SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
Commission file number 0-16633
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
______________________________________________________________________
__
(Exact name of registrant as specified in its Partnership Agreement)
MISSOURI 43-1450818
______________________________________________________________________
__
(State or other jurisdiction of (IRS Employer Identification
No.)
incorporation or organization)
201 Progress Parkway
Maryland Heights, Missouri 63043
______________________________________________________________________
__
(Address and principal executive office) (Zip Code)
Registrant's telephone number, including area code (314) 851-
2000
Securities registered pursuant to Section 12(b) of the act:
Name of each
exchange
Title of each class on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
NONE
______________________________________________________________________
__
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be file by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days YES X NO ___
As of March 26, 1994 there were no voting securities held by non-
affiliates of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Part 1
None
ITEM 1. BUSINESS
The Jones Financial Companies, a Limited Partnership (the "Registrant"
and also referred to herein as the "Partnership") is organized under
the Revised Uniform Limited Partnership Act of the State of Missouri.
The terms "Registrant" and "Partnership" used throughout, refer to The
Jones Financial Companies, a Limited Partnership and any or all of its
consolidated subsidiaries. The Partnership is the successor to
Whitaker & Co., which was established in 1871 and dissolved on October
1, 1943, said date representing the organization date of Edward D.
Jones & Co., L.P. ("EDJ"), the Partnership's principal subsidiary.
EDJ was reorganized on August 28, 1987, which date represents the
organization date of The Jones Financial Companies, a Limited
Partnership.
The Partnership is engaged in business as a broker/dealer in listed
and unlisted securities, including governmental issues, acts as an
investment banker, and is a distributor of mutual fund shares. In
addition, the Partnership engages in sales of various insurance
products and renders investment advisory services. The Partnership is
heavily oriented towards serving individual retail customers.
The Partnership is a member firm of the New York, American and Midwest
exchanges, and is a registered broker/dealer with the National
Association of Securities Dealers, Inc.
As of February 24, 1995, the Partnership was comprised of 115 general
partners, 1,918 limited partners and 59 subordinated limited partners.
The Partnership employed 9,670 persons, including 2,252 part-time
employees. As of said date, the Partnership employed 3,309 full-time
investment representatives actively engaged in sales in 3,261 offices
in 50 states and Canada.
The Partnership owns 100 percent of the outstanding common stock of
EDJ Holding Company, Inc., a Missouri corporation and 100 percent of
the outstanding common stock of LHC, Inc., a Missouri corporation.
The Partnership also holds all of the partnership equity of Edward D.
Jones & Co., L.P., a Missouri limited partnership and EDJ Leasing Co.,
L.P. a Missouri limited partnership. EDJ Holding Company, Inc. and
LHC, Inc. are the general partners of Edward D. Jones & Co., L.P. and
EDJ Leasing Co., L.P., respectively. In addition, the Partnership
owns 100 percent of the outstanding common stock of Conestoga
Securities, Inc., a Missouri corporation and also owns, as a limited
partner, 49.5 percent of Passport Research Ltd., a Pennsylvania
limited partnership, which acts as an investment advisor to a money
market mutual fund. The Partnership owns 100% of the equity of Edward
D. Jones & Co., an Ontario limited partnership and the general partner
is Edward D. Jones & Co. Canada Holding Co. Inc., which is wholly
owned by the Partnership. The Partnership has an equity position in
several entities formed to act as general partners of various direct
participation programs sponsored by the Nooney Corporation as follows:
Nooney Capital Corp. (a Missouri corporation), 66-2/3% of outstanding
Class B non-voting stock; Nooney-Five Capital Corp. (a Missouri
Corporation), 100% of outstanding Class B non-voting stock; Nooney-Six
Capital Corp. (a Missouri corporation), 100% of outstanding Class B
non-voting stock; Nooney-Seven Capital Corp. (a Missouri corporation),
100% of outstanding Class B non-voting stock; Nooney Income
Investments, Inc. (a Missouri corporation), 100% of outstanding Class
B non-voting stock; Nooney Income Investments Two, Inc. (a Missouri
corporation), 100% of outstanding Class B non-voting stock; Nooney
Income Investment Three, Inc., (a Missouri corporation), 100% of
outstanding Class B non-voting stock. The Partnership holds all of
the partnership equity in a Missouri limited partnership, EDJ
Ventures, Ltd. Conestoga Securities, Inc. is the general partner of
EDJ Ventures, Ltd. The Partnership is the sole shareholder of Tempus
Corporation, a Missouri corporation, which was formed strictly to
facilitate the issuance of certain debt securities of the Partnership
in a private transaction.
The Partnership is a limited partner of EDJ Insurance Agency of New
Jersey, L.P., a New Jersey limited partnership; EDJ Insurance Agency
of Arkansas, an Arkansas limited partnership; EDJ Insurance Agency of
Montana, a Montana limited partnership; EDJ Insurance Agency of New
Mexico, a New Mexico limited partnership; EDJ Insurance Agency of
Utah, a Utah limited partnership; and is a general partner in EDJ
Insurance Agency of California, a California general partnership; each
of which engage in general insurance brokerage activities. The
Partnership owns all of the outstanding stock of EDJ Insurance Agency
of Ohio, Inc., which is also engaged in insurance brokerage
activities. Affiliates of the Partnership include EDJ Insurance
Agency of Nevada, EDJ Insurance Agency of Texas, EDJ Insurance Agency
of Alabama, EDJ Insurance Agency of Florida, EDJ Insurance Agency of
Wyoming, EDJ Insurance Agency of Arizona and EDJ Insurance Agency of
Massachusetts. The Partnership holds all of the Partnership equity of
Unison Investment Trusts, L.P., d/b/a Unison Investment Trusts, Ltd.,
a Missouri limited partnership, which sponsors unit investment trust
programs. The general partner of Unison Investment Trusts, L.P. is
Unison Capital Corp., Inc., a Missouri corporation wholly owned by the
Partnership. The Partnership owns 100% of the outstanding common
stock of Edward D. Jones Homeowners, Inc., a Missouri corporation
which, in turn, serves as the general partner of EDJ Residential
Mortgage Services, a Missouri limited partnership wholly owned by the
Partnership, which formerly provided mortgage brokerage and ancillary
services. The Partnership owns 100% of the outstanding common stock
of Cornerstone Mortgage Investment Group, Inc., a Delaware limited
purpose corporation which has issued and sold collateralized mortgage
obligation bonds, and Cornerstone Mortgage Investment Group II, Inc.,
a Delaware limited purpose corporation which has structured and sold
secured mortgage bonds. The Partnership owns 100% of the outstanding
stock of CIP Management, Inc., which is the managing general partner
of CIP Management, L.P. CIP Management, L.P. is the managing general
partner of Community Investment Partners, L.P. and Community
Investment Partners II, L.P., business development companies.
Other affiliates of the Partnership include Patronus, Inc. and EDJ
Investment Advisory Services. Neither has conducted an active
business.
The Partnership owns as a general partner, 1/3 of Commonwealth Pacific
Limited Partnership, a Washington limited partnership, which formerly
operated as a syndicator of various real estate limited partnership
programs, for which the Partnership had served as an underwriter and
distributor.
Revenues by Source. The following table sets forth, for the past
three years the sources of the Partnership's revenues by dollar
amounts, (all amounts in thousands):
1994 1993 1992
Commissions
Listed $ 63,903 $ 72,536 $ 59,256
Mutual Funds 202,698 269,818 187,411
O-T-C 18,985 20,786 14,424
Insurance 85,759 70,334 46,509
Other 580 596 274
Principal Transactions 163,050 92,471 131,366
Investment Banking 36,359 45,001 60,635
Interest & Dividends 52,143 38,084 30,520
Money-Market Fees 10,110 10,048 10,751
IRA Custodial Service Fees 5,614 4,387 3,310
Other Revenues 18,844 15,203 9,514
_________ _________ _________
Total Revenues $ 658,045 $ 639,564 $553,970
Because of the interdependence of the activities and departments of
the Partnership's investment business and the arbitrary assumptions
involved in allocating overhead, it is impractical to identify and
specify expenses applicable to each aspect of the Partnership's
operations. Furthermore, the net income of firms principally engaged
in the securities business, including the Partnership's, is effected
by interest savings as a result of customer and other credit balances
and interest earned on customer margin accounts.
Listed Brokerage Transactions. A large portion of the Partnership's
revenue is derived from customers' transactions in which the
Partnership acts as agent in the purchase and sale of listed corporate
securities. These securities include common and preferred stocks and
corporate debt securities traded on and off the securities exchanges.
Revenue from brokerage transactions is highly influenced by the volume
of business and securities prices.
Customers' transactions in securities are effected on either a cash or
a margin basis. In a margin account, the Partnership lends the
customer a portion of the purchase price up to the limits imposed by
the margin regulations of the Federal Reserve Board (Regulation T),
New York Stock Exchange (NYSE) margin requirements, or the
Partnership's internal policies, which may be more stringent than the
regulatory minimum requirements. Such loans are secured by the
securities held in customers' margin accounts. These loans provide a
source of income to the Partnership since it is able to lend to
customers at rates which are higher than the rates at which it is able
to borrow on a secured basis. The Partnership is permitted to use as
collateral for the borrowings, securities owned by margin customers
having an aggregate market value generally up to 140 percent of the
debit balance in margin accounts. The Partnership may also use the
interest-free funds provided by free credit balances in customers'
accounts to finance customers' margin account borrowings.
In permitting customers to purchase securities on margin, the
Partnership assumes the risk of a market decline which could reduce
the value of its collateral below a customer's indebtedness before the
collateral is sold. Under the NYSE rules, the Partnership is required
in the event of a decline in the market value of the securities in a
margin account to require the customer to deposit additional
securities or cash so that at all times the loan to the customer is no
greater than 75 percent of the value of the securities in the account
( or to sell a sufficient amount of securities in order to maintain
this percentage). The Partnership, however, imposes a more stringent
maintenance requirement.
Variations in revenues from listed brokerage commissions between
periods is largely a function of market conditions; however, some
portion of the overall increases in recent years is due to the growth
in the number of registered representatives over these periods.
Mutual Funds. The Partnership distributes mutual fund shares in
continuous offerings and new underwritings. As a dealer in mutual
fund shares, the Partnership receives a dealers' discount which
generally ranges from 1 percent to 5 3/4 percent of the purchase price
of the shares, depending on the terms of the dealer agreement and the
amount of the purchase. The Partnership also earns service fees which
are generally based on 15 to 25 basis points of its customers' assets
which are held by the mutual funds. The Partnership does not manage
any mutual fund, although it is a limited partner of Passport
Research, Ltd., an advisor to a money market mutual fund.
Over-the-Counter and Principal Transactions. Partnership activities
in unlisted (over-the-counter) transactions are essentially similar to
its activities as a broker in listed securities. In connection with
customers' orders to buy or sell securities on an agency basis, the
Partnership charges a commission. In dealing on a principal basis,
the Partnership charges its customers a net price approximately equal
to the current inter-dealer market price plus or minus a mark-up or
mark-down from such market price. The National Association of
Securities Dealers (NASD) Rules of Fair Practice require that such
mark-up (or mark-down) be fair and reasonable.
Insurance. The Partnership has executed several agency agreements
with various national insurance companies. Through its approximately
2,608 investment representatives who hold insurance sales licenses,
EDJ is able to offer term life insurance, health insurance, and fixed
and variable annuities to its customers. Revenues from the sale of
insurance products, primarily annuities, approximated 13% of total
revenues in 1994, and the overall Insurance area has experienced
growth in recent years largely as a result of the growth in the number
of representatives licensed to engage in insurance sales.
The Partnership makes a market in over-the-counter corporate
securities, municipal obligations, including general obligations and
revenue bonds, unit investment trusts and mortgage-backed securities.
The Partnership's market-making activities are conducted with other
dealers in the "wholesale" market and "retail" market wherein the
Partnership acts as a dealer buying from and selling to its customers.
In making markets in over-the-counter securities, the Partnership
exposes its capital to the risk of fluctuation in the market value of
its security positions. It is the Partnership's policy not to trade
for its own account.
As in the case of listed brokerage transactions, revenue from over-
the-counter and principal transactions is highly influenced by the
volume of business and securities prices, as well as by the varying
number of registered representatives employed by the Partnership over
the periods indicated.
Investment Banking. The Partnership's investment banking activities
are carried on through its Syndicate and Underwriting Departments.
The principal service which the Partnership renders as an investment
banker is the underwriting and distribution of securities either in a
primary distribution on behalf of the issuer of such securities or in
a secondary distribution on behalf of a holder of such securities.
The distributions of corporate and municipal securities are, in most
cases, underwritten by a group or syndicate of underwriters. Each
underwriter has a participation in the offering.
Unlike many larger firms against which the Partnership competes, the
Partnership does not presently engage in other investment banking
activities such as assisting in mergers and acquisitions, arranging
private placement of securities issues with institutions or providing
consulting and financial advisory services to corporations.
The Syndicate and Underwriting Departments are responsible for the
largest portion of the Partnership's investment banking business. In
the case of an underwritten offering managed by the Partnership, these
departments may form underwriting syndicates and work closely with the
branch office system for sales of the Partnership's own participation
and with other members of the syndicate in the pricing and negotiation
of other terms. In offerings managed by others in which the
Partnership participates as a syndicate member, these departments
serve as active coordinators between the managing underwriter and the
Partnership's branch office system.
The underwriting activity of the Partnership involves substantial
risks. An underwriter may incur losses if it is unable to resell the
securities it is committed to purchase or if it is forced to liquidate
all or part of its commitment at less than the agreed purchase price.
Furthermore, the commitment of capital to underwriting may adversely
affect the Partnership's capital position and, as such, its
participation in an underwriting may be limited by the requirement
that it must at all times be in compliance with the net capital rule.
The Securities Act of 1933 and other applicable laws and regulations
impose substantial potential liabilities on underwriters for material
misstatements or omissions in the prospectus used to describe the
offered securities. In addition, there exists a potential for
possible conflict of interest between an underwriter's desire to sell
its securities and its obligation to its customers not to recommend
unsuitable securities. In recent years there has been an increasing
incidence of litigation in these areas. These lawsuits are frequently
brought for the benefit of large classes of purchasers of underwritten
securities. Such lawsuits often name underwriters as defendants and
typically seek substantial amounts in damages.
Interest and Dividends. Interest and dividend income is earned on
securities held and margin account balances.
Money Market Fees, IRA Custodial Service Fees and Other Revenues.
Other revenue sources include money market management fees and IRA
custodial services fees, accommodation transfer fees, gains from sales
of certain assets, and other product and service fees. The
Partnership has an interest in the investment advisor to its money
market fund, Daily Passport Cash Trust. Revenue from this source has
increased over the periods due to growth in the fund, both in dollars
invested and number of accounts. In 1991 EDJ became the custodian for
its IRA accounts. Each account is charged an annual service fee for
services rendered to it by the Partnership.
The Partnership has registered an investment advisory program with the
SEC under the Investment Advisors Act of 1940. This service is
offered firmwide and involves income and estate tax planning and
analysis for clients. Revenues from this source are insignificant and
included under "Other Revenues."
Also included in the category "Other Revenues" are accommodation
transfer fees, gains from sales of certain assets, other non-recurring
gains and revenue from management fees charged by mutual funds.
Research Department. The Partnership maintains a Research Department
to provide specific investment recommendations and market information
for retail customers. The Department supplements its own research
with the services of various independent research services. The
Partnership competes with many other securities firms with
substantially larger research staffs in its research activities.
Customer Account Administration and Operations. Operations employees
are responsible for activities relating to customers' securities and
the processing of transactions with other broker/dealers. These
activities include receipt, identification, and delivery of funds and
securities, internal financial controls, accounting and personnel
functions, office services, storage of customer securities and the
handling of margin accounts. The Partnership processes substantially
all of its own transactions. It is important that the Partnership
maintains current and accurate books and records from both a profit
viewpoint as well as for regulatory compliance.
To expedite the processing of orders, the Partnership's branch office
system is linked to the St. Louis headquarters office through an
extensive communications network. Orders for all securities are
centralized and executed in St. Louis. The Partnership's processing
of paperwork following the execution of a security transaction is
automated, and operations are generally on a current basis.
There is considerable fluctuation during any one year and from year to
year in the volume of transactions the Partnership processes. The
Partnership records transactions and posts its books on a daily basis.
Operations' personnel monitor day-to-day operations to determine
compliance with applicable laws, rules and regulations. Failure to
keep current and accurate books and records can render the Partnership
liable to disciplinary action by governmental and self-regulatory
organizations.
The Partnership has a computerized branch office communication system
which is principally utilized for entry of security orders,
quotations, messages between offices and cash receipts functions.
The Partnership clears and settles virtually all of its listed
transactions through the National Securities Clearing Corporation
("NSCC"), New York, New York. NSCC effects clearing of securities on
the New York, American and Midwest Stock Exchanges.
In conjunction with clearing and settling transactions with NSCC the
Partnership holds customers' securities on deposit with Depository
Trust Company ("DTC") in lieu of maintaining physical custody of the
certificates.
The Partnership is substantially dependent upon the operational
capacity and ability of NSCC/DTC. Any serious delays in the
processing of securities transactions encountered by NSCC/DTC may
result in delays of delivery of cash or securities to the
Partnership's customers. These services are performed for the
Partnership under contracts which may be changed or terminated at will
by either party.
Automated Data Processing, Inc., ("ADP") provides automated data
processing services for customer account activity and records.
The Partnership does not employ its own floor broker for transactions
on exchanges. The Partnership has arrangements with other brokers to
execute the Partnership's transactions in return for a commission
based on the size and type of trade. If for any reason any of the
Partnership's clearing, settling or executing agents were to fail, the
Partnership and its customers would be subject to possible loss.
While the coverages provided by the Securities Investors Protection
Corporation (SIPC) and protection in excess of SIPC limits would be
available to customers of the Partnership, to the extent that the
Partnership would not be able to meet the obligations of the
customers, such customers might experience delays in obtaining the
protections afforded them by the SIPC and the Partnership's insurance
carrier.
The Partnership believes that its internal controls and safeguards
concerning the risks of securities thefts are adequate. Although the
possibility of securities thefts is a risk of the industry, the
Partnership has not had, to date, a significant problem with such
thefts. The Partnership maintains fidelity bonding insurance which,
in the opinion of management, provides adequate coverage.
Employees. Including its general partners, the Partnership has
approximately 9,670 full and part-time employees, including 3,309 who
are registered salespeople as of February 24, 1995. The Partnership's
salespersons are compensated on a commission basis and may, in
addition, be entitled to bonus compensation based on their respective
branch office profitability and the profitability of the Partnership.
The Partnership has no formal bonus plan for its non-registered
employees. The Partnership has, however, in the past paid bonuses to
its non-registered employees on an informal basis, but there can be no
assurance that such bonuses will be paid for any given period or will
be within any specific range of amounts.
Employees of the Partnership are bonded under a blanket policy as
required by NYSE rules. The annual aggregate amount of coverage is
$40,000,000 subject to a $2,000,000 deductible provision, per
occurrence.
