the Borrower shall give to the Confirming Bank notice of such
Borrowing Advice (such notice being hereinafter referred to as a "Rate Request")
which shall specify the Bank to which such Borrowing Advice was given and the
principal amount, the Interest Period, and the basis for interest calculation
referred to therein.
4. (a) Upon receipt by the Confirming Bank of a Rate Request
relating to an Interest Period for which the interest calculation is to be based
on the Eurodollar Rate, the Confirming Bank, as soon as practicable, shall (i)
calculate the Eurodollar Rate Reserve Percentage for such Interest Period, which
shall be the percentage (expressed as a decimal) 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 the reserve
requirements to be maintained by the Bank under Regulation D (or any successor
regulation thereof) as amended to the date hereof (including such reserve
requirements as become applicable to the Bank
-42-
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), (ii) (aa) if there appear on the Reuters Screen LIBO
Page as at 11:00 A.M. (London time) two Eurodollar Banking Days prior to the
commencement of the relevant Interest Period at least two rates at which
deposits of U.S. dollars for the selected Interest Period are offered, identify
such offered rates and calculate the Eurodollar Rate to be the arithmetic mean
(adjusted upward, if necessary, to the nearest 1/16 of 1%) of such offered rates
or (bb) if fewer than two offered rates appear, obtain from each of the
Eurodollar Rate Reference Banks information with respect to the average rate per
annum (adjusted upward, if necessary, to the nearest 1/16 of 1%) at which
deposits of U.S. dollars for the selected Interest Period and in the amount
specified in the Rate Request are offered in immediately available funds to such
Eurodollar Rate Reference Bank (without giving effect to reserve requirements
described in the Eurodollar Rate Reserve Percentage section of the Credit
Agreement) in the London interbank market as at 11:00 a.m. (London time) two
Banking Days prior to the commencement of the relevant Interest Period and shall
determine the Eurodollar Rate for the relevant Interest Period to be the average
of the rates so obtained, adjusted upward, if necessary, to the nearest 1/16 of
1%, and (iii) determine the Eurodollar Rate for the relevant Interest Period to
be (aa) the applicable rate obtained pursuant to paragraph 4(a)(ii)(aa) or (bb)
hereof, divided by a percentage (expressed as a decimal) equal to 1.00 minus the
Eurodollar Rate Reserve Percentage. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurodollar
Rate Reserve Percentage.
In the event that (x) fewer than two offered rates appear on the
Reuters Screen LIBO Page as described above and fewer than two Eurodollar Rate
Reference Banks shall have provided information with respect to such offered
rates to the Confirming Bank, or (y) the Confirming Bank shall have determined
(which determination shall be conclusive and binding upon the Borrower and the
Banks) that by reason of changes affecting the London interbank market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate for the
relevant Interest Period, the Confirming Bank shall notify the Borrower and the
Bank specified in the Rate Request of such fact as soon as possible (and provide
information concerning the basis for any such determination described in (y)
above).
(b) As soon as possible after the determination of the Eurodollar
Rate, the Confirming Bank shall forthwith notify the Borrower and the Bank
specified in the Rate Request of such determination by telephone, confirmed by
written or telegraphic communication. The Confirming Bank shall simultaneously
notify the Borrower and the Bank as to which of the Eurodollar Rate Reference
Banks supplied information used in determining the Eurodollar Rate and the
information supplied by each such bank.
