Exhibit 10.3
REVOLVING NOTE AND CASH SUBORDINATION
AGREEMENT
THIS AGREEMENT is entered into this 30th day of
April 2009, between National Financial Services LLC (the
“Lender”) and Thomas Weisel Partners LLC, (the
“Organization”).
WHEREAS, the Lender is willing to make
Advances (each, an “Advance,” collectively,
the “Advances”) to the Organization from time to time
through the 30th day of April 2011, (“Scheduled Maturity
Date”), as reflected on the Revolving Note (Exhibit
A).
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants herein contained, the parties hereto
agree as follows:
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The Lender agrees that from time to time between
this 30 th
day of April 2009 and 30th day of
April 2010 (the “Credit Period”) it will lend to the
Organization sums which, in the aggregate principal amount
outstanding at any one time, shall not exceed $25,000,000.00 (the
“Credit”).
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During the Credit Period, the
Organization may utilize the Credit (as then in effect)
by borrowing, prepaying outstanding Advances, in whole or in part,
and reborrowing, all in accordance with the terms and provisions
hereof. Each Advance shall be in the aggregate amount of $
100,000.00 or integral multiples thereof. The Organization is
obligated to repay the aggregate unpaid principal amount of all
Advances on or before the Scheduled Maturity Date.
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The obligation of the Organization to repay the
aggregate unpaid principal amount of the Advances shall be
evidenced by a promissory note of the Organization (the
“Revolving Note”) in substantially the form attached
hereto as Exhibit A, with the blanks appropriately completed,
payable to the order of the Lender, for amounts not exceeding in
the aggregate the Credit and bearing interest at rates to be agreed
upon by the Organization and the Lender at the time of any
Advance. The Revolving Note shall be dated, and shall be
delivered to the Lender, on the date of the execution and delivery
of this agreement by the Organization. The Lender shall,
and is hereby authorized by the Organization 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 each Advance 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 Organization
hereunder or under the Revolving Note.
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Whenever the Organization desires to utilize the
Credit, it shall so notify the Lender by telephone specifying the
amount of the Advance and the date on which each such Advance is to
be made. Notice will also be given by telephone,
confirmed in writing, to the New York Stock Exchange, Inc. (the
“Exchange”). Such notice shall be substantially in the
form of Exhibit B attached hereto and shall specify (i) the date
of the proposed Advance (the “Borrowing Date”),
(ii) the aggregate amount of outstanding Advances and (iii) if the
Advance is to be used to repay, in whole or in part, outstanding
Advances, the amount and maturity of such Advance.
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The Organization’s obligation to pay the
principal amount hereof on the Scheduled Maturity Date or any
accelerated maturity date shall be suspended and the obligation
shall not mature for any period of time during which after giving
effect to such payment (together with (a) the payment of any other
obligation of the Organization payable at or prior to the payment
hereof and (b) the return of any Secured Demand Note and the
Collateral therefor held by the Organization and returnable at or
prior to the payment hereof).
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in the event that the Organization is not
operating pursuant to the alternative net capital requirement
provided for in paragraph (a)(1)(ii) of Rule 15c3-1 (the
“Rule”) under the Securities Exchange Act of 1934, as
amended (the “Act”), the aggregate indebtedness of the
Organization would exceed 1200 percent of its net capital as those
terms are defined in the Rule or any successor rule as in effect at
the time payment is to be made, or such other percent as may be
made applicable to the Organization at the time of such payment by
the Exchange or the Securities and Exchange Commission (the
“SEC”), or
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in the event that the Organization is operating
pursuant to such alternative net capital requirement, the net
capital of the Organization would be less than 5 percent (or such
other percent as may be made applicable to the Organization at the
time of such payment by the Exchange or the SEC) of aggregate debit
items computed in accordance with Exhibit A to Rule 15c3-3 under
the Act or any successor rule as in effect at such time,
or
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in the event that the Organization is registered
as a futures commission merchant under the Commodity Exchange Act
(the “CEA”), the net capital of the Organization (as
defined in the CEA or the regulations thereunder as in effect at
the time of such payment) would be less than 120 percent, or such
other percentum as may be made applicable to the Organization at
the time of such payment by the Commodity Futures Trading
Commission (the “CFTC”), of the Organization’s
risk-based capital requirement calculated in accordance with CFTC
regulations in effect at the time of such payment, or the
Organization’s net capital would be less than the minimum
capital requirement as defined by the DSRO, or
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the Organization’s net capital, as defined
in the Rule or any successor rule as in effect at the time of such
payment, would be less than 120 percent (or such other percent as
may be made applicable to the Organization at the time of such
payment by the Exchange or the SEC) of the minimum dollar amount
required by the Rule as in effect at such time (or such other
dollar amount as may be made applicable to the Organization at the
time of such payment by the Exchange or the SEC), or