The Partnership maintains a training program for prospective
salespeople which includes eight weeks of concentrated instruction and
on-the-job training in a branch office. The first phase of training
is spent reviewing Series 7 examination materials and preparing for
and taking the examination. The first week of the training after
passing the examination is spent in a comprehensive training program
in St. Louis. The next five weeks include on-the-job training in
branch locations reviewing products, office procedures and sales
techniques. The broker is then sent to a designated location to
establish the EDJ office, conduct market research and prepare for
opening the office. After the salesperson has opened a branch office,
one final week is spent in a central location to complete the initial
training program. Three and six months later, the investment
representative attends additional training classes in St. Louis, and
subsequently, EDJ offers periodic continuing training mechanisms to
its seasoned sales force. Although the Partnership pays the broker
during the transition period, the broker must fulfill special tasks
before being awarded full branch status. EDJ's basic brokerage payout
is similar to its competitors. A bonus may also be paid based on the
profitability of the branch and the profitability of the Partnership.
The Partnership considers its employee relations to be good and
believes that its compensation and employee benefits which include
medical, life, and disability insurance plans and profit sharing and
deferred compensation retirement plans, are competitive with those
offered by other firms principally engaged in the securities business.
Competition. The Partnership is subject to intensive competition in
all phases of its business from other securities firms, many of which
are substantially larger than the Partnership in terms of capital,
brokerage volume and underwriting activities. In addition, the
Partnership encounters competition from other financially oriented
organizations such as banks, insurance companies, and others offering
financial services and advice. In recent periods, many regulatory
requirements prohibiting non-securities firms from engaging in certain
aspects of brokerage firms' business have been eliminated and further
removal of such prohibitions is anticipated. With minor exceptions,
customers are free to transfer their business to competing
organizations at any time.
There is intense competition among securities firms for salespeople
with good sales production records. In recent periods, the
Partnership has experienced increasing efforts by competing firms to
hire away its registered representatives although the Partnership
believes that its rate of turnover of investment representatives is
not higher than that of other firms comparable to the Partnership.
Regulation. The securities industry in the United States is subject
to extensive regulation under both federal and state laws. The SEC is
the federal agency responsible for the administration of the federal
securities laws. The Partnership's principal subsidiary is registered
as a broker-dealer and investment advisor with the SEC. Much of the
regulation of broker-dealers has been delegated to self-regulatory
organizations, principally the NASD and national securities exchanges
such as the NYSE, which has been designated by the SEC as the
Partnership's primary regulator. These self-regulatory organizations
adopt rules (which are subject to approval by the SEC) that govern the
industry and conduct periodic examinations of the Partnership's
operations. Securities firms are also subject to regulation by state
securities administrators in those states in which they conduct
business. EDJ or an affiliate is registered as a broker-dealer in 50
states, Puerto Rico and Canada.
Broker-dealers are subject to regulations which cover all aspects of
the securities business, including sales methods, trade practices
among broker-dealers, use and safekeeping of customers' funds and
securities, capital structure of securities firms, record-keeping and
the conduct of directors, officers and employees. Additional
legislation, changes in rules promulgated by the SEC and self-
regulatory organizations, or changes in the interpretation or
enforcement of existing laws and rules, may directly affect the mode
of operation and profitability of broker-dealers. The SEC, self-
regulatory organizations and state securities commissions may conduct
administrative proceedings which can result in censure, fine,
suspension or expulsion of a broker-dealer, its officers or employees.
The principal purpose of regulation and discipline of broker-dealers
is the protection of customers and the securities markets, rather than
protection of the creditors and stockholders of broker-dealers.
Uniform Net Capital Rule. As a broker-dealer and a member firm of the
NYSE, the Partnership is subject to the Uniform Net Capital Rule
(Rule) promulgated by the SEC. The Rule is designed to measure the
general financial integrity and liquidity of a broker-dealer and the
minimum net capital deemed necessary to meet the broker-dealer's
continuing commitments to its customers. The Rule provides for two
methods of computing net capital and the Partnership has adopted what
is generally referred to as the alternative method. Minimum required
net capital under the alternative method is equal to 2% of the
customer debit balances, as defined. The Rule prohibits withdrawal of
equity capital whether by payment of dividends, repurchase of stock or
other means, if net capital would thereafter be less than 5% of
customer debit balances. Additionally, certain withdrawals require
the consent of the SEC to the extent they exceed defined levels even
though such withdrawals would not cause net capital to be less than 5%
of aggregate debit items. In computing net capital, various
adjustments are made to exclude assets which are not readily
convertible into cash and to provide a conservative statement of other
assets such as a company's inventories. Failure to maintain the
required net capital may subject a firm to suspension or expulsion by
the NYSE, the SEC and other regulatory bodies and may ultimately
require its liquidation. The Partnership has, at all times, been in
compliance with the net capital rules.
ITEM 2. PROPERTIES
The Partnership conducts its headquarters operations from 19 separate
buildings in St. Louis County, Missouri. The headquarters facilities
are comprised of 18 separate buildings containing approximately
761,700 usable square feet which it owns and one building which it
leases. In addition, the Partnership leases approximately 5,000
square feet of office space for its Canadian headquarters operations
in Mississauga, Ontario. The Partnership also maintains facilities in
3,356 branch locations which (as of December 31, 1994) are
predominantly rented under cancellable leases.
Furniture, fixtures, computer and communication equipment are rented
under various operating leases. Additionally, branch offices are
leased on a three to five year basis and are cancellable at the option
of the Partnership. The Partnership's lease commitments are
summarized in the Notes to the Consolidated Financial Statements
appearing elsewhere herein.
ITEM 3. LEGAL PROCEEDINGS
In recent years there has been an increasing incidence of litigation
involving the securities industry. Such suits often seek to benefit
large classes of industry customers; many name securities dealers as
defendants along with exchanges in which they hold membership and seek
large sums as damages under federal and state securities laws, anti-
trust laws, and common law.
Various legal actions, primarily relating to the distribution of
securities, are pending against the Partnership. Certain cases are
class actions (or purported class actions) claiming substantial
damages. These actions are in various stages and the results of such
actions cannot be predicted with certainty. In the opinion of
management, after consultation with legal counsel, the ultimate
resolution of these actions will not have a material adverse impact on
the Partnership's financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
There is no market for the Limited or Subordinated Limited Partnership
interests and their assignment is prohibited.
ITEM 6. SELECTED FINANCIAL DATA
The following information sets forth, for the past five years,
selected financial data. (All amounts in thousands, except per unit
information.)
Summary Income Statement Data:
1994 1993 1992 1991 1990
Revenues $658,045 $639,564 $553,970 $411,588 $316,503
Net income 53,857 66,211 62,282 40,875 22,553
Net income per
weighted average
$1,000 equivalent
limited partnership
unit outstanding $127.59 $194.62 $238.41 $185.92 $130.52
Weighted average
$1,000 equivalent
limited partnership
units outstanding 63,165 50,381 41,160 42,616 25,874
Net income per
weighted average
$1,000 equivalent
subordinated limited
partnership unit
outstanding $237.83 $350.32 $418.21 $322.38 $212.86
Weighted average
$1,000 equivalent
subordinated limited
partnership units
outstanding 21,789 16,936 12,941 10,624 10,190
Summary Balance Sheet Data:
1994 1993 1992 1991 1990
Total assets $953,359 $800,478 $653,253 $513,730 $422,257
======= ======= ======= ======= =======
Long-term debt $ 41,779 $ 33,317 $ 23,847 $ 24,769 $ 19,977
Other liabilities,
exclusive of
subordinated
liabilities 585,057 514,386 414,110 326,229 250,772
Subordinated liabilities136,000 73,000 78,000 48,000 50,400
Total partnership
capital 190,523 179,775 137,296 114,732 101,108
________ ________ ________ ________ ________
Total liabilities and
partnership capital $953,359 $800,478 $653,253 $513,730 $422,257
======== ======== ======== ======== ========
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following table summarizes the changes in major categories of
revenues and expenses for the last two years (Dollar amounts in
thousands.)
1994 vs. 1993 1993 vs. 1992
Increase - (Decrease)
Amount Percentage Amount Percentage
Revenues
Commissions $(62,445) (14)% $126,496 41%
Principal transactions 70,579 76 (38,895) (30)
Investment banking (8,642) (19) (15,634) (26)
Interest and dividends 14,059 37 7,564 25
Other 4,930 17 6,063 26
_________ ___ ________ ___
18,481 3 85,594 15
_________ ___ ________ ___
Expenses
Employee and partner
compensation and benefits (6,997) (2) 57,613 17
Occupancy and equipment 9,916 17 10,069 20
Communications and data
processing 13,724 40 4,898 17
Interest 9,616 50 3,632 23
Payroll and other taxes 3,108 17 1,767 11
Floor brokerage and
clearance fees (371) (6) 781 15
Other operating expenses 1,839 4 2,905 7
_________ ___ _________ ___
30,835 5 81,665 17
_________ ___ _________ ___
Net income $(12,354) (19)% $ 3,929 6%
RESULTS OF OPERATIONS (1994 VERSUS 1993)
Revenues increased 3% ($18.5 million) over 1993 to $658 million.
Expenses increased by 5% ($31 million) resulting in net income of $54
million, a decrease of 19% ($12 million) over 1993.
In 1994, the Partnership increased its salesforce by 23% to 3,378
investment representatives compared with 2,745 at the end of 1993.
The growth in the salesforce contributed to a 7% increase in dollars
invested by EDJ customers which grew from $17.8 billion in 1993 to
$19.1 billion in 1994. Productivity measured on an individual
investment representative basis, however, has decreased as EDJ has
increased its investment representatives. Many of the new investment
representatives are beginners in the industry who generally achieve
profitability after about 30 months. In addition, the product mix of
the firm has shifted away from mutual funds and into
Certificates of Deposit, Corporate, Government and Municipal bonds,
which has reduced the margin on customer dollars invested compared
with 1993. As the yield curve has flattened, customers were inclined
to purchase shorter term investments, which carry lower margins
compared with longer term investments and equities. These factors
combined caused an overall increase in revenues of 3% ($18.5 million)
over 1993 to $658 million.
Commission revenues decreased $62 million primarily from a $79 million
(35%) decrease in mutual fund commissions offset by a $10 million
increase in mutual fund service fees. Listed and over-the-counter
agency commissions decreased $8.5 million or 10% over 1993. Insurance
commissions increased 18%, with variable and fixed annuities
increasing by $12.8 million. With rising interest rates over the
year, customers increased their investments in short and intermediate
term fixed income securities.
Principal transaction revenues increased 76% ($71 million) with
government and municipal bond revenues increasing $46 million.
Revenues from collateralized mortgage obligations (CMOs) increased
123% ($15.5 million) and corporate bonds increased 38% ($6.3 million).
At the same time, O-T-C principal stock sales decreased by $1 million.
Investment banking revenues declined 19% ($8.6 million) from
substantial decreases in equity originations and syndicate equity
participations ($7.2 million). Syndicate CMOs decreased 89% ($5.5
million) with the decrease partially offset by certificate of deposit
revenue increasing 110% ($9.1 million).
Interest and dividend revenues increased 37% or $14 million.
Customers' margin loan balances increased 4% in 1994 ($17 million)
ending the year at $468 million. Customer margin loan revenue
increased 38% ($11.1 million) primarily due to the increase in
interest rates during the year. U.S. Government and agency interest
income increased 42% ($2.8 million) from $6.5 million as the
Partnership increased Investment Securities by approximately $60
million during the year.
Other revenues increased $5 million (17%) over 1993. Revenues from
non-bank custodian IRA accounts resulted in an increase of $1.2
million in 1994.
Overall expenses increased 5% ($31 million) as the Partnership
continued to incur significant costs related to the growth of its
salesforce, which has increased approximately 23% for each of the last
three years. The Partnership incurred approximately $28 million of
training, salary and other costs in order to support the growth in the
salesforce compared with $21 million in 1993.
The Partnership's compensation structure for its investment
representatives and non-sales personnel is designed to expand or
contract substantially as a result of changes in revenues, net income
and profit margins. As a result of decreased revenues and net income
in 1994, variable compensation, including bonuses and profit sharing
contributions, declined by $35 million or 44% from 1993 levels. This
was offset by increases in headquarter, branch and trainee
compensation which increased to support the 23% growth in the
salesforce. Overall, compensation decreased by $7 million.
Other operating expenses are less influenced by decreasing revenues
and net income. In total, these expenses increased by $38 million, or
21%, and were primarily related to the headquarters and increased
branch expenses necessary to support a rapidly growing salesforce.
RESULTS OF OPERATIONS (1993 VERSUS 1992)
Revenues increased 15% ($86 million) over 1992 to $640 million.
Expenses increased by 17% ($82 million) resulting in net income of $66
million, an increase of 6% ($4 million) over 1992. These results were
significantly influenced by the Partnership's activities in connection
with the expansion of its salesforce. The number of investment
representatives increased 24% in 1993 to 2,745. By comparison, 1992's
growth in investment representatives was 22%. The Partnership
incurred significant training, salary and other costs in support of
new investment representatives. The net impact of these direct
expenses amounted to nearly $21 million during 1993 ($14 million in
1992). Additionally, the Partnership made significant increases in
home office overhead to support the increased salesforce.
Commission revenues increased $126 million fueled by a $82 million
(44%) increase in mutual fund commissions and service fees. Listed
and over-the-counter agency commissions increased $18 million or 24%
over 1992. Insurance commissions increased 56%, with variable and
fixed annuity commissions increasing $26 million. The increasing
level of securities prices along with lower interest rates turned
individual investors to equity markets and equity based investments in
search of more attractive returns. The continued strength of the
securities markets led to solid increases in commission generated from
the sales of securities products.
Principal transaction revenues decreased 30% ($39 million). CMO
revenues decreased $11.3 million, government and municipal bond
revenues decreased by $9.7 million and $3.7 million, respectively.
Prior to 1993, municipal bond syndicate revenues were included in
principal transaction revenues. In 1993, these revenues, totalling
$10.3 million, were included in investment banking revenues. The
majority of the principal transaction revenue decreases largely
resulted from historically low interest rates and the resulting
popularity of equity based investments.
Investment banking revenues declined $15.6 million resulting from
decreases in certificate of deposit revenues ($8 million), CMO
revenues ($11 million), and equity and debt originations.
Interest and dividend revenues increased 25% or $7.6 million.
Customers' margin loan balances increased 36% in 1993 ($120 million)
ending the year at $451 million. The increase in customers' loan
balances was attributable to higher securities prices, continuation of
marketing efforts targeting individuals to view their securities as
access to a personal line of credit and lower interest rates. The
increase in loan balances more than offset the decline in short term
interest rates during the year resulting in increased interest
earnings.
Other revenues increased $6 million (26%) over 1992. Revenues from
non-bank custodian IRA accounts resulted in an increase of $1 million
in 1993.
Overall expenses increased 17% ($82 million). The Partnership's
compensation structure for its investment representatives is designed
to expand or contract substantially as a result of changes in
revenues, net income and profit margins. Similarly, non-sales
personnel compensation from bonuses and profit sharing contributions
expands and contracts in relation to net income. The Partnership's
non-compensation related expenses are less responsive to changes in
revenues and net income. Rather, these expenses are influenced by the
number of salespeople, growth of the salesforce, the number of
customer accounts and, to a lesser extent, the volume of transactions.
As a result of its expense structure, the Partnership's compensation
expense increased 17% . The Partnership's expenses other than
compensation increased 15%. Increased expense levels related to
supporting a larger number of investment representatives and branch
offices were primarily responsible for the increase in operating
expenses.
The Effects of Inflation
The Partnership's net assets are primarily monetary, consisting of
cash, securities inventories and receivables less liabilities.
Monetary net assets are primarily liquid in nature and would not be
significantly affected by inflation. Inflation and future
expectations of inflation influence securities prices, as well as
activity levels in the securities markets. As a result, profitability
and capital may be impacted by inflation and inflationary
expectations. Additionally, inflation's impact on the Partnership's
operating expenses may affect profitability to the extent that
additional costs are not recoverable through increased prices of
services offered by the Partnership.
Liquidity and Capital Adequacy
The Partnership's equity capital at December 31, 1994, was $190.5
million compared to $179.8 million at December 31, 1993. Overall,
equity capital increased 6%, primarily due to the retention of
earnings and issuance of partnership interests. The Partnership
issued additional limited partnership interests in August 1993 of
$24.8 million and additional subordinated limited partnership interest
of $4.4 and $5.2 million in 1993 and 1994, respectively.
At December 31, 1994, the Partnership had a $36.7 million balance of
cash and cash equivalents. Lines of credit are in place at ten banks
aggregating $615 million ($570 million were through uncommitted
facilities). Actual borrowing availability is primarily based on
securities owned and customers' margin securities.
In addition, the Partnership increased its subordinated liabilities by
approximately $63 million during the year, the net proceeds of which
were primarily invested in U.S. Government Obligations.
The Partnership believes that the liquidity provided by existing cash
balances and borrowing arrangements will be sufficient to meet the
Partnership capital and liquidity requirements.
As a result of its activities as a broker/dealer, EDJ, the
Partnership's principal subsidiary, is subject to the Net Capital
provisions of Rule 15c3-1 of the Securities Exchange Act of 1934 and
the capital rules of the New York Stock Exchange. Under the
alternative method permitted by the rules, EDJ must maintain minimum
Net Capital, as defined, equal to the greater of $250,000 or 2% of
aggregate debit items arising from customer transactions. The Net
Capital rule also provides the partnership capital may not be
withdrawn if resulting Net Capital would be less than 5% of aggregate
debit items. Additionally, certain withdrawals require the consent of
the SEC to the extent they exceed defined levels even though such
withdrawals would not cause Net Capital to be less than 5% of
aggregate debit items. At December 31, 1994, EDJ's Net Capital of
$153,163,000 was 31% of aggregate debit items and its net capital in
excess of the minimum required was $143,423,000. Net Capital and the
related capital percentage may fluctuate on a daily basis.
Cash Flows
Cash and cash equivalents increased $7,884,000 from December 31, 1993,
to December 31, 1994. Cash flows were primarily provided from net
income, a decrease in net receivables from customers, brokers, dealers
or clearing organizations and increases in short term bank loans,
issuance of subordinated debt and the issuance of long term debt.
Cash flows were primarily used to decrease accounts payable and
accrued expenses, increase securities owned, purchase equipment,
property and improvements, repay long-term debt, repay subordinated
liabilities and fund capital withdrawals and distributions.
Cash and cash equivalents decreased $8,932,000 from December 31, 1992,
to December 31, 1993. Cash flows were primarily provided from net
income, a decrease in securities owned, an increase in short and long
term bank loans and the issuance of partnership interests. Cash flows
were primarily used to increase net receivables from customers and
brokers, purchase equipment, property and improvements, and fund
withdrawals and distributions.
Cash and cash equivalents increased $5,308,000 from December 31, 1991,
to December 31, 1992. Cash flows were primarily provided from net
income, an increase in short term bank loans and the issuance of
subordinated debt. Cash flows were primarily used to increase net
receivables from customers, increase securities owned, purchase
equipment, property and improvements, and fund capital withdrawals and
distributions.
