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Exhibit
10.56
GUARANTY
AGREEMENT
This Guaranty
Agreement (this “ Guaranty ”) is made as of the
21th day of December, 2006, by Nationwide Financial Services, Inc.,
a Delaware corporation (“ Guarantor ”), in favor
of The Charles Schwab Corporation, a Delaware corporation (“
Buyer ”).
WHEREAS, Guarantor
is the sole stockholder of NFS Distributors, Inc., a Delaware
corporation (“ Seller ”), and concurrently
herewith Seller is entering into a stock purchase agreement, by and
between Seller and Buyer, dated as of even date herewith (as
modified, supplemented or amended from time to time, the “
Stock Purchase Agreement ”), a complete and correct
copy of which is attached hereto as Exhibit A ;
WHEREAS, Guarantor,
as the sole stockholder of Seller, will receive a substantial
benefit from the closing of the transactions contemplated by the
Stock Purchase Agreement; and
WHEREAS, unless the
context indicates otherwise, any capitalized term used and not
defined in this Guaranty has the meaning given to such term in the
Stock Purchase Agreement.
For good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and as a material inducement to Buyer to enter
into and to close the transactions contemplated by the Stock
Purchase Agreement, Guarantor hereby (i) absolutely,
unconditionally and irrevocably guarantees to Buyer the payment and
performance of the obligations of Seller set forth in
Section 5.05 of the Stock Purchase Agreement, the payment of
any Damages required to be paid by Seller under the provisions of
Sections 11.02, 11.03 and 11.04 of the Stock Purchase Agreement and
the payment of any amount required to be paid by Seller pursuant to
Sections 2.03 and 8.05 of the Stock Purchase Agreement
(collectively, the “ Guaranteed Obligations ”),
and (ii) agrees to the covenants in connection with Sections
5.05 and 8.07 of the Stock Purchase Agreement upon the following
terms and conditions:
1. Guaranty of
Payment and Performance . Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to Buyer the timely
payment and/or performance, as the case may be, of all of the
Guaranteed Obligations upon such terms and in such amounts as is
set forth in the Stock Purchase Agreement, in an amount not to
exceed the Purchase Price.
2. Liability of
Guarantor .
(a) Within 15
Business Days of receiving written notice from Buyer of a default
of any Guaranteed Obligation, Seller shall provide written notice
to Buyer (a “ Required Response ”) stating its
intention to (i) pay, defend or dispute such Guaranteed
Obligation, or (ii) refer such Guaranteed Obligation to the
Guarantor for payment and/or performance.
(b) If Seller shall
(i) elect to refer any Guaranteed Obligation to the Guarantor
for payment and/or performance, (ii) fail to provide a
Required Response within 15 Business Days, or (iii) default in
the payment and/or performance of any Guaranteed Obligation, or any
part thereof, following an election to pay, defend or dispute such
Guaranteed Obligation, (A) Buyer shall provide to Guarantor
written notice of the same in accordance with Section 6
hereof (the “ Required Notice ”) and
(B) Guarantor shall, on demand and without presentment,
protest
or any notice other the
Required Notice, pay and/or perform, as the case may be, the
Guaranteed Obligations described in the Required Notice, subject to
Section 2(c) of this Guaranty.
(c) Guarantor
waives all rights, demands or defenses to the payment or
performance of the obligations described in the Required Notice,
including without limitation any right to revoke this Guaranty as
to future events giving rise to the Guaranteed Obligations, except
as set forth in Sections 2(a) and 2(b) , any right to
require Buyer to proceed first or exhaust remedies against Seller
and any right to receive notice of or approve any modification to
the Guaranteed Obligations; provided, however, notwithstanding the
preceding, that Guarantor shall be entitled to assert any defenses
to payment or performance of the Guaranteed Obligations that Seller
may be entitled to assert with respect to its obligations provided
under (i) the Stock Purchase Agreement or (ii) applicable
law.
3. 338(h)(10)
Election . As set forth in Section 8.07 of the Stock
Purchase Agreement and in connection with the sale of the Company
Shares to Buyer, Guarantor agrees to join with Buyer in making the
election provided for in Section 338(h)(10) of the Code and
the regulations promulgated thereunder, and any similar state
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