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in the event that the Organization is registered
as a futures commission merchant under the CEA, its net capital, as
defined in the CEA or the regulations thereunder as in effect at
the time of such payment, would be less than 120 percent (or such
other percent as may be made applicable to the Organization at the
time of such payment by the CFTC) of the minimum dollar amount
required by the CEA or the regulations thereunder as in effect at
such time (or such other dollar amount as may be made applicable to
the Organization at the time of such payment by the CFTC),
or
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in the event that the Organization is subject to
the provisions of Paragraph (a)(6)(v) or (c)(2)(x)(C) of the Rule,
the net capital of the Organization would be less than the amount
required to satisfy the 1000 percent test (or such other percentum
test as may be made applicable to the Organization at the time of
such payment by the Exchange or the SEC) stated in such applicable
paragraph,
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(the net capital necessary to enable the
Organization to avoid such suspension of its obligation to pay the
principal amount hereof being hereinafter referred to as the
“Applicable Minimum Capital”) and during any such
suspension the Organization shall, as promptly as consistent with
the protection of its customers, reduce its business to a condition
whereby the principal amount hereof with accrued interest thereon
could be paid (together with (a) the payment of any other
obligation of the Organization payable at or prior to the payment
hereof and (b) the return of any Secured Demand Note and the
Collateral therefor held by the Organization and returnable at or
prior to the payment hereof) without the Organization’s net
capital being below the Applicable Minimum Capital, at which time
the Organization shall repay the principal amount hereof plus
accrued interest thereon on not less than five days’ prior
written notice to the Exchange. The aggregate principal
amount outstanding pursuant to this Agreement shall mature on the
first day at which under this paragraph the Organization has an
obligation to pay the principal amount hereof. If
pursuant to the terms hereof the Organization’s obligation to
pay the principal amount hereof is suspended and does not mature,
the Organization agrees (and the Lender recognizes) that if its
obligation to pay the principal amount hereof is ever suspended for
a period of six months or more, it will promptly take whatever
steps are necessary to effect a rapid and orderly complete
liquidation of its business. If payment is made of all
or any part of the principal hereof on the Scheduled Maturity Date
or any accelerated maturity date and if immediately after any such
payment the Organization’s net capital is less than the
Applicable Minimum Capital, the Lender agrees irrevocably (whether
or not such Lender had any knowledge or notice of such fact at the
time of any such payment) to repay to the Organization, its
successors or assigns, the sum so paid, to be held by the
Organization pursuant to the provisions hereof as if such payment
had never been made; provided, however, that any suit for the
recovery of any such payment must be commenced within two years of
the date of such payment.
3.
SUBORDINATION OF OBLIGATIONS
The Lender irrevocably agrees that the
obligations of the Organization under this Agreement with respect
to the payment of principal and interest are and shall be fully and
irrevocably subordinate in right of payment and subject to the
prior payment or provision for payment in full of all claims of all
other present and future creditors of the Organization whose claims
are not similarly subordinated (claims hereunder shall rank pari
passu with claims similarly subordinated) and to claims which are
now or hereafter expressly stated in the instruments creating such
claims to be senior in right of payment to the claims of the class
of this claim arising out of any matter occurring prior to the date
on which the Organization’s obligation to make such payment
matures consistent with the provisions hereof. In the
event of the appointment of a receiver or trustee of the
Organization or in the event of its insolvency, liquidation
pursuant to the Securities Investor Protection Act of 1970
(“SIPA”) or otherwise, its bankruptcy, assignment for
the benefit of creditors, reorganization whether or not pursuant to
bankruptcy laws, or any other marshalling of the assets and
liabilities of the Organization, the holder hereof shall not be
entitled to participate or share, ratably or otherwise, in the
distribution of the assets of the Organization until all claims of
all other present and future creditors of the Organization, whose
claims are senior hereto, have been fully satisfied, or adequate
provision has been made therefor.
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PERMISSIVE PREPAYMENT AUTHORIZATION WITHIN ONE
YEAR
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With the prior
written approval of the Exchange, the Organization may at its
option, pay all or any portion of the principal amount hereof to
the Lender prior to the Scheduled Maturity Date (such payment being
hereinafter referred to as “Prepayment”) at any time
prior to one year following the date of any Advance. No
Prepayment shall be made, however, if:
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after giving effect thereto (and to all other
payments of principal of outstanding subordination agreements of
the Organization, including the return of any Secured Demand Note
and the Collateral therefor
held by the Organization, the maturity or accelerated
maturity of which are scheduled to occur within six months after
the date such Prepayment is to occur pursuant to the provisions of
this paragraph, or on or prior to the Scheduled Maturity Date for
payment of the principal amount h
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