There were no material changes in the Partnership's overall financial
condition during the year ended December 31, 1994, compared with the
year ended December 31, 1993. The Partnership's consolidated
statement of financial condition is comprised primarily of cash and
assets readily convertible into cash. Securities inventories are
carried at market value and are readily marketable. The firm carried
higher trading inventory levels in 1994 as compared to 1993. Customer
margin accounts are collateralized by marketable securities. Other
customer receivables and receivables and payables with other
broker/dealers normally settle on a current basis. Liabilities,
including amounts payable to customers, checks and accounts payable
and accrued expenses are non-interest bearing sources of funds to the
Partnership. These liabilities, to the extent not utilized to finance
assets, are available to meet liquidity needs and provide funds for
short term investments, which favorably impacts profitability.
The Partnership's growth in recent years has been financed through
sales of limited partnership interest to its employees, retention of
earnings and private placements of long-term and subordinated debt.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements Included in this Item
Page
No.
Report of Independent Public Accountants 19
Consolidated Statements of Financial Condition as of
December 31, 1994 and 1993 20
Consolidated Statements of Income for the years ended
December 31, 1994, 1993 and 1992 22
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1993 and 1992 23
Consolidated Statements of Changes in Partnership Capital
for the years ended December 31, 1994, 1993 and 1992 24
Notes to Consolidated Financial Statements 25
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Jones Financial Companies, a Limited Partnership:
We have audited the accompanying consolidated statements of financial
condition of The Jones Financial Companies, a Limited Partnership (a
Missouri limited partnership) and subsidiaries as of December 31, 1994
and 1993, and the related consolidated statements of income, cash
flows and changes in partnership capital for each of the three years
in the period ended December 31, 1994. These financial statements are
the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of The Jones
Financial Companies, a Limited Partnership and subsidiaries as of
December 31, 1994 and 1993, and the results of their operations, their
cash flows and the changes in their partnership capital for each of
the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
February 21, 1995
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS
December 31, December 31,
(Amounts in thousands) 1994 1993
Cash and cash equivalents $ 36,682 $ 28,798
Receivable from:
Customers (Note 2) 497,961 464,760
Brokers or dealers and clearing
organizations (Note 3) 16,604 32,550
Securities owned, at market value (Note 4):
Inventory securities 91,308 60,371
Investment securities 137,066 73,575
Office equipment, property and improvements,
net (Note 5) 125,764 102,434
Other assets 47,974 37,990
__________ __________
$ 953,359 $ 800,478
The accompanying notes are an integral part of these statements.
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
LIABILITIES AND PARTNERSHIP CAPITAL
December 31, December 31,
(Amounts in thousands) 1994 1993
Bank loans (Note 6) $ 165,000 $ 139,261
Payable to:
Customers (Note 2) 293,324 242,584
Brokers or dealers and clearing
organizations (Note 3) 13,225 8,092
Securities sold but not yet purchased, at
market value (Note 4) 16,037 17,766
Accounts payable and accrued expenses 39,425 37,419
Accrued compensation and employee benefits 58,046 69,264
Long-term debt (Note 7) 41,779 33,317
____________ __________
626,836 547,703
Liabilities subordinated to claims
of general creditors (Note 8) 136,000 73,000
Partnership capital (Notes 9 and 10):
Limited partners 67,461 71,222
Subordinated limited partners 23,722 19,163
General partners 99,340 89,390
____________ __________
190,523 179,775
____________ __________
$ 953,359 $ 800,478
The accompanying notes are an integral part of these statements.
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF INCOME
Years Ended
(Amounts in thousands, December 31 December 31 December 31
except per unit information) 1994 1993 1992
Revenues:
Commissions $ 371,925 $ 434,370 $307,874
Principal transactions 163,050 92,471 131,366
Investment banking 36,359 45,001 60,635
Interest and dividends 52,143 38,084 30,520
Other 34,568 29,638 23,575
_________ _________ _________
658,045 639,564 553,970
__________ _________ _________
Expenses:
Employee and partner
compensation and benefits (Note 11) 382,920 389,917 332,304
Occupancy and equipment
(Notes 5 & 12) 69,465 59,549 49,480
Communications and data processing 47,891 34,167 29,269
Interest (Notes 6, 7 and 8) 28,744 19,128 15,496
Payroll and other taxes 21,288 18,180 16,413
Floor brokerage and clearance fees 5,770 6,141 5,360
Other operating expenses 48,110 46,271 43,366
_________ _________ _________
604,188 573,353 491,688
_________ _________ _________
Net income $ 53,857 $ 66,211 $ 62,282
======== ======== ========
Net income allocated to:
Limited partners $ 8,059 $ 9,805 $ 9,813
Subordinated limited partners 5,182 5,933 5,412
General partners 40,616 50,473 47,057
_________ _________ _________
$ 53,857 $ 66,211 $ 62,282
======== ======== ========
Net income per weighted average $1,000
equivalent partnership units outstanding:
Limited partners $ 127.59 $ 194.62 $ 238.41
======== ======== =========
Subordinated limited partners $ 237.83 $ 350.32 $ 418.21
======== ======== ========
Weighted average $1,000 equivalent
partnership units outstanding:
Limited partners 63,165 50,381 41,160
======== ======== ========
Subordinated limited partners 21,789 16,936 12,941
======== ======== ========
The accompanying notes are an integral part of these statements.
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended
December 31 December 31 December 31
(Amounts in thousands) 1994 1993 1992
CASH FLOWS (USED) PROVIDED BY
OPERATING ACTIVITIES:
Net income $ 53,857 $ 66,211 $ 62,282
Adjustments to reconcile net income
to net cash (used) provided by
operating activities:
Depreciation and amortization 19,236 16,800 14,728
Decrease (increase) in net receiv-
able from/payable to customers 17,539 (37,374) (90,526)
Decrease (increase) in net
receivable from/payable to
brokers or dealers and clearing
organizations 21,079 (24,493) 13,401
(Increase) decrease in securities
owned, net (96,157) 20,902 2,573
(Decrease) increase in accounts
payable and other accrued
expenses (9,212) 6,960 106
Increase in other assets (9,984) (7,828) (7,744)
Net cash (used) provided by
operating activities (3,642) 41,178 (5,180)
CASH FLOWS USED BY INVESTING
ACTIVITIES:
Purchase of office equipment,
property and improvements, net (42,566) (47,109) (28,872)
CASH FLOWS PROVIDED (USED) BY
FINANCING ACTIVITIES:
Increase in bank loans 25,739 16,261 50,000
Issuance of long-term debt 44,859 11,700 -
Repayment of long-term debt (36,397) (2,230) (922)
Issuance of subordinated
liabilities 92,000 - 30,000
Repayment of subordinated
liabilities (29,000) (5,000) -
Issuance of partnership interests 5,167 29,195 2,396
Redemption of partnership interests (2,343) (1,193) (1,326)
Withdrawals and distributions from
partnership capital (45,933) (51,734) (40,788)
Net cash provided (used) by
financing activities 54,092 (3,001) 39,360
Net increase (decrease) in cash
and cash equivalents 7,884 (8,932) 5,308
CASH AND CASH EQUIVALENTS,
beginning of year 28,798 37,730 32,422
end of year $ 36,682 $ 28,798 $ 37,730
The accompanying notes are an integral part of these statements.
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL
YEARS ENDED DECEMBER 31, 1994, 1993 and 1992
Subordinated
Limited Limited General
Partnership Partnership Partnership
Capital Capital Capital Total
Balance, December 31, 1991 $ 46,687 $ 11,788 $ 56,257 $114,732
Issuance of partnership
interests - 2,396 - 2,396
Redemption of partnership
interests (1,175) (151) - (1,326)
Net income 9,813 5,412 47,057 62,282
Withdrawals and distributions (7,997) (4,729) (28,062) (40,788)
_________ _________ _________ ________
Balance, December 31, 1992 $ 47,328 $ 14,716 $ 75,252 $137,296
Issuance of partnership
interests 24,763 4,432 - 29,195
Redemption of partnership
interests (1,193) - - (1,193)
Net income 9,805 5,933 50,473 66,211
Withdrawals and distributions (9,481) (5,918) (36,335) (51,734)
_________ _________ _________ _________
Balance, December 31, 1993 $ 71,222 $ 19,163 $ 89,390 $179,775
Issuance of partnership
interests - 5,167 - 5,167
Redemption of partnership
interests (1,905) (438) - (2,343)
Net income 8,059 5,182 40,616 53,857
Withdrawals and distributions (9,915) (5,352) (30,666) (45,933)
_________ _________ _________ _________
Balance, December 31, 1994 $ 67,461 $ 23,722 $ 99,340 $190,523
The accompanying notes are an integral part of these statements.
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
The Partnership's Business and Basis of Accounting. The accompanying
consolidated financial statements include the accounts of The Jones
Financial Companies, a Limited Partnership, and all wholly owned
subsidiaries (the "Partnership"). All material intercompany balances
and transactions have been eliminated.
The Partnership conducts business throughout the United States and in
Canada with its customers, various brokers and dealers, clearing
organizations, depositories and banks. The Partnership's principal
operating subsidiary is Edward D. Jones & Co., L.P. ("EDJ"), a
registered broker/dealer.
Cash and Cash Equivalents. The Partnership considers all short-term
investments with original maturities of three months or less, that are
not held for sale to customers, to be cash equivalents.
Securities Transactions. The Partnership's securities activities
involve execution, settlement and financing of various securities
transactions for customers. These transactions (and related revenue
and expense) are recorded on a settlement date basis, generally
representing the fifth business day following the transaction date,
which is not materially different than a trade date basis. The
Partnership may be exposed to risk of loss in the event customers,
other brokers and dealers, banks, depositories or clearing
organizations are unable to fulfill contractual obligations. For
transactions in which it extends credit to customers, the Partnership
seeks to control the risks associated with these activities by
requiring customers to maintain margin collateral in compliance with
various regulatory and internal guidelines.
Securities Owned. Securities owned are valued at current market
prices. Unrealized gains or losses are reflected in principal
transactions revenue.
Office Equipment, Property and Improvements. Office equipment is
depreciated using straight-line and accelerated methods over estimated
useful lives of five to ten years. Buildings are depreciated using
the straight-line method over estimated useful lives approximating
thirty years. Amortization of property improvements is computed based
on the remaining life of the property or economic useful life of the
improvement, whichever is less. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation or
amortization are removed from the accounts, and any resulting gain or
loss is reflected in income for the period. The cost of maintenance
and repairs is charged against income as incurred, whereas significant
renewals and betterments are capitalized.
Segregated Cash Equivalents and Securities Owned. Rule 15c3-3 of the
Securities and Exchange Commission requires deposits of cash or
securities to a special reserve bank account for the benefit of
customers if total customer related credits exceed total customer
related debits, as defined. No deposits of cash or securities were
required as of December 31, 1994 or 1993.
Income Taxes. Income taxes have not been provided for in the
consolidated financial statements since The Jones Financial Companies,
a Limited Partnership, is organized as a partnership, and each partner
is liable for its own tax payments.
Reclassifications. Certain 1993 and 1992 amounts have been
reclassified to conform to the 1994 financial statement presentation.
NOTE 2 - RECEIVABLE FROM AND PAYABLE TO CUSTOMERS
Accounts receivable from and payable to customers include margin
balances and amounts due on uncompleted transactions. Values of
securities owned by customers and held as collateral for these
receivables are not reflected in the financial statements.
Substantially all amounts payable to customers are subject to
withdrawal upon customer request.
NOTE 3 - RECEIVABLE FROM AND PAYABLE TO BROKERS OR DEALERS AND
CLEARING ORGANIZATIONS
The components of receivable from and payable to brokers or dealers
and clearing organizations are as follows:
(Amounts in thousands) 1994 1993
Securities failed to deliver $ 3,864 $ 7,030
Deposits paid for securities borrowed 8,604 22,048
Deposits with clearing organizations 2,448 2,446
Other 1,688 1,026
__________ __________
Total receivable from brokers or dealers
and clearing organizations $ 16,604 $ 32,550
========== ==========
Securities failed to receive $ 10,064 $ 6,580
Deposits received for securities loaned 2,735 1,239
Other 426 273
__________ __________
Total payable to brokers or dealers and
clearing organizations $ 13,225 $ 8,092
"Fails" represent the contract value of securities that have not been
received or delivered by settlement date.
NOTE 4 - SECURITIES OWNED
Securities owned are summarized as follows (at market value):
1994 1993
_____________________________________
Securities Securities
Sold but Sold but
Securities not yet Securities not yet
(Amounts in thousands) Owned Purchased Owned Purchased
Inventory Securities:
Certificates of deposit $ 3,113 $ 246 $ 3,691 $ 49
U.S. and Canadian government
and agency obligations 18,501 11,201 4,123 15,070
State and municipal
obligations 42,860 726 34,306 839
Corporate bonds and notes 16,342 3,145 10,045 818
Corporate stocks 10,492 719 8,206 990
_________ _________ _________ _________
$ 91,308 $ 16,037 $ 60,371 $ 17,766
======== ======== ======== ========
Investment Securities:
U.S. government and agency
obligations $137,066 $ 73,575
======== ========
The Partnership attempts to reduce its exposure to market price
fluctuations of its inventory securities through the sale of futures
contracts and U.S. government securities. The amount of the
securities purchased or sold will fluctuate on a daily basis due to
changes in interest rates and market conditions. Any gain or loss on
the hedging activities is recognized in principal transactions
revenue.
NOTE 5 - OFFICE EQUIPMENT, PROPERTY AND IMPROVEMENTS
Office equipment, property and improvements are summarized as follows:
(Amounts in thousands) 1994 1993
Land $ 13,705 $ 13,705
Buildings and improvements 76,142 62,035
Office equipment 78,902 70,213
Furniture and fixtures 51,557 36,383
__________ __________
Total office equipment, property and
improvements 220,306 182,336
Accumulated depreciation and amortization (94,542) (79,902)
__________ __________
Office equipment, property and
improvements, net $ 125,764 $ 102,434
========== ==========
NOTE 6 - BANK LOANS
The Partnership borrows from banks on a short-term basis primarily to
finance customer margin balances and inventory securities. As of
December 31, 1994, the Partnership had bank lines of credit
aggregating $615,000,000 of which $570,000,000 were through
uncommitted facilities. Actual borrowing availability is primarily
based on securities owned and customers' margin securities. Short-
term bank loans outstanding at December 31, 1994 and 1993, are
collateralized by securities owned by the Partnership and customers'
margin securities with a market value of $475,594,000 and
$363,740,000, respectively. Bank loans outstanding approximate their
fair value.
Interest is at a fluctuating rate (weighted average rate of 6.98% and
4.17% at December 31, 1994, and 1993, respectively) based on short-
term lending rates. The average of the aggregate short-term bank
loans outstanding was $159,600,000, $99,100,000 and $57,794,000 and
the average interest rate (computed on the basis of the average
aggregate loans outstanding) was 5.22%, 4.04% and 4.40% for the years
ended December 31, 1994, 1993 and 1992, respectively.
Cash paid for interest on bank loans, long-term debt, capital notes
and other liabilities was $22,550,000, $14,059,000 and $10,956,000 for
the years ended December 31, 1994, 1993 and 1992, respectively.
NOTE 7 - LONG-TERM DEBT
Long-term debt is comprised of the following:
(Amounts in thousands) 1994 1993
Note payable, 9%, retired during 1994. $ - $ 9,600
Note payable, 9.875%, retired during 1994. - 12,282
Note payable, 8.5%, retired during 1994. - 11,435
Note payable, secured by equipment, interest
at the prime rate, due in variable monthly
installments of $194,444 plus interest with
the final payment of $1,200,000 due on
May 1, 1997. 6,450 -
Note payable, secured by property, interest at
8.72% per annum, principal and interest due in
monthly installments of $289,700 with the final
installment due on June 5, 2003. 20,818 -
Note payable, secured by property, interest at
8.23% per annum, principal and interest due in
monthly installments of $149,659 due on
April 5, 2008. 14,511 -
__________ __________
$ 41,779 $ 33,317
Required annual principal payments, as of December 31, 1994, are as
follows:
Principal Payment
Year (Amounts in thousands)
1995 $ 4,687
1996 4,898
1997 4,577
1998 3,043
1999 3,315
Thereafter 21,259
_______
$ 41,779
======
The Partnership has land, buildings and equipment with a carrying
value of $51,457,000 at December 31, 1994, which are subject to
security agreements that collateralize various notes payable. The
Partnership has estimated the fair value of the long-term debt to be
approximately $38,199,000 and $36,493,000 as of December 31, 1994 and
1993, respectively.
NOTE 8 - LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
Liabilities subordinated to the claims of general creditors consist
of:
(Amounts in thousands)
1994 1993
Capital notes, 9.375%, retired during 1994. $ - $ 15,000
Capital notes, 10.6%, due in installments of
$7,000,000 on March 15, 1995 and 1996. 14,000 28,000
Capital notes, 8.96%, due in annual
installments of $6,000,000 commencing on
May 1, 1998, with a final installment on
May 1, 2002 30,000 30,000
Capital notes, 7.95%, due in annual
installments of $10,225,000 commencing on
April 15, 1998, with a final installment
of $10,200,000 due on April 15, 2006. 92,000 -
__________ __________
$ 136,000 $ 73,000
The capital note agreements contain restrictions that among other
things, require maintenance of certain financial ratios, restrict
encumbrance of assets and creation of indebtedness and limit the
withdrawal of partnership capital. As of December 31, 1994, the
Partnership was required, under the note agreements, to maintain
minimum partnership capital of $110,000,000 and Net Capital as
computed in accordance with the uniform Net Capital rule of 7.5% of
aggregate debit items (See Note 10).
The subordinated liabilities are subject to cash subordination
agreements approved by the New York Stock Exchange and, therefore, are
included in the Partnership's computation of Net Capital under the
Securities and Exchange Commission's uniform Net Capital rule. The
Partnership has estimated the fair value of the subordinated capital
notes to be approximately $130,520,000 and $76,726,000 as of December
31, 1994 and 1993, respectively.
NOTE 9 - PARTNERSHIP CAPITAL
The limited partnership capital, consisting of 62,375 and 64,280
$1,000 units at December 31, 1994 and 1993, respectively, is held by
current and former employees and general partners of the Partnership.
Each limited partner receives interest at seven and one-half percent
on the principal amount of capital contributed and a varying
percentage of the net income of the Partnership. Interest expense
includes $4,741,000, $3,781,000, and $3,090,000 for the years ended
December 31, 1994, 1993 and 1992, respectively, paid to limited
partners on capital contributed.
The subordinated limited partnership capital, consisting of 22,020 and
17,290 $1,000 units at December 31, 1994 and 1993, respectively, is
held by current and former general partners of the Partnership. Each
subordinated limited partner receives a varying percentage of the net
income of the Partnership. The subordinated limited partner capital
is subordinated to the limited partnership capital.