5. (a) Upon receipt by the Confirming Bank of a Rate Request
relating to an Interest Period for which the interest calculation is to be based
on the CD Rate, the Confirming Bank, as soon as practicable, shall:
(i) estimate the Assessment Rate for such Interest Period,
which shall be the assessment rate per annum (adjusted upward, if necessary,
-43-
to the nearest 1/100 of 1%) on the first day of such Interest Period for
determining the then current annual assessment payable by the Bank specified in
the Rate Request to the Federal Deposit Insurance Corporation (or any successor
thereto) for such Corporation's (or such successor's) insuring U.S. dollar
deposits of the Bank specified in the Rate Request in the United States;
(ii) calculate the CD Rate Reserve Percentage for such Interest
Period, which shall be the percentage (expressed as a decimal) 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, supplemental,
marginal and emergency reserves) for a bank with deposits exceeding five billion
dollars that is a member of the Federal Reserve System, in respect of new non-
personal time deposits in U.S. dollars in the United States in the amount
specified in the Rate Request having a maturity comparable to such Interest
Period (such bank's reserve ratio on such time deposits in effect on June __,
1998 was 0%);
(iii) obtain (aa) from each of the CD Reference Banks information
with respect to the average rate per annum (adjusted upward, if necessary, to
the nearest 1/16 of 1%) at which bids are received by each such CD Reference
Bank for its certificates of deposit for the selected Interest Period and in
the amount specified in the Rate Request as at 11:00 a.m., New York City time
(or as soon as practicable thereafter), on the first day of the relevant
Interest Period from two or more New York City certificate of deposit dealers
of recognized standing selected by the Confirming Bank for the purchase at
face value of such certificates of deposit, and calculate the applicable rate
to be the arithmetic mean (adjusted upward, if necessary, to the nearest 1/16
of 1%) of the average rates per annum of the CD Reference Banks, or (bb) in
the event the Confirming Bank cannot, without undue effort, obtain rates from
such CD Reference Banks 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 the Interest Period; and
(iv) determine the CD Rate for the relevant Interest Period to be
the sum of (aa) the Assessment Rate for such Interest Period, plus (bb) the
applicable rate obtained pursuant to paragraph 5(a) (iii)(aa) or (bb) hereof
(adjusted upward, if necessary, to the nearest 1/16 of 1%) divided by a
percentage (expressed as a decimal) equal to 1.00 minus the CD Rate Reserve
Percentage. The CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate and the CD Rate Reserve
Percentage.
In the event that (x) fewer than two CD Reference Banks shall have
provided information with respect to such offered rates to the Confirming Bank,
or (y) the Confirming Bank shall have determined (which determination shall be
conclusive and binding upon the Borrower and the Banks) that by reason of
changes affecting the New York City certificate of deposit market, adequate and
reasonable means do not exist for ascertaining the CD Rate for the relevant
Interest Period, the
-44-
Confirming Bank shall notify the Borrower and the Bank specified in the Rate
Request of such fact as soon as possible (and provide information concerning the
basis for any such determination described in (y) above).
(b) As soon as possible after the determination of the CD Rate or any
adjustment of the CD Rate, the Confirming Bank shall forthwith notify the
Borrower and the Bank specified in the Rate Request of such determination by
telephone, confirmed by written or telegraphic communication. The Confirming
Bank shall simultaneously notify the Borrower and the Bank as to which of the CD
Reference Banks supplied information used in determining the CD Rate and the
information supplied by each such Bank.
6. (a) Upon receipt by the Confirming Bank of a Rate Request relating
to an Interest Period for which the interest calculation is to be based on the
Reference Rate, the Confirming Bank shall:
(i) determine, on a daily basis during such Interest Period, the
higher of (a) the highest per annum rate of interest (adjusted upward, if
necessary, to the nearest 1/16 of 1%) publicly announced by any Reference Rate
Reference Bank as its "prime rate," "prime commercial lending rate," "reference
rate," or "base rate," as the case may be, and (b) the highest per annum Federal
Funds Effective Rate available to any Reference Rate Reference Bank, plus 1/2 of
1%;
(ii) on the last day of each month falling within such Interest
Period, determine the Reference Rate for the applicable portion of each month
then ending, which shall be equal to the arithmetic mean of the daily rates of
interest with the rate on each day being equal to the rate determined under (i)
above.
(b) At 10:00 a.m. on the first day of the month following each month
for which the Reference Rate has been determined, the Confirming Bank shall
notify the Borrower and the Bank specified in the Rate Request of such
determination by telephone, confirmed by written or telegraphic communication.
The Confirming Bank shall immediately notify the Borrower and the Bank as to
which of the Reference Rate Reference Banks supplied information used in
determining the Reference Rate and the information supplied by each such bank.