Included in partnership capital at December 31, 1994 and 1993, are
undistributed profits of $14,679,000 and $17,964,000, respectively,
that will be withdrawn by the partners.
NOTE 10 - NET CAPITAL REQUIREMENTS
As a result of its activities as a broker/dealer, EDJ, is subject to
the Net Capital provisions of Rule 15c3-1 of the Securities Exchange
Act of 1934 and the capital rules of the New York Stock Exchange.
Under the alternative method permitted by the rules, EDJ must maintain
minimum Net Capital, as defined, equal to the greater of $250,000 or
2% of aggregate debit items arising from customer transactions. The
Net Capital rule also provides that partnership capital may not be
withdrawn if resulting Net Capital would be less than 5% of aggregate
debit items. Additionally, certain withdrawals require the consent of
the SEC to the extent they exceed defined levels even though such
withdrawals would not cause Net Capital to be less than 5% of
aggregate debit items. At December 31, 1994, EDJ's Net Capital of
$153,163,000 was 31% of aggregate debit items and its Net Capital in
excess of the minimum required was $143,423,000. Net Capital as a
percentage of aggregate debits after anticipated capital withdrawals
was 30%. Net Capital and the related capital percentage may fluctuate
on a daily basis. EDJ's Net Capital excludes $15,130,000 of
undistributed profits that will be withdrawn by the partners.
NOTE 11 - EMPLOYEE BENEFIT PLAN
The Partnership maintains a profit sharing plan covering all eligible
employees. Contributions to the plan are at the discretion of the
Partnership. However, participants may contribute on a voluntary
basis. Approximately $13,835,000, $16,716,000, and $15,625,000 were
provided by the Partnership for its contributions to the plan for the
years ended December 31, 1994, 1993 and 1992, respectively. No post
retirement benefits are provided.
NOTE 12 - COMMITMENTS
Furniture, fixtures, computer and communication equipment are rented
under various operating leases. Additionally, branch offices are
leased on a three to five year basis and are cancellable at the option
of the Partnership. The Partnership's lease commitments are:
(Amounts in thousands)
1995 $ 13,155
1996 11,289
1997 11,586
1998 6,076
1999 2,122
Rent expense was $35,558,000, $28,385,000, and $24,837,000 for the
years ended December 31, 1994, 1993 and 1992, respectively.
On October 25, 1994, the Partnership entered into an Agreement and
Plan of Acquisition with Boone National Savings and Loan Association,
F.A. to acquire the Association for a purchase price of approximately
$8.6 million. The Partnership is in the process of obtaining
regulatory approval for this transaction.
NOTE 13 - CONTINGENCIES
Various legal actions, primarily relating to the distribution of
securities, are pending against the Partnership. Certain cases are
class actions (or purported class actions) claiming substantial
damages. These actions are in various stages and the results of such
actions cannot be predicted with certainty. In the opinion of
management, after consultation with legal counsel, the ultimate
resolution of these actions will not have a material adverse impact on
the Partnership's financial condition.
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Jones Financial Companies, a Limited Partnership, being organized
as a partnership, does not have individuals associated with it
designated as officers or directors. As of February 24, 1995, the
Partnership is comprised of 115 general partners, 1,918 limited
partners and 59 subordinated limited partners. Under the terms of the
Partnership Agreement, John W. Bachmann is designated Managing Partner
and in said capacity has primary responsibility for administering the
Partnership's business, determining its policies, controlling the
management and conduct of the Partnership's business and has the power
to appoint and dismiss general partners of the Partnership and to fix
the proportion of their respective interests in the Partnership.
Subject to the foregoing, the Partnership is managed by its 115
general partners.
The Management Committee of the Partnership is comprised of John W.
Bachmann, Douglas E. Hill, Charles R. Larimore, Richie L. Malone,
Steven Novik, Darryl L. Pope, Gary D. Reamey, Connie M. Silverstein,
Edward Soule, Robert Virgil, Jr., and James D. Weddle. The purpose of
the Management Committee is to provide counsel and advice to the
Managing Partner in discharging his functions. Furthermore, in the
event the position of Managing Partner is vacant, the Management
Committee shall succeed to all of the powers and duties of the
managing partner.
None of the general partners are appointed for any specific term nor
are there any special arrangements or understandings pursuant to their
appointment other than as contained in the Partnership Agreement.
No general partner is or has been individually, nor in association
with any prior business, the subject of any action under any
insolvency law or criminal proceeding or has ever been enjoined
temporarily or permanently from engaging in any business or business
practice.
A listing of the names, ages, dates of becoming a general partner and
area of responsibility for each general partner follows at February
24, 1995:
Became
General
Name Age Partner Area of Responsibility
Warren K. Akerson 52 1974 Sales
Allan J. Anderson 52 1992 Sales Management
John W. Bachmann 56 1970 Managing Partner
Thomas M. Bartow 45 1989 Sales Training
James D. Bashor 40 1990 Regional Sales Leader
Robert J. Beck 40 1983 Municipal Trading
Roger W. Bennett 39 1995 Regional Sales Leader
John D. Beuerlein 41 1979 Sales Management
John S. Borota 54 1978 Sales Hiring
William H. Broderick, III 42 1986 Syndicate
Morton L. Brown 48 1978 Managed Investments
Spencer B. Burke 46 1987 Investment Banking
Daniel A. Burkhardt 47 1979 Investment Banking
Jack L. Cahill 45 1980 Sales Management
Brett A. Campbell 36 1993 Marketing
Donald H. Carter 51 1994 Regional Sales Leader
John J. Caruso 48 1988 Information Systems
Guy R. Cascella 37 1992 Sales Management
Pamela K. Cavness 32 1995 Compliance
Craig E. Christell 38 1994 Regional Sales Leader
Richard A. Christensen, Jr.47 1978 Mutual Funds Processing
Robert J. Ciapciak 39 1988 Market Research
David W. Clapp 45 1978 Sales Management
Stephen P. Clement 45 1990 Video Communications
Cheryl J. Cook-Schneider 36 1995 Compliance
Loyola A. Cronin 37 1987 Branch Staff Training
Stanley A. Cunningham 51 1995 Regional Sales Leader
Harry J. Daily, Jr. 48 1985 Regional Sales Leader
Cynthia A. Doria 39 1995 Legal
Terry A. Doyle 45 1992 Regional Sales Leader
William T. Dwyer, Jr. 39 1994 Regional Sales Leader
Abe W. Dye 50 1984 Sales Management
Allen R. Eaker 48 1989 Regional Sales Leader
Norman L. Eaker 38 1984 Securities Processing
Kevin Eberle 44 1993 Regional Sales Leader
Michael J. Esser 46 1983 Advanced Sales Training
Kevin N. Flatt 46 1989 Fixed Income/Equity Trading
John A. Fowler 47 1979 Customer Tax Support
Steve Fraser 39 1993 Securities Processing
Colleen A. Geraty 33 1995 Advertising
Chris A. Gilkison 41 1994 Branch Locations
Barbara G. Gilman 56 1988 Trust Marketing
Steven L. Goldberg 36 1987 Central Services
Ronald Gorgen 45 1993 Field Services
Robert L. Gregory 52 1974 Sales Hiring
Kevin C. Haarberg 40 1995 Regional Sales Leader
Patricia F. Hannum 34 1988 Financial Services
Stephen P. Harrison 46 1990 Regional Sales Leader
James W. Harrod 59 1974 Sales Training
David L. Hayes 39 1994 Regional Sales Leader
Randy K. Haynes 39 1994 Operations
John M. Hess 47 1992 Regional Sales Leader
Mary Beth Heying 37 1994 Communications
Douglas E. Hill 50 1974 Product Management
Don R. Howard 43 1995 Regional Sales Leader
Stephen M. Hull 50 1994 Regional Sales Leader
Earl H. Hull, Jr. 49 1990 Regional Sales Leader
Glennon D. Hunn 52 1984 Information Systems
Gary R. Hunziker 54 1994 Regional Sales Leader
Paul C. Husted 41 1990 Regional Sales Leader
Thomas G. Iorio 34 1994 Regional Sales Leader
Mellany F. Isom 41 1984 Sales Hiring
Myles P. Kelly 41 1989 Accounting
Timothy J. Kirley 41 1994 Customer Segments
James A. Krekeler 30 1995 Investment Banking
Charles R. Larimore 54 1981 Branch Administration
Ronald E. Lemonds 58 1972 Equity Marketing
Mark Leverenz 39 1995 Securities Processing
Michele Liebman 38 1994 Information Systems
Richie L. Malone 46 1979 Information Systems
Richard G. McCarty 55 1990 Regional Sales Leader
James A. McKenzie 50 1977 Regional Sales Leader
Thomas Migneron 34 1993 Internal Audit
Richard G. Miller, Jr. 39 1991 Regional Sales Leader
Thomas W. Miltenberger 47 1985 Mutual Funds Marketing
Merry L. Mosbacher 36 1986 Investment Banking
Joseph M. Mott, III 37 1989 Insurance/Annuities Marketing
Matt B. Myre 38 1988 Regional Sales Leader
Rodger W. Naugle 53 1992 Regional Sales Leader
Steven Novik 45 1983 Accounting
Cynthia Paquette 34 1993 Information Systems
Robert K. Pearce 45 1989 Human Resources
Darryl L. Pope 55 1971 Operations
Gary D. Reamey 39 1984 Canada Division
James L. Regnier 37 1994 Sales Training
Ray L. Robbins, Jr. 50 1975 Research
Stephen T. Roberts 42 1981 Compliance
Wann V. Robinson 44 1992 Regional Sales Leader
Douglas Rosen 34 1993 Regional Sales Leader
Harry John Sauer, III 37 1988 Dividend Processing
Philip R. Schwab 46 1978 Syndicate
Robert D. Seibel 60 1974 Regional Sales Leader
Festus W. Shaughnessy, III 39 1988 Sales Training
Connie M. Silverstein 39 1988 Sales Hiring
Alan F. Skrainka 33 1989 Research
John S. Sloop 46 1990 Sales Management
Ronald H. Smith 55 1984 Regional Sales Leader
Lawrence R. Sobol 44 1977 General Counsel
Edward Soule 42 1986 Accounting
Lawrence E. Thomas 39 1983 Government Bond Trading
Terry R. Tucker 40 1988 Information Systems
Richard G. Unnerstall 39 1989 Information Systems
Robert Virgil, Jr. 60 1994 Headquarters Administration
JoAnn Von Bergen 45 1986 Cash Processing
Donald E. Walter 49 1983 Compliance Director
Bradley T. Wastler 42 1989 Sales Management
James D. Weddle 41 1984 Sales Management
Vicki Westall 35 1993 Product Review
Thomas J. Westphal 36 1989 Customer Statements
Heidi Whitfield 34 1993 Product Review
Robert D. Williams 33 1994 Regional Sales Leader
A. Thomas Woodward 48 1985 Sales Management
Price P. Woodward 32 1993 Regional Sales Leader
Alan T. Wright 48 1994 Investment Banking
Bradley A. Ytterberg 40 1994 Customer Segments
Except as indicated below, each of the General Partners has been a
general partner of the Partnership for more than the preceding five
years.
Allan J. Anderson, joined the Partnership in 1984 as a registered
representative and became a general partner in 1992.
Roger W. Bennett, joined the Partnership in 1982 as a registered
representative and became a general partner in 1995.
Brett A. Campbell, joined the Partnership in 1984 as a registered
representative and became a general partner in January 1993.
Donald H. Carter, joined the Partnership in 1982 as a registered
representative and became a general partner in January 1994.
Guy Cascella, joined the Partnership in 1983 as a registered
representative and became a general partner in 1992.
Pamela K. Cavness, joined the Partnership in 1987 in the Compliance
Department and became a general partner in 1995. Prior to this, she
worked as an investment representative for a NYSE registered
broker/dealer, earned a MBA in finance and currently serves as an
arbitrator for the National Association of Securities Dealers.
Craig E. Christell, joined the Partnership in 1982 as a registered
representative and became a general partner in January 1994.
Cheryl Cook-Schneider, joined the Partnership in 1987 in the
Compliance Department and became a general partner in January 1995.
Prior to this, she passed the Missouri Bar Exam and worked as an
attorney in private practice.
Stanley A. Cunningham, joined the Partnership in 1981 as a registered
representative and became a general partner in January 1995.
Cynthia A. Doria, joined the Partnership in 1984 as an attorney in the
Legal Department and became a general partner in January 1995. Prior
to this, she handled litigation defense for three years in a St. Louis
law firm.
Terry Doyle, joined the Partnership in 1981 as a registered
representative and became a general partner in 1992.
William T. Dwyer, joined the Partnership in 1982 as a registered
representative and became a general partner in January 1994.
Kevin Eberle, joined the Partnership in 1985 as a registered
representative and became a general partner in 1993.
Steve Fraser, joined the Partnership in 1985 in the Operations
Department and became a general partner in January, 1993. Prior to
this, he was employed by Automated Data Processing Inc.
Colleen A. Geraty, joined the Partnership in 1987 in the Advertising
Department and became a general partner in January 1995.
Chris A. Gilkison, joined the Partnership in 1987 as a registered
representative and became a general partner in January 1994.
Ronald Gorgen, joined the Partnership in 1980 as a registered
representative and became a general partner in January 1993.
Kevin C. Haarberg, joined the Partnership in 1984 as a registered
representative and became a general partner in January 1995.
David L. Hayes, joined the Partnership in 1977 active in hiring and
training and became a general partner in January 1994.
Randy K. Haynes, joined the Partnership in 1984 as a registered
representative and became a general partner in January 1994.
John M. Hess, joined the Partnership in 1982 as a registered
representative and became a general partner in 1992.
Mary Beth Heying, joined the Partnership in 1984 in the Communications
Department and became a general partner in January 1994.
Don R. Howard, joined the Partnership in 1984 as a registered
representative and became a general partner in January 1995.
Steven M. Hull, joined the Partnership in 1973 as a registered
representative and became a general partner in 1994.
Gary R. Hunziker, joined the Partnership in 1986 as a registered
representative and became a general partner in January 1994.
Thomas G. Iorio, joined the Partnership in 1982 as a registered
representative and became a general partner in January 1994.
Timothy J. Kirley, joined the Partnership in 1983 as a registered
representative and became a general partner in 1994.
James A. Krekeler, joined the Partnership in 1988 in the Research
Department and became a general partner in January 1995. Prior to
this, he received his MBA from Washington University and is a
Chartered Financial Analyst.
Mark Leverenz, joined the Partnership in 1988 in the Operations
Department and became a general partner in January 1995. Prior to
this, he served as Vice President and Corporate Controller at a NYSE
registered broker/dealer and was a CPA with Arthur Andersen & Co.
Michele M. Liebman, joined the Partnership in 1985 in the Data
Processing Department and became a general partner in January 1994.
Thomas Migneron, joined the Partnership in 1985 as an internal auditor
and became a general partner in January, 1993.
Richard G. Miller, Jr., joined the Partnership in 1981 as a registered
representative and became a general partner in 1991.
Rodger Naugle, joined the Partnership in 1981 as a registered
representative and became a general partner in 1992.
Cynthia Paquette, joined the Partnership in 1985 in the Data
Processing Department and became a general partner in January 1993.
James L. Regnier, joined the Partnership in 1983 as a registered
representative and became a general partner in January 1994.
Wann V. Robinson, joined the Partnership in 1985 as a registered
representative and became a general partner in 1992.
Douglas Rosen, joined the Partnership in 1982 as a registered
representative and became a general partner in January 1993.
Robert Virgil, Jr., joined the Partnership in 1993 as a general
partner. Prior to this, he served as dean of the John M. Olin School
of Business at Washington University.
Vicki Westall, joined the Partnership in 1984 in the Product Review
Department and became a general partner in January, 1993. Prior to
this, she was an accountant with Peat, Marwick, Mitchell & Co.
Heidi Whitfield, joined the Partnership in 1982 as an equity analyst
and became a general partner in January 1993.
Robert D. Williams, joined the Partnership in 1986 as a registered
representative and became a general partner in 1994.
Price P. Woodward, joined the Partnership in 1984 as a registered
representative and became a general partner in January 1993.
Alan T. Wright, joined the Partnership in 1985 in Investment Banking
Department and became a general partner in January 1994.
Bradley A. Ytterberg, joined the Partnership in 1984 as a registered
representative and became a general partner in 1994.
Daniel A. Burkhardt is a director of Essex County Gas Company,
Amsebury, Massachusetts; Galaxy Cablevision Management, Inc.,
Sikeston, Missouri; Mid-American Reality Investments, Inc., Omaha,
Nebraska; Southeastern MI Gas Enterprises Inc., Port Huron, Michigan;
and Community Investment Partners, L.P. John C. Heisler, Philip R.
Schwab and John D. Beuerlein are directors of Cornerstone Mortgage
Investment Group, Inc. and Cornerstone Mortgage Investment Group II,
Inc. Ray L. Robbins, Jr. is a director of Community Investment
Partners, L.P. Robert Virgil, Jr. is a director of CPI Corp., St.
Louis, Missouri.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth all compensation paid by the
Partnership during the three most recent years to the five general
partners receiving the greatest compensation (including respective
shares of profit participation).
Returns to General
Partner Capital
___________________
(1) (2) (3) & (4)
Net income General Ptr
Deferred allocated invested Total
Compen- to General Capital at (1)(2)
Year Salaries sation Partners 12/31 (3)
John W. Bachmann 1994 120,000 5,553 1,681,517 4,115,163 1,807,070
1993 120,000 10,707 2,350,562 3,971,779 2,481,269
1992 120,000 11,306 2,298,834 3,408,360 2,430,140
Douglas E. Hill 1994 118,000 5,553 1,513,365 3,703,647 1,636,918
1993 118,000 10,707 1,994,416 3,369,994 2,123,123
1992 118,000 11,306 1,948,536 2,888,991 2,077,842
Ron Larimore 1994 118,000 5,553 1,513,365 3,703,647 1,636,918
1993 118,000 10,707 1,994,416 3,369,994 2,123,123
1992 118,000 11,306 1,992,323 2,953,912 2,121,629
Richie L. Malone 1994 118,000 5,553 1,513,365 3,703,647 1,636,918
1993 118,000 10,707 1,899,444 3,209,518 2,028,151
1992 118,000 11,306 1,810,493 2,596,846 1,939,799
Darryl W. Pope 1994 118,000 5,553 1,513,365 3,703,647 1,636,918
1993 118,000 10,707 1,994,416 3,369,994 2,123,123
1992 118,000 11,306 1,926,642 2,856,530 2,055,948
(1) Each non-selling general partner receives a salary generally
ranging from $90,000 - $120,000 annually. Selling general partners do
not receive a specified salary, rather, they receive the net sales
commissions earned by them (none of the five individuals listed above
earned any such commissions). Additionally, general partners who are
principally engaged in sales are entitled to office bonuses based on
the profitability of their respective branch office, on the same basis
as the office bonus program established for all investment
representative employees.
(2) Each general partner is a participant in the Partnership's profit
sharing plan which covers all eligible employees. Contributions to
the plan, which are within the discretion of the Partnership, are made
annually and have historically been determined based on approximately
twenty-four percent of the Partnership's net income. Allocation of
the Partnership's contribution among participants is determined by
each participant's relative level of eligible earnings, including in
the case of general partners, their profit participation.
(3) Each general partner is entitled to participate in the annual net
income of the Partnership based upon the respective percentage
interest in the Partnership of each partner. These interests in the
Partnership held by each general partner currently range from 1/10 of
1% to 4.50% in 1994. (1/10 of 1% to 4.95% in 1993 and 1/10 of 1% to
5.25% in 1992). At the discretion of the Managing Partner, the
partnership agreement provides that, generally, the first eight
percent of net income allocable to general partners be distributed on
the basis of individual merit or otherwise as determined by the
Managing Partner. Thereafter, the remaining net income allocable to
general partners is distributed based upon each individual's
percentage interest in the Partnership.
(4) Net income allocable to general partners is the amount remaining
after payment of interest and earnings on capital invested to limited
partners and subordinated limited partners.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Being organized as a limited partnership, management is vested in the
general partners thereof and there are no other outstanding "voting"
or "equity" securities. It is the opinion of the Partnership that the
general partnership interests are not securities within the meaning of
federal and state securities laws primarily because each of the
general partners participates in the management and conduct of the
business.
In connection with outstanding limited and subordinated limited
partnership interests (non-voting securities), 85 of the general
partners also own limited partnership interests and 34 of the general
partners also own subordinated limited partnership interests, as noted
in the table below.
As of February 24, 1995:
Name of Amount of
Beneficial Beneficial Percent of
Title of Class Owner Ownership Class
Limited Partnership All General
Interests Partners as
a Group $5,466,000 9%
Subordinated All General
Limited Partnership Partners as
Interests a Group 17,121,000 64%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In the ordinary course of its business the Partnership has extended
credit to certain of its partners and employees in connection with
their purchase of securities. Such extensions of credit have been
made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with non-affiliated persons, and did not involve more
than the normal risk of collectibility or present other unfavorable
features. The Partnership also, from time to time and in the ordinary
course of business, enters into transactions involving the purchase or
sale of securities from or to partners or employees and members of
their immediate families, as principal. Such purchases and sales of
securities on a principal basis are effected on substantially the same
terms as similar transactions with unaffiliated third parties.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
INDEX
(a) (1) The following financial statements are included in Part II,
Item 8:
Page
No.
Report of Independent Public Accountants 19
Consolidated Statements of Financial Condition as of
December 31, 1994 and 1993 20
Consolidated Statements of Income for the years ended
December 31, 1994, 1993 and 1992 22
Consolidated Statements of Cash Flows for the years
ended December 31, 1994, 1993 and 1992 23
Consolidated Statements of Changes in Partnership Capital
for the years ended December 31, 1994, 1993 and 1992 24
Notes to Consolidated Financial Statements 25
All schedules are omitted because they are not
required, inapplicable, or the information is otherwise
shown in the financial statements or notes thereto.
(b) Report on Form 8-K
No reports on Form 8-K were filed in the fourth quarter of 1994.
(c) Exhibits
Reference is made to the Exhibit Index hereinafter contained.
<PAGE>
EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1994
Exhibit Number Page Description
3.1 * Fifth Amended and Restated Limited
Partnership Agreement of Edward D, Jones
& Co., L.P., dated April 28, 1994,
incorporated herein by reference to
Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarter
ended June 24, 1994.
3.2 * Form of Limited Partnership Agreement of
Edward D. Jones & Co., L.P.,
10.1 * Form of Cash Subordination Agreement between
the Registrant and Edward D. Jones & Co.,
incorporated herein by reference to Exhibit
10.1 to the Company's registration statement
of Form S-1 (Reg. No. 33-14955).
10.2 * Note Purchase Agreement between Tempus
Corporation and Edward D. Jones & Co., L.P.
dated as of March 15, 1988, incorporated
herein by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for
the quarter ended March 25, 1988.
10.3 * Complaint for Permanent Injunction and Other
Equitable Relief and Final Judgment of
Permanent Injunction in re: SEC v. Edward D.
Jones & Co. (U.S. Dist. Ct. for Dist. of
Columbia; Civil Action No. 85-3078),
incorporated herein by reference to Exhibit
10(i) to the Company's current
report on Form 8-K dated September 24, 1985.
10.4 * Volume Discount Agreement dated May 27, 1987,
between Digital Equipment Corporation and
Edward D. Jones & Co., incorporated herein by
reference to Exhibit 10.13(c) to the Company's
registration statement on Form S-1
(Reg. No.33-14955).
10.5 * Master Lease Agreement dated as of May 29,
1987, between Digital Equipment Corporation
and Edward D. Jones & Co., incorporated herein
by reference to Exhibit 10.13(b) to the
Company's registration statement on Form S-1
(Reg. No. 33-14955).
10.6 * Master Lease Agreement dated as of October 17,
1988, between Edward D. Jones & Co., L.P., and
BancBoston Leasing, incorporated herein by
reference to Exhibit 10.1 to the Company's
Annual Report on Form 10-K for the year ended
September 30, 1988.
10.16 * Satellite Communications Agreement dated as of
September 12, 1988, between Hughes Network
Systems and Edward D. Jones & Co., L.P.,
incorporated herein by reference to Exhibit
10.1 to the Company's Annual Report on Form
10-K for the year ended September 30, 1988.
10.18 * Agreements of Lease between EDJ Leasing
Company and Edward D. Jones & Co., L.P., dated
August 1, 1991, incorporated herein by
reference to Exhibit 10.18 to the Company's
Annual Report or Form 10-K for the year ended
September 27, 1991.
10.20 * Edward D. Jones & Co., L.P. Note Purchase
Agreement dated as of May 8, 1992,
incorporated herein by reference to Exhibit
10.1 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 26, 1992.
10.21 * Purchase and Sale Agreement by and between EDJ
Leasing Co., L.P. and the Resolution
Trust Corporation incorporated herein by reference
to Exhibit 10.21 to the Company's Annual
Report or Form 10-K for the year ended
December 31, 1992.
10.22 Master Lease Agreement between EDJ Leasing
Company and Edward D. Jones & Co., L.P.,
dated March 9, 1993, and First Amendment
to Lease dated March 9, 1994.
10.23 Purchase Agreement by and between Edward D.
Jones & Co., L.P. and Genicom Corporation
dated November 25, 1992.
10.24 Mortgage Note and Deed of Trust and Security
Agreement between EDJ Leasing Co., L.P. and
Nationwide Insurance Company dated March 9,
1993.
10.25 Mortgage Note and Amendment to Deed of Trust
between EDJ Leasing Co., L.P. and Nationwide
Insurance Company dated March 9, 1994.
10.26 Mortgage Note; Dead of Trust and Security
Agreement; Assignment of Leases, Rents and
Profits; and Subordination and Attornment
Agreement between EDJ Leasing Co., L.P. and
Nationwide Insurance Company dated April 6,
1994, incorporated by reference to Exhibit
10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 25,
1994.
10.27 Note Purchase Agreement by Edward D. Jones
& Co., L.P., for $92,000,000 aggregate
principal amount of 7.95% subordinated
capital
notes due April 15, 2006, incorporated herein
by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the
quarter ended June 24, 1994.
10.28 Equipment Lease Agreement between IFA
Incorporated and Edward D. Jones & Company,
L.P., dated June 8, 1994, incorporated herein
by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the
quarter ended June 24, 1994.
10.29 Master Lease Agreement and Addendum by and
between Edward D. Jones & Co., L.P. and
General Electric Capital Corporation dated
April 21, 1994, incorporated herein by
reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the quarter
ended June 24, 1994.
10.30 Equipment Lease by and between Edward D.
Jones & Co., L.P., and EDJ Leasing Co., L.P.
dated April 1, 1994, incorporated herein by
reference to the Company's Quarterly Report
on Form 10-Q for the quarter ended
June 24, 1994.
10.31 $8,200,000 Promissory Note to Commerce Bank
National Association by EDJ Leasing Co.,
L.P.,
dated April 5, 1994, incorporated herein by
reference to Exhibit 10.5 to the Company's
Quarterly Report on Form 10-Q for the
quarter ended June 24, 1994.
10.32 Agreement and Plan of Acquisition between
The Jones Financial Companies and Boone
National Savings and Loan Association, F.A.,
incorporated herein by reference to
Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1994.
10.33 Credit Agreement between EDJ Leasing Co.,
L.P. and Southtrust Bank of Alabama, N.A.
dated October 26, 1994.
10.34 Master Lease Agreement between EDJ Leasing
Company and Edward D. Jones & Co., L.P.
dated October 26, 1994.
10.35 Lease Financing Line of Credit Agreement
and Term Note Agreement between EDJ
Leasing Co., L.P. and Enterprise Bank dated
December 6, 1994.
10.36 Master Lease Agreement between EDJ Leasing
Co. and Edward D. Jones & Co. L.P., dated
December 6, 1994.
10.37 Purchase Agreement by and between Edward
D. Jones & Co., L.P. and Tektronix Inc.
dated February 28, 1995.
24.1 45 Consent of Independent Public Accountants
25 * Delegation of Power of Attorney to Managing
Partner contained within Exhibit 3.1.
______________________________________________________________
* - Incorporated by reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized:
(Registrant) THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
____________________________________________________
By (Signature and Title) /s/ John W. Bachmann
__________________________________
John W. Bachmann, Managing Partner
Date March 24, 1995
____________________________________________________
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person on behalf of
the registrant and in the capacity and on the date indicated.
(Registrant) THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
____________________________________________________
By (Signature and Title) /s/ John W. Bachmann
__________________________________
John W. Bachmann, Managing Partner
Date March 24, 1995
____________________________________________________
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT
TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
There have been no annual reports sent to security holders covering
the registrant's last fiscal year nor have there been any proxy
statements, form of proxy or other proxy soliciting material sent to
any of registrant's security holders.
Exhibit 10.33
LINE OF CREDIT PROMISSORY NOTE
Birmingham, Alabama
$8,000,000 October 26,
1994
FOR VALUE RECEIVED, the undersigned EDJ LEASING CO., L.P., a
Missouri limited partnership ("Maker"), promises to pay to the order
of SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, a national
banking association (hereinafter, together with any holder of this
Note, the "Holder"), at its main office in the City of Birmingham,
Alabama, or at such other address as the Holder may from time to time
designate in writing, the principal sum of EIGHT MILLION AND NO/100
DOLLARS ($8,000,000),
(subject to reduction and conversion to a term loan as provided for in
the Credit Agreement hereinafter described) or so much as may be
advanced by Holder from time to time, together with interest thereon,
such principal and interest to be payable as provided in that certain
Credit Agreement of even date between Maker and Holder (as the same
may hereafter be modified or amended, the "Credit Agreement").
Reference to the Credit Agreement is hereby made for a statement of
the rights of Holder and the duties and obligations of Maker, but
neither this reference to the Credit Agreement nor any provision
thereof shall affect or impair the absolute and unconditional
obligation of Maker to pay the principal and interest of this Note
when due. Capitalized terms used herein without definition shall have
the meanings ascribed to such terms in the Credit Agreement.
The outstanding principal amount shall bear interest at the rates
provided for in the Credit Agreement. All payments shall be applied
first to interest then due and payable and any balance shall be
applied in reduction of principal. The principal and interest shall
be payable in lawful money of the United States which shall be legal
tender for public and private debts at the time of payment. All
interest rates herein provided shall be calculated on the basis of a
360-day year by multiplying the outstanding principal amount by the
applicable per annum rate, multiplying the product thereof by the
actual number of days elapsed, and dividing the product so obtained by
360.
Pursuant to the Credit Agreement, this Note evidences a line of
credit available to the Maker pursuant to which the Holder will make
Advances of the principal sum hereof to the Maker, subject, however,
to the limitations on advances which are more particularly set forth
in the Credit Agreement. It is contemplated that the Maker may
borrow, repay, and reborrow up to the principal sum hereof, subject to
the terms and conditions of the Credit Agreement. It is further
contemplated that by reasons of prepayment hereunder, there may be
times when there is no indebtedness owing hereunder; notwithstanding
such occurrence, this Note shall remain valid and shall be in full
force and effect as to each principal advance made hereunder
subsequent to such occurrence. If Maker shall deliver the Notice of
Conversion, the loan evidenced by this Note will convert from a
revolving credit facility to a term facility, and no further Advances
will be made.
Maker shall pay to Holder a late charge equal to five percent
(5%) of any payment which is not received by Holder within ten (10)
days of the due date therefor in order to cover the additional
expenses incident to the handling and processing of delinquent
payments.
This Note is secured by that certain Assignment and Security
Agreement between Maker and Holder of even date herewith, as the same
may hereafter be modified or amended, and by that certain Guaranty
Agreement executed by The Jones Financial Companies, a Limited
Partnership in favor of Holder.
The principal sum evidenced by this Note, together with accrued
interest, shall become immediately due and payable at the option of
the Holder upon the occurrence of any of the following, each of which
shall constitute an "Event of Default" hereunder:
(1) any failure to pay within seven (7) days of the due date
thereof any installment of principal or interest due hereunder;
(2) any Event of Default under the terms of the Credit Agreement,
which such "Events of Default" are incorporated herein by reference as
if set forth in full herein.
Upon any Event of Default, Maker agrees to pay interest to Holder at
the Default Rate on the aggregate indebtedness represented hereby,
including accrued interest, until such aggregate indebtedness is paid
in full. Maker will also pay to Holder, in addition to the amount
due, all costs of collecting, securing or attempting to collect or
secure this Note, including without limitation, court costs and
attorneys' fees, including attorneys' fees in any appellate or
bankruptcy proceedings.
With respect to the amounts due pursuant to this Note, Maker
waives the following:
(l) All rights of exemption of property from levy or sale under
execution or other process for the collection of debts under the
Constitution or laws of the United States or any state thereof;
(2) Demand, presentment, protest, notice of dishonor, notice of
nonpayment, suit against any party, diligence in collection, and all
other requirements necessary to enforce this Note; and
(3) Any further receipt by or acknowledgment of any collateral
now or hereafter deposited as security for the obligations hereunder.
In no event shall the amount of interest due or payable hereunder
(including interest calculated at the Default Rate) exceed the maximum
rate of interest allowed by applicable law, and in the event such
payment is inadvertently paid by Maker or inadvertently received by
Holder, then such excess sum shall be credited as a payment of
principal, unless Maker elects to have such excess sum refunded to
Maker forthwith. It is the express intent hereof that Maker not pay
and Holder not receive, directly or indirectly, interest in excess of
that which may be legally paid by Maker under applicable law.
Holder shall not by any act, delay, omission, or otherwise be
deemed to have waived any of its rights or remedies, and no waiver of
any kind shall be valid unless in writing and signed by Holder. All
rights and remedies of Holder under the terms of this Note and
applicable statutes or rules of law shall be cumulative, and may be
exercised successively or concurrently. Maker agrees that there are
no defenses, equities or setoffs with respect to the obligations set
forth herein.
The obligations of Maker hereunder shall be binding upon and
enforceable against Maker and its successors and assigns. Any
provisions of this Note which may be unenforceable or invalid under
any law shall be ineffective to the extent of such unenforceability or
invalidity without affecting the enforceability or validity of any
other provision hereof.
Holder may, at its option, release any guarantor from the
obligations of any guaranty or release any collateral given to secure
the indebtedness evidenced hereby, and no such release shall impair
the obligations of Maker to Holder.
THE VALIDITY, INTERPRETATION, ENFORCEMENT AND EFFECT OF THIS NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF ALABAMA. THE HOLDER'S PRINCIPAL PLACE OF BUSINESS IS
LOCATED IN JEFFERSON COUNTY IN THE STATE OF ALABAMA, AND THE MAKER
AGREES THAT THIS NOTE SHALL BE DELIVERED TO AND HELD BY HOLDER AT SUCH
PRINCIPAL PLACE OF BUSINESS, AND THE HOLDING OF THIS NOTE BY HOLDER
THEREAT SHALL CONSTITUTE SUFFICIENT MINIMUM CONTACTS OF MAKER WITH
JEFFERSON COUNTY AND THE STATE OF ALABAMA FOR THE PURPOSE OF
CONFERRING JURISDICTION UPON THE FEDERAL AND STATE COURTS PRESIDING IN
SUCH COUNTY AND STATE. MAKER CONSENTS THAT ANY LEGAL ACTION OR
PROCEEDING ARISING HEREUNDER MAY BE BROUGHT IN THE CIRCUIT COURT OF
THE STATE OF ALABAMA, JEFFERSON COUNTY, ALABAMA OR THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA AND ASSENTS AND
SUBMITS TO THE PERSONAL JURISDICTION OF ANY SUCH COURT IN ANY ACTION
OR PROCEEDING INVOLVING THIS NOTE. NOTHING HEREIN SHALL LIMIT THE
JURISDICTION OF ANY OTHER COURT.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, MAKER HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM,
SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING OUT OF OR IN ANY
WAY PERTAINING OR RELATING TO THIS NOTE OR THE INDEBTEDNESS EVIDENCED
HEREBY, OR (II) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO
OR INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO
THIS NOTE, OR THE INDEBTEDNESS EVIDENCED HEREBY OR IN CONNECTION WITH
THE TRANSACTIONS RELATED HERETO OR CONTEMPLATED HEREBY OR THE EXERCISE
OF EITHER PARTY'S RIGHTS AND REMEDIES HEREUNDER, IN ALL OF THE
FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. MAKER AGREES THAT HOLDER MAY
FILE A COPY OF THIS WAIVER WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF MAKER IRREVOCABLY TO
WAIVE ITS RIGHT TO TRIAL BY JURY, AND THAT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN MAKER
AND HOLDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, the Maker has caused this instrument to be
executed by its duly authorized partner on the day and year first
above written.
EDJ LEASING CO., L.P., a Missouri
limited
partnership
By: LHC, Inc., a Missouri corporation
Its General Partner
By:
Its:
STATE OF ALABAMA )
:
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in
said State, hereby certify that Steven Novik, whose name as
of LHC, Inc., a Missouri corporation, as general partner of EDJ
Leasing Co., L.P., a Missouri limited partnership, is signed to the
foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of the instrument, he,
as such officer and with full authority, executed the same voluntarily
for and as the act of said corporation in its capacity as aforesaid.
Given under my hand and official seal this 26th day of October,
1994.
NOTARY PUBLIC
My Commission Expires:
EXHIBIT B
LOCATIONS
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, made and entered into as of the 26th
day of October, 1994, is from THE JONES FINANCIAL COMPANIES, a Limited
Partnership, a Missouri limited partnership (the "Guarantor") to
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, a national banking
association (the "Lender").
R E C I T A L S:
EDJ Leasing Co., L.P., a Missouri limited partnership (the
"Borrower"), has requested a line of credit loan from the Lender in
the principal amount of up to sum of $8,000,000 (the "Loan"), to be
evidenced by a Line of Credit Promissory Note of even date herewith
(as the same may hereafter be extended, renewed, modified or amended,
the "Note") payable by Borrower to the order of Lender. The Note is
to be administered in accordance with a Credit Agreement between
Borrower and Lender of even date herewith (as the same may hereafter
be extended, renewed, modified or amended, the "Credit Agreement") and
is secured by an Assignment and Security Agreement between Borrower
and Lender of even date herewith (as the same may hereafter be
extended, renewed, modified or amended, the "Security Agreement").