7. The determination of the Eurodollar Rate, the CD Rate or the
Reference Rate by the Confirming Bank shall be final and binding in the absence
of manifest error.
8. The Confirming Bank accepts its obligations herein set forth,
upon the terms and conditions hereof, including the following, to all of which
the Borrower agrees:
(a) The Confirming Bank shall be entitled to the compensation to be
agreed upon with the Borrower for all services rendered by the Confirming Bank,
and the Borrower agrees promptly to pay such compensation and to reimburse the
Confirming Bank for the reasonable out-of-pocket expenses (including reasonable
counsel fees) incurred by it in connection with the services
-45-
rendered by it hereunder. The Borrower also agrees to indemnify the Confirming
Bank for, and to hold it harmless against, any loss, liability or expense
(including the costs and expenses of defending against any claim of liability)
incurred without gross negligence or willful misconduct, arising out of or in
connection with its acting as Confirming Bank hereunder.
(b) In acting under this Agreement, the Confirming Bank does not
assume any obligation or relationship of agency or trust for or with any of the
Banks.
(c) The Confirming Bank shall be protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or
anything suffered by it in reliance upon any notice (including any Rate
Request), direction, certificate, affidavit, statement or other paper or
document reasonably believed by such Confirming Bank to be genuine and to have
been passed or signed by the proper parties. Under all circumstances, the
Confirming Bank's maximum liability for any error or omission in the performance
of its rate determination and notification obligations under this Agreement
shall be the difference between (1) any erroneous rate it determined and/or
provided notification of in response to a Rate Request from the Borrower, and
(2) the corresponding actual rate it should have determined and/or provided
notification of pursuant to the provisions of this Agreement.
(d) The Confirming Bank, its officers, directors and employees may
engage or be interested in any financial or other transaction with the Borrower
(including the lending of moneys to the Borrower under one of the Borrowing
Agreements), and may act on, or as depositary, trustee or agent for, any
committee or body of holders of notes or other obligations of the Borrower, as
freely as if it were not the Confirming Bank.
(e) The Confirming Bank shall be obligated to perform such duties and
only such duties as are herein specifically set forth, and no implied duties or
obligations shall be read into this Agreement against the Confirming Bank.
(f) The Confirming Bank may consult with counsel satisfactory to it
and the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, omitted to be taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.
(g) Any written order, certificate, notice (including any Rate
Request), request, direction, or other communication, from the Borrower made or
given under any provision of this Agreement shall be sufficient if signed by a
person authorized to execute and deliver a Borrowing Advice.
9. (a) The Confirming Bank may at any time resign as such Confirming
Bank by giving written notice to the Borrower and the Banks of such intention
on its part, specifying the date on which its desired resignation shall become
effective; provided, however, that no such resignation shall become effective
until a successor Confirming Bank is selected by the Borrower. The Confirming
Bank may be
-46-
removed at any time by the filing with it of an instrument in writing signed on
behalf of the Borrower and specifying such removal and the date when it is
intended to become effective. Such resignation or removal shall take effect
upon the date of the appointment by the Borrower, as hereinafter provided, of a
successor Confirming Bank (which shall be acceptable to the Banks) and the
acceptance of such appointment by such successor Confirming Bank. Upon its
resignation or removal, the Confirming Bank shall be entitled to the payment by
the Borrower of its compensation for the services rendered hereunder and to the
reimbursement of all out-of-pocket expenses, including reasonable fees of
counsel, incurred in connection with the services rendered hereunder by the
Confirming Bank.
(b) In case at any time the Confirming Bank shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or shall file a voluntary petition in bankruptcy or make an
assignment for the benefit of its creditors or consent to the appointment of a
conservator, liquidator or receiver of all or any substantial part of its
property, or shall admit in writing its inability to pay or meet its debts as
they mature or shall suspend payment thereof, or if an order of any court shall
be entered approving any petition filed by or against the Confirming Bank under
the provisions of any applicable bankruptcy or insolvency law, or if a
liquidator or receiver of it or of all or any substantial part of its property
shall be appointed, or if any public officer shall take charge or control of it
or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, a successor Confirming Bank (which shall be acceptable to the
Banks) may be appointed by the Borrower by an instrument in writing, filed with
the successor Confirming Bank. Upon the appointment as aforesaid of a successor
Confirming Bank and acceptance by it of such appointment, the Confirming Bank so
superseded shall cease, if not previously disqualified by operation of law, to
be such Confirming Bank hereunder.