The Loan is being made in order to finance the Borrower's acquisition
of certain equipment to be leased to Edward D. Jones & Co., L.P. (the
"Lessee"). Guarantor owns ninety-nine percent (99%) of the limited
partnership interests of the Borrower and the Lessee, and the making
of the Loan will be of direct and substantial benefit to Guarantor.
As a condition to making the Loan, the Lender has required that the
Guarantor guarantee the Loan and any other obligations of Borrower to
the Lender pursuant to the Note, the Credit Agreement, and the
Security Agreement, and any other documents now or hereafter executed
by the Borrower or others evidencing, securing, or relating to the
Loan (referred to herein collectively as the "Loan Documents"), and
Guarantor desires to induce Lender to make the Loan to Borrower.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, as
an inducement to the Lender to make the Loan to Borrower, and as
security for the payment of the Loan and all interest thereon, and the
Note evidencing the Loan, and all renewals and extensions of the Loan,
and all other indemnities, charges, expenses, and other indebtedness
now existing and hereafter incurred by the Borrower to the Lender in
connection with the Loan of whatever nature (the Loan and all
indemnities, charges, expenses and other indebtedness and liabilities
secured hereby being hereinafter called the "Obligations"), the
Guarantor agrees and covenants with Lender, and represents and
warrants to Lender, as follows:
1. The Guarantor hereby unconditionally guarantees to the
Lender the due, regular, and punctual payment of the Obligations. The
Guarantor hereby further guarantees the prompt performance of any
other obligations of any kind or character of the Borrower to the
Lender set forth in the Loan Documents and upon failure of the
Borrower timely to do so, the Guarantor guarantees to Lender the
payment of all costs and reasonable expenses incurred by Lender in
performing such Obligations. Further, the Guarantor guarantees the
payment of all costs, reasonable attorney's fees, and expenses which
may be incurred by the Lender by reason of a default of the Borrower
under the Obligations.
In the event of any default by the Borrower in the payment of
the Obligations, the Guarantor unconditionally promises to pay to the
Lender such amounts as are necessary to cure the default, or at the
option of the Lender, the Guarantor agrees to pay the entire
Obligations.
This Guaranty is an unconditional guaranty, and the Guarantor
agrees that the Lender, in the event of a default of the Borrower
which has not been cured within any applicable cure periods, shall not
be required to assert any claim or cause of action against the
Borrower before asserting any claim or cause of action against the
Guarantor under this Agreement. Furthermore, the Guarantor agrees
that the Lender shall not be required to pursue or foreclose on any
collateral that it may receive from the Borrower, the Guarantor or
others as security for any Obligations before making a claim or
asserting a cause of action against the Guarantor under this
Agreement.
The failure of the Lender to perfect any portion of its
security interest in the collateral as set forth in the Loan Documents
or any other collateral now or hereafter securing all or any part of
the Obligations shall not release the Guarantor from its liability and
obligations hereunder.
Notice of acceptance of this Guaranty and of any default by the
Borrower is hereby waived by the Guarantor. Presentment, protest,
demand, and notice of protest and demand, and notice of receipt of any
and all collateral, and of the exercise of possessory remedies or
foreclosure on any and all collateral received by the Lender from the
Borrower or the Guarantor are hereby waived. All settlements,
compromises, compositions, accounts stated, and agreed balances in
good faith between any primary or secondary obligors on any accounts
received as collateral shall be binding upon the Guarantor.
This Guaranty shall not be affected, modified, or impaired by
the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshalling of
assets and liabilities, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangements,
composition with creditors or readjustment of, or other similar
proceedings affecting the Borrower or the Guarantor, or any of the
assets belonging to any of them, nor shall this Guaranty be affected,
modified or impaired by the invalidity of the Note or the Loan
Documents.
Without notice to the Guarantor, without the consent of the
Guarantor, and without affecting or limiting the Guarantor's liability
hereunder, the Lender may:
(a) grant the Borrower extensions of time for payment of the
Obligations or any part hereof;
(b) renew any of the Obligations;
(c) grant the Borrower extensions of time for performance of
agreements or other indulgences;
(d) at any time release any or all of the collateral held by
the Lender as security for the Obligations or release the Borrower;
(e) compromise, settle, release, or terminate any or all of
the obligations, covenants, or agreements of the Borrower under the
Note; and
(f) modify or amend any obligation, covenant or agreement of
the Borrower set forth in any one of more of the Loan Documents.
This Guaranty shall not terminate and may not be terminated by
the Guarantor until such time as all Obligations, including any
renewals or extensions thereof, have been paid in full and such
payments of the Obligations have become final and are not subject to
being refunded or rescinded under the Bankruptcy Code or other
applicable law. If any collateral secures this Guaranty at any time,
Lender shall not be required to release such collateral unless and
until Lender is satisfied that such payments of the Obligations are
not subject to refund or rescission. If this Guaranty is returned to
Guarantor or marked "cancelled" or marked with words of similar
import, such return or cancellation by Lender shall be deemed to be
subject to the right of Lender thereafter to reinstate the guarantees
herein and enforce this Guaranty against Guarantor for Obligations
which were either unknown or in an unliquidated amount at the time of
such return or cancellation.
2. The Guarantor represents and warrants to the Lender and
covenants as follows:
(a) that it is a limited partnership duly organized and
validly existing under the laws of the State of Missouri;
(b) that it has full power and unrestricted right to enter
into this Agreement, to incur the obligations provided for herein, and
to execute and deliver the same to Lender, and that when executed and
delivered, this Agreement will constitute a valid and legally binding
obligation of the Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, and general principles of
equity which may limit the availability of equitable remedies;
(c) the execution, delivery and performance of this Agreement
will not conflict with or be in contravention of any law, regulation,
rule, order or judgment applicable to Guarantor, its partnership
agreement or certificate of limited partnership (the "Organizational
Documents"), or any other agreement, instrument, mortgage, deed of
trust, lien, lease, judgment, decree or order to which Guarantor is a
party or is subject or by which Guarantor is bound or affected;
(d) Guarantor has received no notice of a declared default
under any agreement or instrument nor does there exist any restriction
in the Organizational Documents that causes or would cause a material
adverse effect on its business, properties, operations or condition,
financial or otherwise; and
(e) this Agreement has been duly executed and delivered on
behalf of the Guarantor.
3. The Guarantor covenants and agrees that so long as any of
the Obligations are outstanding, to:
duly and punctually pay or cause to be paid all principal
and interest of any material indebtedness of Guarantor to other
creditors, comply with and perform all conditions, terms and
obligations of the notes or other instruments evidencing such
indebtedness and the mortgages, deeds of trust, security agreements
and other instruments evidencing security for such indebtedness;
maintain its existence and, in each jurisdiction in which
the character of the properties owned by it or in which the
transaction of its business makes qualification necessary, maintain
such qualification and good standing; and
for the fiscal year ending July 31, 1994 and for each
fiscal year thereafter, Guarantor shall provide Lender, as soon as
available and in any event within ninety (90) days after the end of
each fiscal year of Guarantor, the balance sheets, statements of
income and retained earnings, and a statement of cash flow of
Guarantor for such year, all of which such financial statements shall
be audited and certified by independent certified public accountants
acceptable to Lender as (i) fairly presenting the financial condition
of Guarantor as at the end of such fiscal year and the results of the
operations of Guarantor for such period and (ii) having been prepared
in accordance with generally accepted accounting principles,
consistently applied.
4. Anything in this Guaranty to the contrary notwithstanding,
Guarantor shall not be required, directly or indirectly, by virtue of
this Guaranty, to make any payments or cure any defaults in respect to
any indebtedness or other obligations of Borrower or itself to persons
other than Lender.
5. The Guarantor hereby irrevocably waives (a) all rights of
subrogation and indemnification against Borrower, (b) all claims
against Borrower that Guarantor now or hereafter has as a result of
paying any indebtedness or other obligations of Borrower hereunder or
otherwise, and (c) all rights in any collateral heretofore, now or
hereafter given to Guarantor by Borrower.
6. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors, and
assigns.
7. This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of Alabama. Guarantor consents
that any legal action or proceeding arising hereunder may be brought
at the election of Lender, in the Circuit Court of the State of
Alabama, Jefferson County, Alabama or in the United States District
Court for the Northern District of Alabama, Southern Division, and
Guarantor assents and submits to the personal jurisdiction of any such
court in any such action or proceeding.
8. In the event that any provision hereof is deemed to be
invalid by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be
construed as not containing such provisions, and the invalidity of
such provisions shall not affect other provisions hereof which are
otherwise lawful and valid and shall remain in full force and effect.
9. Any notice required herein or by applicable law shall be
deemed given when (a) personally delivered (to the person or
department if one is designated below), (b) sent by United States
Mail, certified or registered, postage prepaid, return receipt
requested, or (c) sent by Federal Express or overnight United States
Mail or other national overnight carrier, and addressed in each such
case as set forth below.
If to the Guarantor to:
The Jones Financial Companies, L.P.
201 Progress Parkway
St. Louis, Missouri 63043-3042
Attention: Steven Novik
If to the Lender to:
SouthTrust Bank of Alabama,
National Association
P. O. Box 2554
420 North 20th Street
Birmingham, Alabama 35290 (if by mail for delivery to the P.O.
Box); 35203 (if for delivery to the street address)
Attention: Regional Corporate Banking
Either party may by notice given as herein provided change its address
to another single address.
10. The failure at any time or times hereafter to require
strict performance by the Guarantor of any of the provisions,
warranties, terms, and conditions contained herein or in any other
agreement, document or instrument now or hereafter executed by the
Guarantor and delivered to the Lender shall not waive, affect or
diminish any right of the Lender thereafter to demand strict
compliance or performance therewith and with respect to any other
provisions, warranties, terms, and conditions contained in such
agreements, documents, and instruments, and any waiver of any default
shall not waive or affect any other default, whether prior or
subsequent thereto and whether of the same or a different type. None
of the warranties, conditions, provisions, and terms contained in this
Agreement or in any agreement, document or instrument now or hereafter
executed by the Guarantor and delivered to the Lender shall be deemed
to have been waived by any act or knowledge of the Lender, its agents,
officers or employees, but only by an instrument in writing, signed by
an officer of the Lender, and directed to the Guarantor specifying
such waiver.
11. If, at any time or times hereafter, the Lender employs
counsel to advise or provide other representation with respect to this
Agreement or any other agreement, document or instrument heretofore,
now or hereafter executed by the Guarantor and delivered to the Lender
with respect to the Borrower or the Obligations or to commence, defend
or intervene, file a petition, complaint, answer, motion or other
pleadings or to take any other action in or with respect to any suit
or proceeding relating to this Agreement or any other agreement,
instrument or document heretofore, now or hereafter executed by the
Guarantor and delivered to the Lender with respect to the Borrower or
the Obligations, or to represent the Lender in any litigation with
respect to the affairs of the Guarantor or to enforce any rights of
the Lender or obligations of the Guarantor or any other person, firm
or corporation which may be obligated to the Lender by virtue of this
Agreement or any other agreement, document or instrument heretofore,
now or hereafter delivered to the Lender by or for the benefit of the
Guarantor with respect to the Borrower or the Obligations, then in any
such events, all of the reasonable attorney's fees arising from such
services and any expenses, costs and charges relating thereto shall
constitute additional obligations of the Guarantor, payable on demand.
12. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings both oral and
written between the parties with respect to the subject matter hereof.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but such counterparts together
shall constitute one and the same instrument.
13. TO THE EXTENT PERMITTED BY APPLICABLE LAW GUARANTOR HEREBY
WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS GUARANTY, THE LOAN,
THE NOTE, OR ANY OF THE LOAN DOCUMENTS. GUARANTOR HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR AGENT OF LENDER OR LENDER'S COUNSEL HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE
EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS KNOWING AND BARGAINED-
FOR WAIVER OF GUARANTOR'S RIGHT TO A TRIAL BY JURY TRIAL. GUARANTOR
ACKNOWLEDGES THAT LENDER HAS BEEN INDUCED TO MAKE THE LOAN IN PART BY
THE PROVISIONS OF THIS PARAGRAPH.
IN WITNESS WHEREOF, the Guarantor has executed this instrument
as of the day and year first above written.
GUARANTOR:
THE JONES FINANCIAL COMPANIES, a Limited
Partnership, a Missouri limited partnership
By:
Its General Partner
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in
said State, hereby certify that Steven Novik, whose name as a general
partner of The Jones Financial Companies, a Limited Partnership, a
Missouri limited partnership, is signed to the foregoing instrument,
and who is known to me, acknowledged before me on this day that, being
informed of the contents of the instrument, he, with full authority,
executed the same voluntarily for and as the act of said limited
partnership in his capacity as aforesaid.
Given under my hand and seal of office this 26th day of October,
1994.
Notary Public
[NOTARIAL SEAL]
My commission expires:
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 26, 1994, is between
and among EDJ LEASING CO., L.P., a Missouri limited partnership
("Borrower") and SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, a
national banking association ("Lender").
R E C I T A L S:
A. Borrower has requested a line of credit loan from Lender in
the principal amount of up to $8,000,000 (subject to reduction and
conversion to a term loan as hereinafter set forth), the proceeds of
which will be used to purchase certain equipment to be leased by
Borrower to the Lessee.
B. Lender is willing to make such line of credit available to
Borrower on the terms and conditions set forth herein.
AGREEMENT:
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1. DEFINITIONS
In addition to the terms defined in the introductory paragraph
hereof, the following terms shall have the following respective
meanings:
"Advance" means a disbursement by Lender to Borrower of principal
of the Loan pursuant to Article 2 hereof.
"Advance Request Form" means the form attached hereto as Exhibit
A.
"Base Rate" means the rate of interest designated by Lender
periodically as its Base Rate. The Base Rate is not necessarily the
lowest rate charged by Lender. The Base Rate on the date of this
Agreement is Seven and three quarters percent (7.75%) per annum.
"Business Day" shall mean a day on which banks are open for
business in New York, New York, and London, England, and on which
dealings in U.S. Dollars are carried on in the London interbank
market.
"Closing Date" means the date of this Agreement.
"Compliance Certificate" means the certificate in the form
attached hereto as Exhibit B.
"Default Rate" means two percent (2%) in excess of the rate in
effect hereunder.
"Employee Plan" means any plan subject to Title IV of ERISA and
maintained in whole or in part for employees of Borrower.
"Equipment" means all of Borrower's equipment purchased or
otherwise acquired with proceeds of the Loan (whether or not leased to
Lessee pursuant to the Lease), together with all replacement parts,
repairs, additions and accessories incorporated therein, and/or
affixed thereto and/or substitutions therefor, wherever located.
"ERISA" means the Employee Retirement Income security Act of
1974, together with all amendments from time to time thereto,
including any rules or regulations promulgated thereunder.
"Estoppel Agreement" means that certain estoppel agreement
executed by Lessee in favor of Lender, as the same may hereafter be
modified or amended.
"Eurodollar Interest Period" shall mean each successive sixty
(60), ninety (90), or one hundred eighty (180) day period, as selected
by Borrower, from and after the date designated by Borrower in a
Eurodollar Rate Election Notice; provided such Eurodollar Interest
Period may not extend beyond the maturity date of the Note; and
provided further that if any such Eurodollar Interest Period would
otherwise end on a day which is not a Business Day, that Eurodollar
Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to extend such Eurodollar
Interest Period beyond the maturity date of the Note, in which event
such Eurodollar Interest Period shall end on the immediately preceding
Business Day.
"Eurodollar Rate" shall mean a variable per annum rate of
interest equal to the sum of (a) the quotient of (i) the rate (stated
as an annual percentage rate rounded to the nearest one-sixteenth of
one percent (1/16 of 1%)) determined by Lender, in its reasonable
judgment, to be the rate at which Lender could acquire dollar deposits
in an amount equal to the then-outstanding principal balance hereof in
the London, England, interbank eurodollar market at or about 11:00
a.m. London time (known as the "11:00 LIBOR fixing") for delivery on
the first day of each Eurodollar Interest Period, divided by (ii) 1.00
minus any Reserve Requirement applicable to "eurodollar loans" (as
such term is defined in Regulation D) for each Eurodollar Interest
Period (expressed as a decimal), plus (b) one hundred forty-five basis
points (1.45%). For any period during which the outstanding principal
balance hereof bears interest at the Eurodollar Rate, said rate shall
be recalculated upon termination of each successive Eurodollar
Interest Period, and the rate of interest payable hereunder shall
fluctuate on the date of such recalculation.
"Eurodollar Rate Election" shall mean an election by Borrower
hereof to convert the interest rate applicable to the outstanding
principal balance of the Loan to the Eurodollar Rate.
"Eurodollar Rate Election Notice" shall mean a written notice of
Borrower's Eurodollar Rate Election delivered to Lender, which notice
must specify the Eurodollar Interest Period as either sixty (60) days,
ninety (90) days, or one hundred eighty (180) days.
"Event of Default" means the events described in Section 7.1
hereof.
"Fixed Charge Coverage" means a fraction in which the numerator
is the sum of the net operating income of the Borrower after provision
has been made for federal and state taxes for the preceding twelve
(12) months, plus interest expense (including capitalized interest),
lease expense (including capitalized leases), and rental expenses of
the Borrower for the applicable period, plus the sum of noncash
expenses or allowances for such period (including, without limitation,
amortization or write down of intangible assets, depreciation,
depletion, and deferred taxes and expenses) and the denominator is the
current portion of Long Term Debt of the Borrower as of the applicable
date, and interest expense (including capitalized interest), lease
expense (including capitalized leases), and rental expenses of the
Borrower for the preceding twelve (12) months.
"Fixed Rate" means a fixed rate of interest equal to one hundred
seventy (170) basis points in excess of the weekly average yield for
U.S. Treasury Securities adjusted to a constant maturity of three (3)
years, as reported in Federal Reserve Statistical Release H.15(519)
"Selected Interest Rates" quoted for the week immediately preceding
the date that the Fixed Rate is to take effect.
"GAAP" means, as in effect from time to time, generally accepted
accounting principles consistently applied with respect to a Person
conducting a business the same as or similar to that of Borrower.
"Guarantor" means The Jones Financial Companies, a Limited
Partnership, a Missouri limited partnership.
"Guaranty" means that certain Guaranty Agreement executed by
Guarantor in favor of Lender, as the same may hereafter be modified or
amended.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
together with all amendments from time to time thereto, including any
rules or regulations promulgated thereunder.
"Lease" means that certain Lease Agreement between Borrower and
Lessee dated October 26, 1994.
"Lessee" means Edward D. Jones & Co., L.P., a Missouri limited
partnership.
"Lien" means any voluntary or involuntary mortgage, security
deed, deed of trust, lien, pledge, assignment, charge, security
interest, title retention agreement, financing lease, levy, execution,
seizure, judgment, attachment, garnishment, charge or other
encumbrance of any kind.
"Loan" means the $8,000,000 credit facility (subject to reduction
and conversion to a term loan as hereinafter set forth) available to
Borrower pursuant to Article 2 of this Agreement, with accrued
interest on such principal and other agreed charges as shall be
outstanding at any given time.
"Loan Documents" means this Agreement, the Note, the Security
Agreement, the Guaranty, the Estoppel Agreement, and any other
documents or instruments now or hereafter executed evidencing,
securing, or relating to the Loan.
"Long Term Debt" means all obligations of the Borrower (including
capital lease obligations) which are due more than one (1) year from
the date as of which the calculation thereof is to be made.
"Maturity Date" means July 30, 2000.
"Note" means that certain Line of Credit Promissory Note, dated
of even date herewith, in the original principal amount of $8,000,000
executed and delivered by Borrower to Lender, evidencing the liability
of Borrower to pay the Loan to Lender or its order, as the same may
hereafter be renewed, extended, modified, or amended.
"Notice of Conversion" means a written notice from Borrower to
Lender of Borrower's election to convert the Loan to term loan
facility, and to convert the interest rate accruing on the Loan to the
Fixed Rate.
"Organizational Documents" means in the case of the Borrower and
Guarantor, their respective certificates of limited partnership and
partnership agreements, and in the case of the general partner of the
Borrower, its articles of incorporation and bylaws, and all amendments
to any of the foregoing.
"Person" means an individual, corporation, partnership,
association, joint-stock company, trust, business trust,
unincorporated organization or joint venture, or a court or
governmental authority.
"Potential Default" means an event, which with the giving of
notice or lapse of time or both, will constitute an Event of Default.
"SEC" means the Securities and Exchange Commission.
"Security Agreement" means that certain Assignment and Security
Agreement between Borrower and Lender of even date herewith, as the
same may hereafter be modified or amended, whereby Borrower assigns
all of its right, title, and interest in and to the Lease and the
Equipment to Lender as security for the Loan.
ARTICLE 2. THE LOAN
2.1. Disbursement of Advances. Subject to the terms and
conditions of this Agreement, Lender agrees to make Advances to
Borrower from time to time in an aggregate principal amount at any
time outstanding of not more than the following amounts during each of
the following periods:
Period Aggregate Amount Available
Closing Date - 9/30/96 $8,000,000
10/1/96 - 9/30/97 6,750,000
10/1/97 - 9/30/98 5,500,000
10/1/98 - 9/30/99 4,250,000
10/1/99 - 7/30/00 3,000,000
Borrower may borrow, repay and reborrow the principal of the Loan, all
in accordance with the terms and conditions of this Agreement. Each
Advance shall be disbursed by Lender's depositing the amount of such
Advance into a checking account of Borrower maintained with Lender or
otherwise disbursed in a manner acceptable to Lender and Borrower. If
Borrower shall elect to deliver the Notice of Conversion to Lender,
the Loan will convert from a revolving credit facility to a term
facility, and no further Advances will be made.
2.2. The Note. The Loan shall be evidenced by the Note. The
Note shall represent the obligation of Borrower to pay the aggregate
amount of Advances outstanding under the Loan from time to time
outstanding, plus interest thereon and agreed charges as herein
provided. Lender is hereby authorized to enter the date and amount of
each Advance and each payment of principal and interest on the Loan on
a schedule to be annexed to and constituting a part of the Note, and
such entries shall constitute prima facie evidence of the accuracy of
information so entered. In lieu of endorsing said schedule as
hereinabove provided, Lender is hereby authorized, at its option, to
record such Advances and such payments of principal and interest in
its books and records, and such books and records shall constitute
prima facie evidence of the accuracy of the information contained
therein. From time to time, Lender shall provide Borrower with a copy
of such schedule and/or such books and records upon Borrower's
reasonable written request therefor. The Note shall (a) be dated the
date of this Agreement, (b) be stated to mature on July 30, 2000, and
(c) bear interest from the date of each Advance on the outstanding
Advances made from time to time at the applicable interest rate per
annum specified in Section 2.5 hereof.
2.3. Borrower's Requests for Advances. The disbursement of each
Advance shall be initiated by Borrower's delivering an Advance Request
Form to Lender. Each Advance must be in increments of $100,000. Such
Advance Request Form must be received by Lender no later than three
(3) Business Days prior to the Business Day such Advance is to be
disbursed. Each Advance Request Form must be signed by either (1)
, (2) , or (3) any other Person
designated in writing by , and shall include
(a) the amount of such Advance, (b) the date such Advance is to be
disbursed, (c) the identification of Borrower's checking account
maintained with Lender into which such Advance is to be deposited, and
(d) copies of invoices for the Equipment to be purchased with the
proceeds of such Advance, or in the case of reimbursement for
Equipment previously purchased, copies of paid receipts, in form and
content satisfactory to Lender, which shall include, without
limitation, a general description of the Equipment purchased or to be
purchased, and the serial number(s) therefor, if applicable.
2.4. Payments.
On December 1, 1994, and on the same day of each successive
calendar month thereafter, and at the end of each Eurodollar Interest
Period, Borrower shall pay to Lender all accrued and unpaid interest
on the outstanding principal balance of the Loan.
On the Maturity Date, Borrower shall pay to Lender the
outstanding principal balance, together with all accrued and unpaid
interest.
All payments will be applied first to interest then due and
payable and any excess shall be applied in reduction of principal.
2.5. Interest Rate.
Subject to paragraph (b) below, the principal balance of the
Loan shall bear interest at the Base Rate, except that the Borrower
may initially or at any time thereafter elect the Eurodollar Rate in
accordance with the procedures set forth herein, and upon the
expiration of any Eurodollar Interest Period, the Loan will bear
interest at the Base Rate unless and until a new Eurodollar Rate
Election is made. Borrower shall exercise such Eurodollar Rate
Election by delivering to Lender a Eurodollar Rate Election Notice not
less than two (2) Business Days prior to the date on which the
Borrower desires the Eurodollar Interest Period to begin (unless
Lender in its sole discretion, elects to accept such election on a
shorter notice from time to time). Borrower shall only have one
Eurodollar Rate Election in effect at any given time, and any Advances
made during an existing Eurodollar Interest Period shall bear interest
at the Base Rate until a new Eurodollar Rate Election is made by the
Borrower.
The Borrower shall have a one time option to convert the
interest rate accruing on the Loan to the Fixed Rate, which option
shall be exercisable at any time after September 30, 1995. Borrower
must exercise such option by delivering the Notice of Conversion to
Lender. On the next Business Day after Lender receives such Notice of
Conversion if the Base Rate is in effect, or on the next Business Day
following expiration of any Eurodollar Interest
Period, if the Eurodollar Rate is in effect, and thereafter through
the Maturity Date, the outstanding principal balance of the Loan shall
bear interest at the Fixed Rate.
Borrower agrees that, notwithstanding anything to the
contrary herein, if at any time Lender determines, in accordance with
reasonable and ordinary commercial standards, that its acquisition of
funds in the London interbank market would be unsafe, impractical or
in violation of any law, regulation, guideline or order, Lender may so
notify Borrower in writing or by telephone, and upon the giving of
such notice, any Eurodollar Rate Election then in effect shall
immediately terminate and the outstanding principal balance hereof
shall thereupon commence to bear interest at the Base Rate. Borrower
further agrees that, notwithstanding the fact that Lender may have
based the interest rate applicable hereunder upon Lender's cost of
funds in the Eurodollar market, Lender shall not be required actually
to obtain funds from such source at any time; however, subject to the
foregoing sentence, the Eurodollar Rate will continue to be available
to Borrower.
If Borrower shall make a prepayment or a scheduled payment
of the Loan on September 30 of any year, and the Eurodollar Rate is
then in effect, the applicable Eurodollar Interest Period shall cease
to be in effect as of September 30, and the outstanding principal
balance shall bear interest at the Base Rate until a new Eurodollar
Rate Election is made by Borrower.
2.6. Interest Calculation; Late Charge; Default Rate.
All rates of interest to be applied to the principal of the
Loan shall be calculated on the basis of a 360-day year by multiplying
the outstanding principal amount by the applicable per annum rate,
multiplying the product thereof by the actual number of days elapsed,
and dividing the product so obtained by 360.
Borrower shall pay to Lender a late charge equal to five
percent (5%) of any payment which is not received by Lender within ten
(10) days of the due date therefor in order to cover the additional
expenses incident to the handling and processing of delinquent
payments.
Notwithstanding Section 2.5, above, while an Event of
Default exists, interest shall accrue at the Default Rate.
2.7. Prepayment.
(a) If the Base Rate is in effect, Borrower may prepay the
outstanding principal balance of the Loan, in whole or in part, at any
time and from time to time without premium or penalty.
(b) If the Eurodollar Rate is in effect, Borrower may not prepay
the outstanding principal balance of the Loan, in whole or in part,
unless such prepayment occurs at the expiration of any Eurodollar
Interest Period or on September 30 of any year; provided that if
Lender determines (which determination shall be conclusive) that it is
unable to prepay the deposits or borrowings by which it has funded the
principal amount of the Loan without incurring any loss, charge, cost
or penalty, Borrower shall, at the time of such prepayment, pay to
Lender the amount of any such loss, charge, cost or penalty.
(c) If the Fixed Rate is in effect, Borrower may prepay the
outstanding principal balance of the Loan, in whole or in part, at any
time and from time to time, provided that such prepayment is
accompanied by a premium equal to the applicable percentage of the
amount so prepaid in accordance with the following table:
Prepayment Date Applicable Percentage
October 1, 1995 - September 30, 1996 3%
October 1, 1996 - September 30, 1997 3%
October 1, 1997 - September 30, 1998 2%
October 1, 1998 - September 30, 1999 1%
October 1, 1999 - July 30, 2000 0%
(d) If at any time during the term of the Loan, the Borrower
moves any of the Equipment having an aggregate purchase price in
excess of $50,000 to a location not listed on Schedule 1 to this
Agreement, the Borrower will make a mandatory prepayment of the Loan
in an amount equal to the purchase price of such moved Equipment
within five (5) days of written notice from the Lender requesting such
prepayment. In the event of any such prepayment under this paragraph
(d), no prepayment premium shall be due, notwithstanding paragraph (c)
above.
2.8 Commitment Fee. On the Closing Date and on each September
30 thereafter until the Maturity Date, the Borrower shall pay the
Lender a commitment fee of $10,000 in addition to any other amount due
under this credit agreement.
ARTICLE 3. CONDITIONS PRECEDENT TO MAKING ADVANCES
The obligations of Lender to make any Advance to Borrower shall
be subject to the satisfaction by Borrower of the following conditions
precedent, as of the date of the requested Advance:
There shall exist no Event of Default or Potential Default.
The representations and warranties of Borrower made in this
Agreement or in any certificate executed and delivered pursuant hereto
shall be true and accurate in all material respects.
Borrower shall have performed or observed all agreements,
covenants, and conditions required by Lender to be performed or
observed by Borrower.
Borrower shall have delivered to Lender a copy of the
invoice(s) for such item(s) of Equipment to be purchased with the
proceeds of such Advance, certified by the Borrower as a true and
correct copy of such invoice(s). If such requested Advance is for
reimbursement of Equipment previously purchased, Borrower shall have
delivered to Lender a copy of the receipt(s) evidencing Borrower's
payment for such Equipment, certified by the Borrower as a true and
correct copy of such invoice(s). Such invoices and paid receipts
shall include, without limitation, a general description of the
Equipment purchased or to be purchased, and the serial number(s)
therefor, if applicable.
With respect to the initial Advance, Borrower, the Guarantor
and the Lessee shall have duly executed the Loan Documents applicable
to each together with any and all other documents that Lender or its
legal counsel, in their reasonable discretion, shall deem necessary to
complete the transaction contemplated by this credit agreement.
Each request for an Advance shall constitute Borrower's representation
and warranty that each of the foregoing conditions are satisfied on
the date of such request and will continue to be satisfied on the date
the requested Advance is made.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement and to make
Advances hereunder, Borrower represents and warrants to Lender that:
4.1. Existence, Power and Qualification. The Borrower is a
limited partnership duly organized and validly existing under the laws
of the State of Missouri, having LHC, Inc. ("LHC") as its general
partner. LHC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Missouri. The Borrower
and LHC are duly registered or qualified to conduct business in those
states in which the nature of their business makes such registration
or qualification necessary. The Borrower has the power and authority
and the legal right to own its property and to conduct its business in
the manner in which it is now conducted or hereafter contemplates
conducting its business.
4.2. Authority to Borrow Hereunder. Borrower has the power and
authority and the legal right to make, deliver and perform the Loan
Documents to which it is a party. Borrower has taken all necessary
action on its part to authorize the execution, delivery and
performance of the Loan Documents, and the borrowing contemplated
thereby. No consent or authorization of, or filing with, any federal,
state, county or municipal government, or any department or agency of
any such government, is required of Borrower in connection with the
execution, delivery, performance, validity or enforceability of the
Loan Documents, or the borrowing contemplated hereby.
4.3. Due Execution and Enforceability. The Loan Documents have
been duly executed and delivered on behalf of Borrower, and constitute
the legal, valid and binding obligation of Borrower enforceable
against Borrower in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally, and general principles of equity which
may limit the availability of equitable remedies.
4.4. No Conflict. The execution, delivery and performance of
the Loan Documents, and the consummation of the transactions
contemplated therein, will not (a) conflict with or be in
contravention of any law, regulation, rule, order or judgment
applicable to Borrower or LHC, or their respective Organizational
Documents, or any other agreement, instrument, mortgage, deed of
trust, lien, lease, judgment, decree or order to which Borrower or LHC
is a party or is subject or by which Borrower or LHC or their
respective properties are bound or affected, or (b) result in the
creation of any Lien upon any of the properties of Borrower, other
than the Lien created by the Security Agreement.
4.5. Material Claims. There is no litigation, claim, lawsuit,
investigation, action or other proceeding pending or, to the knowledge
of Borrower, threatened before any court, agency, arbitrator or other
tribunal which individually or in the aggregate might result in any
material adverse change in the financial condition, operations,
businesses or prospects of Borrower or LHC.
4.6. Financial Statements Accurate. All financial statements
heretofore or hereafter provided by the Borrower are and will be true
and complete in all material respects as of their respective dates and
will fairly present the financial condition of the Borrower, and there
are no material liabilities, direct or indirect, fixed or contingent,
as of the dates of such statements which are not reflected therein or
in the notes thereto or in a written certificate delivered with such
statements. The statements of December 31, 1993 have been prepared in
accordance with GAAP. There has been no material adverse change in
the financial condition, operations, or prospects of the Borrower,
since the date of such statements except as fully disclosed in writing
with the delivery of such statements.
4.7. No Defaults or Restrictions. Borrower has not received
notice of a declared default under any agreement or instrument nor
does there exist any restriction in the Organizational Documents of
Borrower that causes or would cause a material adverse effect on the
business, properties, operations or condition, financial or otherwise,
of Borrower.
4.8. Payment of Taxes. Borrower has filed all federal, state,
and local tax returns which are required to be filed and has paid, or
made adequate provision for the payment of, all material taxes which
have or may become due pursuant to said returns or to assessments
received by Borrower.
4.9. Necessary Permits, Etc. Borrower possesses all franchises,
trademarks, permits, licenses, consents, agreements and governmental
approvals that are necessary or required by any authority to carry on
its business as now conducted. Borrower has received no notice of
default or termination of any material agreement or any notice of
noncompliance with any law, rule or regulation by which it is bound,
which would cause a material adverse effect upon the business,
properties, operations or condition, financial or otherwise, of
Borrower.
4.10. Disclosure. Neither this Agreement nor any other
document, financial statement, credit information, certificate or
statement required herein to be furnished to Lender by Borrower in
connection with this Agreement contains any untrue, incorrect or
misleading statement of material fact, and all of these documents
taken as a whole do not omit to state a fact material to this
Agreement, to Lender's decision to enter into this Agreement or to the
transactions contemplated hereunder. All representations and
warranties made herein or any certificate or other document delivered
to Lender by or on behalf of Borrower, pursuant to or in connection
with this Agreement, shall be deemed to have been relied upon by
Lender notwithstanding any investigation heretofore or hereafter made
by Lender or on its behalf, and shall survive the making of Advances
as contemplated hereby.
ARTICLE 5. AFFIRMATIVE COVENANTS
Borrower agrees and covenants that until the Loan has been paid
in full, Borrower shall comply with each of the following affirmative
covenants:
5.1. Payment of Loan. Borrower will duly and punctually pay the
principal and interest of the Loan in accordance with the terms of
this Agreement and the Note. If at any time the outstanding principal
balance of the Loan exceeds the amount permitted by Section 2.1
hereof, Borrower shall pay to Lender an amount which will reduce the
outstanding principal balance of the Loan to the permitted amount or
below.
5.2. Maintenance of Existence. Borrower will maintain its
existence and, in each jurisdiction in which the character of the
properties owned by it or in which the transaction of its business
makes qualification necessary, maintain such qualification and good
standing.
5.3. Compliance with Laws; Payment of Claims. Borrower will
comply in all material respects with all applicable laws, rules,
regulations and orders such compliance to include without limitation,
compliance with ERISA; paying before the same become delinquent all
taxes, assessments and governmental charges or levies imposed upon
Borrower or upon its income or profits or upon any of their
properties; and paying all lawful claims, which if unpaid, might
become a Lien upon any of its properties, except to the extent
contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the
nonperformance or nonpayment thereof and with respect to which
adequate reserves have been set aside for payment thereof.
5.4. Accrual and Payment of Taxes. Borrower will accrue all
current tax liabilities of all kinds, all required withholdings of
income taxes of employees, all required old age and unemployment
contributions, and pay the same when they become due, unless
appropriate extensions are obtained.
5.5. Other Indebtedness. Borrower will duly and punctually pay
or cause to be paid all principal and interest of any material
indebtedness of Borrower to other creditors, comply with and perform
all conditions, terms and obligations of the notes or other
instruments evidencing such indebtedness and the mortgages, deeds of
trust, security agreements and other instruments evidencing security
for such indebtedness.
5.6. Examination and Visitation By Lender. At any reasonable
time and from time to time during normal business hours, Borrower will
permit Lender or its representatives to examine and make copies and
abstracts from the records and books of account of, and visit the
properties of, Borrower and to discuss the affairs, finances and
accounts of Borrower with any of its officers or employees.
5.7. Accounting Records. Borrower will keep adequate records and
books of account, with complete entries reflecting all of its
financial transactions.
5.8. Maintenance of Permits, Etc. Borrower will obtain,
maintain and preserve all permits, licenses, authorizations,
approvals, certificates and accreditation which are necessary for the
proper conduct of its business.
5.9. Conduct Business. Borrower will conduct its business as now
conducted and do all things necessary to preserve, renew and keep in
full force and effect its licenses, rights and franchises necessary to
continue such businesses.
5.10. Correction of Defect, Etc. On request of Lender, Borrower
will promptly correct any scrivener's error which may be discovered in
the contents of the Loan Documents, or in the execution thereof, and
execute and deliver such further instruments and do such further acts
as may be necessary or as may be requested by Lender to carry out more
effectively the purposes of this Agreement.