(c) Any successor Confirming Bank appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Borrower (which shall
deliver a copy of same to the Banks) an instrument accepting such appointment
hereunder, and thereupon such successor Confirming Bank, without any further
act, deed or conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such predecessor with like
effect as if originally named as such Confirming Bank hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid, shall
thereupon become obliged to transfer and deliver, and such successor Confirming
Bank shall be entitled to receive, copies of any relevant information maintained
by such predecessor Confirming Bank.
(d) Any corporation or bank into which the Confirming Bank may be
merged or converted, or any corporation or bank with which the Confirming Bank
may be consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Confirming Bank shall be a party, or
any corporation or bank to which the Confirming Bank shall sell or otherwise
transfer all or substantially all the assets and business of such Confirming
Bank, shall, to the extent permitted by applicable law and provided that it
shall be qualified as aforesaid, be the successor Confirming Bank under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto. Notice
-47-
of any such merger, conversion, consolidation or sale shall forthwith be given
to the Borrower and to each of the Banks.
10. The Borrower undertakes that, so long as any Revolving Note or
Term Note is outstanding under any of the Credit Agreements, there shall at all
times be two Eurodollar Rate Reference Banks, two CD Reference Banks, and two
Reference Rate Reference Banks. The initial Eurodollar Rate Reference Banks, CD
Reference Banks and Reference Rate Reference Banks shall be those stated in the
Credit Agreements.
If any Reference Bank (i.e., any Eurodollar Rate Reference Bank, any
CD Reference Bank or any Reference Rate Reference Bank) or office thereof is
later unable or unwilling to act as such, the Borrower will appoint another
leading bank or office thereof (independent of the Borrower and acceptable to
the Banks) engaged in business in the appropriate market for determination of
applicable rates to replace such Reference Bank in such capacity. The Borrower
shall notify the Confirming Bank and each of the Banks forthwith upon any change
in the identity of any of the Reference Banks. Pending receipt of any such
notification the Confirming Bank shall be entitled to assume that the Reference
Banks are those named in the Credit Agreement as modified by changes of which
notification has already been received by the Confirming Bank.
11. Except where telephonic instructions or notices are authorized
herein to be given, all notices, demands, instructions and other communications
required or permitted to be given or made upon any party hereto shall be in
writing and shall be personally delivered or sent by registered or certified
mail, postage prepaid, return receipt request, or by prepaid Telex, TWX or
telegram (with messenger delivery specified in the case of a telegram), or by
telecopier, and shall be deemed to be given for purposes of this Agreement on
the day that such writing is delivered to the intended recipient thereof in
accordance with the provisions of this paragraph. Unless otherwise specified in
a notice sent or delivered in accordance with the foregoing provisions of this
paragraph, notices, demands, instructions and other communications in writing
shall be given to or made upon the respective parties hereto at their respective
addresses (or to their respective Telex, TWX or telecopier numbers) indicated
below, and, in the case of telephonic instructions or notices, by calling the
telephone number or numbers indicated for such party below:
If to the Borrower: The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Confirming Bank: Citibank, N.A.
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Managing Director
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to any of the Banks: To the respective address, telephone number or telex
number set forth opposite the name of such Bank on
Schedule I hereto.
12. Schedule I hereto may be amended from time to time by the
Borrower by the Borrower's delivery to the Confirming Bank of a new Schedule I.
Each such new Schedule I delivered by the Borrower to the Confirming Bank shall
replace and supersede the then-existing Schedule I, and any such newly delivered
Schedule I shall be the Schedule I referred to in this Agreement. Each such
newly delivered Schedule I shall include all of the then-existing Credit
Agreements between the Borrower and any Bank having substantially similar terms
to the Credit Agreements listed on the original Schedule I hereto.
13. This Agreement shall be deemed to be a contract under, and for
all purposes shall be governed by and construed and interpreted in accordance
with, the laws of the State of California.
14. This Agreement may be executed in as many counterparts as may be
deemed necessary or convenient, and by the parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the date first above written.
CITIBANK, N.A. THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION
By: By:
____________________________ ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Its: Senior Vice President and Treasurer
___________________________
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SCHEDULE I
TO CONFIRMING BANK AGREEMENT DATED AS OF JUNE 26, 1998 BETWEEN
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION AND CITIBANK, N.A.
(Dollars in Millions)
Amount
------
Bank of America NT&SA $ 25
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Managing Director
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank of New York 25
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Chase Manhattan Bank 17.5
Broker Dealer Division
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Managing Director
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Citicorp USA, Inc. 25
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Managing Director
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The First National Bank of Chicago 17.5
Attn: ▇▇▇▇▇▇ de Diego, Senior Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
First Tennessee Bank National Association 10
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Norwest Bank Minnesota, N.A. 10
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
6th and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
PNC Bank 25
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
NationsBank, N.A. 10
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Senior Vice President
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-▇▇-
▇▇▇▇▇ ▇▇▇▇ of Switzerland 10
New York Branch
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Managing Director
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
-51-
EXHIBIT C
BORROWING ADVICE
1. This Borrowing Advice is executed and delivered by The ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Corporation ("Borrower") to [Bank] pursuant to that certain Credit
Agreement (364-Day Commitment) dated as of June 26, 1998, entered into by
Borrower and [Bank] (the "Credit Agreement"). 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 [Bank] make an Advance [or Term
Loan] for the account of Borrower (at _______________, Account No.
________________) pursuant to Paragraph 2.3 of the Credit Agreement as follows:
(a) Amount of Advance [or Term Loan]:_________________
(b) Date of Advance [or Term Loan]: _________________
(c) [If an Advance] Type of Advance (check one only):
________ Reference Rate with ____ - day Interest Period
________ CD Rate with _________- day Interest Period
________ Eurodollar Rate with ________- day Interest Period
(d) [If a Term Loan] Type of Term Loan (check one only):
________ Reference Rate with initial ____ - day Interest Period
________ CD Rate with initial _________- day Interest Period
________ Eurodollar Rate with initial ________- day Interest
Period
(e) [If a Term Loan] Maturity Date of Term Loan: _________________
3. Following this request for Advance [or Term Loan], the aggregate
outstanding amount of all Advances and Term Loans under the Revolving Note will
not exceed the Credit amount.
4. This Borrowing Advice is executed on ______________ by the
Borrower.
BORROWER:
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION
a Delaware Corporation
By
________________________________________
[Printed Name and Title]
-52-
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 26, 1998 ("Credit Agreement") entered into by The
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Corporation ("Borrower") and [Bank] ("Bank"). Terms defined in
the Credit Agreement and not otherwise defined herein are used herein as defined
in the Credit Agreement.
Pursuant to Paragraph 2.12 of the Credit Agreement, Borrower hereby
requests Bank to agree to the extension of Bank'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.
Bank's execution of a copy of this letter in the space provided below
and the transmission of such executed copy to Borrower shall constitute Lender's
acceptance of Borrower's request and Lender's agreement to the 364-day extension
sought herein. More specifically, upon the execution of a copy of this letter
by Bank and the transmission thereof to Borrower within 15 days after Bank's
receipt of this letter, (1) the Termination Date as defined in Paragraph 2.12 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 Paragraph 2.12 of the Credit Agreement shall correspondingly
be extended 364 days.
This Commitment and Termination Date Extension Request is executed by
Borrower on ____________________.
BORROWER:
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION
a Delaware Corporation
By
_____________________________________
[Printed Name and Title]
ACCEPTED AND AGREED:
[BANK]
By
__________________________________
[Printed Name and Title]
-53-