5.11. Quarterly Reporting Requirements. Borrower will furnish to
Lender as soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter of Borrower, the balance
sheet of Borrower as at the end of such quarter and statements of
income and retained earnings of Borrower, certified by the treasurer
or chief financial officer of the Borrower as true and correct, and
otherwise in form and substance satisfactory to Lender, and consistent
with those quarterly statements previously provided to Lender. In
addition, Borrower will furnish the Compliance Certificate within said
forty-five (45) day period.
5.12. Annual Audited Reporting Requirements. For the fiscal year
ending December 31, 1994 and for each fiscal year thereafter, Borrower
shall provide Lender, as soon as available and in any event within
ninety (90) days after the end of each fiscal year of Borrower, the
balance sheets, statements of income and retained earnings, and a
statement of cash flow of Borrower for such year, all of which such
financial statements shall be audited and certified by independent
certified public accountants selected from among the so called
national Big 6 accounting firms as (i) fairly presenting the financial
condition of Borrower as at the end of such fiscal year and the
results of the operations of Borrower for such period and (ii) having
been prepared in accordance with GAAP.
5.13. Employee Plan Reports and Notices. Borrower will, upon
request, promptly furnish to Lender after the filing or receipt
thereof, copies of all reports and notices, if any, which Borrower
files under the Internal Revenue Code or ERISA with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor, or which Borrower receives from any such agency,
with respect to any Employee Plan, if any of the information therein
could form the basis of, or any dispute referred to therein which, if
determined adversely to Borrower, could constitute or give rise to an
Event of Default or Potential Default.
5.14. Maintenance of Equipment. Borrower will keep the
Equipment in good repair, working order, and condition, reasonable
wear and tear excepted.
5.15 Location of Equipment. Borrower will maintain the Equipment
at the locations listed in Schedule 1 to this Agreement and shall not
transfer or otherwise relocate the Equipment to another location
without thirty (30) days' prior written notice to Lender.
5.16 Use of Proceeds. Borrower shall use the proceeds of the
Loan to purchase the Equipment and for no other purpose.
5.17. Financial Covenants. Borrower shall:
Maintain a Fixed Charge Coverage at the end of each quarter
of not less than 1.0 to 1.0. Provided, however, if the Fixed Charge
Coverage is less than 1.0 to 1.0 at the end of any fiscal quarter, an
additional calculation shall be made including the amount of the
Borrower's cash on hand and United States Government securities,
valued at the lower of cost or market, in the numerator of the ratio
in determining Fixed Charge Coverage for such fiscal quarter and, if
such additional calculation results in a ratio of not less than 1.0 to
1.0, the Borrower shall not be deemed in violation of this Section
5.17(a).
Maintain a Net Worth during each fiscal year of at least
$9,000,000.
ARTICLE 6. NEGATIVE COVENANTS
Borrower agrees and covenants that until the Loan has been paid
in full, Borrower shall abide by and observe the following negative
covenants:
6.1. Merger, Consolidation, Etc. Borrower will not enter into
any merger, consolidation or similar transaction, without prior
written notice to Lender.
6.2. Sale or Disposition of Substantially All Assets. Borrower
will not sell, assign, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all
of its assets (whether now or hereafter acquired), except for leases
pursuant to the Lease and except for similar transactions, without
prior written notice to Lender.
6.3. Other Disposition of Assets. Except as provided for in
Section 6.5 below, Borrower will not sell, lease, transfer or
otherwise dispose of assets, unless any such disposition shall be in
the ordinary course of business for a full and fair consideration,
which in no event shall include a transfer for full or partial
satisfaction of a pre-existing debt without prior written notice to
Lender.
6.4. ERISA Funding and Termination. Borrower will not permit
(a) the funding requirements of ERISA with respect to any Employee
Plan ever to be less than the minimum required by ERISA or (b) any
Employee Plan ever to be subject to involuntary termination
proceedings.
6.5. Transactions with Affiliates. Borrower will not, without
the prior written consent of Lender which will not be unreasonably
withheld or delayed, enter into any transaction with any Person
affiliated with Borrower other than in the ordinary course of
Borrower's business and on fair and reasonable terms.
6.6. Change in Business. Borrower will not make any material
change in the nature of its business as conducted on the date hereof.
6.7. Liens on Equipment. Borrower will not permit any Lien to
exist on the Equipment, except pursuant to the Security Agreement and
except Liens incidental to the conduct of its business or the
ownership of its property and created by operation of law.
ARTICLE 7. EVENTS OF DEFAULT AND REMEDIES
7.1. Events of Default. The occurrence of any one or more of
the following events shall constitute an Event of Default hereunder:
Any failure to pay any principal, interest, or any other sum
payable under this Agreement or the Note, when and as the same shall
become due and payable, whether on demand, at their stated maturities,
by acceleration or otherwise (a "Monetary Default"), and such failure
shall continue for a period of five (5) days after the due date of
such payment.
Any representation or warranty made by or on behalf of
Borrower, under or in connection with this Agreement shall be
materially false as of the date on which made.
Borrower shall fail to perform or observe any term, covenant
or agreement (other than a Monetary Default) contained in any Loan
Document to be performed or observed by Borrower, and such failure
shall remain unremedied for thirty (30) days after written notice
thereof shall have been given to Borrower by Lender unless such
failure is incapable of being remedied within such thirty (30) day
period and during such thirty (30) day period Borrower has commenced
and is diligently pursuing appropriate corrective action.
Borrower, Lessee or Guarantor shall be generally not paying
their debts as they become due or shall make a general assignment for
the benefit of creditors; or any petition shall be filed by or against
such Persons under the federal bankruptcy laws, or any other
proceeding shall be instituted by or against such Persons seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation,
reorganization, arrangement, adjustment or composition of its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar
official for such Persons or any substantial part of its property
(provided, that as to any involuntary proceeding, such shall not
constitute an Event of Default unless the same is not dismissed or
vacated within sixty (60) days of the date of such filing); or such
Persons shall take any action to authorize or effect any of the
transactions set forth above in this Section 7.1(d).
(e) Failure of the Borrower, Lessee or Guarantor to pay when due
any indebtedness owing to another creditor or the default by such
Persons, in the performance of any term, provision or condition
contained in the agreement under which any such indebtedness was
created or is governed, the effect of which is to cause, or to permit
the holder or holders of such indebtedness, upon the giving of notice
or lapse of time, or both, to cause such indebtedness to become due
prior to its stated maturity.
(f) Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of all or
any substantial portion of the property of Borrower, which will have a
material adverse effect on the financial condition of the Borrower.
(g) The Borrower shall fail within sixty (60) days to pay, bond,
or otherwise discharge any judgment or order for the payment of money
which is not stayed on appeal or while otherwise being appropriately
contested in good faith, or for which the Borrower is not fully
insured.
(h) A material adverse change in the financial condition of the
Lessee or the Guarantor. For the purposes of this Section 7.1(h), a
material adverse change in the financial condition of the Lessee or
the Guarantor shall have occurred if the partnership capital (the sum
of the limited partnership interests and the general partnership
interest as shown on a statement of financial condition) of Guarantor
or of Lessee falls below $110,000,000; and a material adverse change
in the financial condition of the Lessee shall have occurred if it
fails to maintain net capital (as defined in paragraph (c) of Rule 15
c 3-1 of the Securities and Exchange Commission promulgated under the
Securities Exchange Act of 1934) in an amount equal to 150% of the
amount of such net capital required for expansion of a member
organization's business pursuant to Rule 326(a) of the Rules of the
Board of Directors of the New York Stock Exchange.
(i) Any transfer of any portion of the Collateral, as defined in
the Security Agreement, or any interest therein or any further
encumbrance of the Collateral, other than as permitted by Section 5.15
of this credit agreement.
(j) A default under the terms of any other agreement, document,
or instrument between Borrower and Lender not cured within any
applicable cure period.
(k) A default under the terms of the Lease after the expiration
of any applicable cure periods.
(l) Lessee shall fail to perform or observe any term, covenant
or agreement made by it in the Estoppel Agreement and such failure
shall remain unremedied for thirty (30) days after written notice
thereof shall have been given to Lessee and Borrower by Lender unless
such failure is incapable of being remedied within such thirty (30)
day period and during such thirty (30) day period Lessee has commenced
and is diligently pursuing appropriate corrective action.
7.2. Remedies. If any Event of Default occurs, Lender may, at
its option:
By written notice to Borrower, terminate the Commitment
Period, and thereby terminate its obligation to make further Advances
hereunder.
(b) Declare the entire unpaid principal of the Loan, together
with the interest accrued thereon, to be, and the same shall thereupon
become, immediately due and payable, without presentment, protest or
further demand or notice of any kind, all of which are hereby
expressly waived.
(c) Proceed to protect and enforce its rights by action at law
(including, without limitation, bringing suit to reduce any claim to
judgment), suit in equity and other appropriate proceedings including,
without limitation, for specific performance of any covenant or
condition contained in this Agreement.
(d) Exercise any and all rights and remedies afforded by the
laws of the United States, the State of Alabama or any other
appropriate jurisdiction as may be available for the collection of
debts and enforcement of covenants and conditions such as those
contained in this Agreement and in the other Loan Documents.
(e) Exercise the rights and remedies of setoff and/or banker's
lien against the interest of Borrower in and to every account and
other property of Borrower which is in the possession of Lender or any
Person which then owns a participating interest in the Loan, to the
extent of the full amount of the Loan.
ARTICLE 8. GENERAL PROVISIONS
8.1. Notices. All notices and other communications provided for
hereunder shall be in writing and, if mailed by certified mail, return
receipt requested, shall be deemed to have been received on the
earlier of the date shown on the receipt or five (5) days after the
postmarked date thereof, and, if sent by overnight courier, shall be
deemed to have been received on the next business day following
dispatch. In addition, notices hereunder may be delivered by hand, in
which event such notice shall be deemed effective when delivered.
Notice of change of address shall also be governed by this Section.
Notices shall be addressed as follows:
To Borrower:
EDJ Leasing Co., L.P.
201 Progress Parkway
St. Louis, Missouri 63043-3042
Attention: Steven Novik
Facsimile: (314) 576-5960
To Lender:
SouthTrust Bank of Alabama,
National Association
SouthTrust Tower--11th Floor
420 North 20th Street (35203)
Post Office Box 2554
Birmingham, Alabama 35290
Attention: Regional Corporate Banking
Facsimile: (205) 254-5022
8.2. No Control By Lender. None of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to,
give Lender the rights or power to exercise control over the affairs
and/or management of Borrower, the power of Lender being limited to
the right to exercise the remedies provided for herein.
8.3. No Waiver By Lender, Etc. The acceptance by Lender at any
time and from time to time of partial payment on the Loan shall not be
deemed to be a waiver of any Event of Default then existing. No
waiver by Lender of any particular Event of Default shall be deemed to
be a waiver of any Event of Default other than said particular Event
of Default. No delay or omission by Lender in exercising any right or
remedy under the Loan Documents or otherwise shall impair such right
or remedy or be construed as a waiver thereof or an acquiescence
therein, nor shall any single or partial exercise of any such right or
remedy preclude other or further exercise thereof, or the exercise of
any other right or remedy under the Loan Documents or otherwise. The
rights and remedies of Lender in this Agreement are cumulative and are
in addition to, and are not exclusive of, any rights or remedies
provided by law. The rights of Lender under this Agreement against
Borrower are not conditional or contingent on any attempt by Lender to
exercise any of its rights under the Loan Documents, or against
Borrower or any other Person.
8.4. Lender's Expenses. Whether or not the principal of the
Loan is advanced hereunder or the transactions contemplated hereby are
consummated, Borrower will pay on demand all fees, costs and expenses
in connection with the preparation, execution, and delivery of the
Loan Documents and the other documents to be delivered under this
Agreement, including, without limitation, the fees, out-of-pocket
expenses and other disbursements of its counsel. Borrower shall pay
on demand all costs and expenses (including, without limitation,
attorneys' fees, accountants' fees and expenses), if any, of Lender in
connection with the enforcement, collection, restructuring,
refinancing and "work-out" (including with respect to any waiver or
amendment) of this Agreement and the Loan Documents. Borrower will
save Lender harmless from and against any and all claims, damages,
actions, costs, expenses and liabilities with respect to or resulting
from any breach by Borrower of any of the covenants under this
Agreement or any misrepresentation or breach of warranty by Borrower
under this Agreement, or in connection with the performance by Lender
of the provisions of this Agreement to be performed by Borrower. All
sums payable to Lender by Borrower under the provisions of this
Section 8.4 shall bear interest at the Default Rate, which interest
shall be payable by Borrower to Lender on demand.
8.5. GAAP. All accounting and financial terms used herein, and
compliance with each covenant contained herein, which relates to
financial matters, shall be determined in accordance with GAAP, except
to the extent that a deviation therefrom is expressly stated herein.
8.6. Number and Gender. Whenever herein the singular number is
used, the same shall include the plural where appropriate, and words
of any gender shall include each other gender where appropriate.
8.7. Headings. The headings, captions and arrangements used in
this Agreement are, unless specified otherwise, for convenience only
and shall not be deemed to limit, amplify or modify the terms of this
Agreement, nor affect the meaning thereof.
8.8. Place, Manner, Time and Extension of Payment. All sums
payable under the Loan Documents shall be paid to Lender at its
principal office in Birmingham, Alabama, not later than 2:00 P.M.,
Birmingham, Alabama time on the date due in immediately available
funds. Upon Borrower's request, payments may be made by debiting any
account maintained by Borrower with Lender, or in any other
commercially reasonable manner acceptable to Lender. If any payment
falls due on a day which is not a Business Day, then such due date
shall be extended to the next succeeding Business Day, but during any
such extension all unpaid principal of the Loan and other sums bearing
interest shall continue to bear interest at the rates herein provided.
8.9. Survival of Covenants, Etc. All covenants, agreements,
representations and warranties made herein shall survive the execution
and delivery of this Agreement and the Loan Documents. All statements
contained in any certificate or other instrument delivered by or on
behalf of Borrower shall be deemed to constitute representations and
warranties made by Borrower.
8.10. Successors and Assigns; Participation. All covenants and
agreements contained in this Agreement shall bind and inure to the
benefit of the respective successors and assigns of the parties
hereto, except that Borrower may not assign any rights hereunder
without the prior written consent of Lender. Lender may assign to one
or more Persons all or any part of, or may grant participations to one
or more Persons, in all or any part of the Loan, and to the extent of
any assignment or participation the assignee or participant of such
assignment or participation shall have the rights and benefits
hereunder as if it were a Lender hereunder, except that Borrower shall
be entitled to deal exclusively with Lender and rely upon documents,
consents and writings signed solely by Lender, without the necessity
of any such participant joining in. Borrower authorizes Lender to
disclose to any purchaser or participant, or any prospective purchaser
or participant of an interest in the Loan, any financial or other
information pertaining to Borrower. Notwithstanding the foregoing,
Lender shall give Borrower ten (10) days' prior written notice of its
intention to assign or grant a participation in the Loan, or any part
thereof, to any Person which is not owned, directly or indirectly, by
SouthTrust Corporation, the parent corporation of Lender.
8.11. Severability of Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under
present or future laws during the term hereof, such provision shall be
fully severable, and this Agreement, as the case may be, shall be
construed and enforced as if such illegal, invalid or unenforceable
provisions had never comprised a part hereof, and the remaining
provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. Furthermore, in lieu of such
illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Agreement, a provision as similar in
terms to the illegal, invalid or unenforceable provision as may be
possible which is legal, valid and enforceable.
8.12. Lender's Agreements. Lender agrees to execute
intercreditor agreements, estoppel certificates, disclaimers, UCC Form
3's, and similar documents in form and substance reasonably
satisfactory to Lender in connection with other financing by Borrower
as requested by Borrower from time to time.
8.13. Entire Agreement, Amendments, Counterparts. This
Agreement and the Loan Documents embody the entire agreement and
understanding between Borrower and Lender relating to the subject
matter hereof. The provisions of this Agreement may not be amended,
modified or waived except by written agreement of Borrower and Lender.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.
8.14. Governing Law; Jurisdiction. THE LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF ALABAMA. LENDER'S PRINCIPAL PLACE OF BUSINESS IS LOCATED IN
JEFFERSON COUNTY, ALABAMA, AND BORROWER AGREES THAT THE LOAN DOCUMENTS
SHALL BE DELIVERED TO, HELD BY AND FUNDED BY LENDER AT SUCH PRINCIPAL
PLACE OF BUSINESS, AND THE HOLDING OF THE LOAN DOCUMENTS THEREAT SHALL
CONSTITUTE SUFFICIENT MINIMUM CONTACTS OF BORROWER WITH JEFFERSON
COUNTY, ALABAMA FOR PURPOSES OF CONFERRING JURISDICTION UPON THE STATE
AND FEDERAL COURTS PRESIDING IN SUCH COUNTY AND STATE. BORROWER
AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING HEREUNDER MAY BE
BROUGHT IN THE CIRCUIT COURT OF THE STATE OF ALABAMA, IN JEFFERSON
COUNTY, ALABAMA, OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ALABAMA, AND CONSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY SUCH COURTS IN ANY ACTION OR PROCEEDING.
8.15. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL
BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF
ACTION (I) ARISING OUT OF OR IN ANY WAY PERTAINING OR RELATING TO THE
LOAN DOCUMENTS OR THE INDEBTEDNESS EVIDENCED THEREBY, OR (II) IN ANY
WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY
DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THE LOAN DOCUMENTS, OR
THE INDEBTEDNESS EVIDENCED THEREBY OR IN CONNECTION WITH THE
TRANSACTIONS RELATED THERETO OR CONTEMPLATED THEREBY OR THE EXERCISE
OF ANY PARTY'S RIGHTS AND REMEDIES THEREUNDER, IN ALL OF THE FOREGOING
CASES WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE. BORROWER AGREES THAT LENDER MAY FILE
A COPY OF THIS WAIVER WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF BORROWER IRREVOCABLY TO
WAIVE ITS RIGHT TO TRIAL BY JURY, AND THAT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN BORROWER
AND LENDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, Borrower and Lender have caused this
Agreement to be duly executed by their duly authorized partners and
officers as of the day and year first above written.
EDJ LEASING CO., L.P., a Missouri
limited partnership
By: LHC, Inc., a Missouri corporation
Its General Partner
By:
Its
SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION, a national banking
association
By:
James M. Sloan, Jr.
Its Vice President
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in
said State, hereby certify that Steven Novik, whose name as
of LHC, Inc., a Missouri corporation, as general partner of EDJ
Leasing Co., L.P., a Missouri limited partnership, is signed to the
foregoing instrument, and who is known to me, acknowledged before me
on this day that, being informed of the contents of the instrument,
he, as such officer, and with full authority, executed the same
voluntarily for and as the act of said corporation in its capacity as
aforesaid.
Given under my hand and seal of office this 26th day of October,
1994.
Notary Public
[NOTARIAL SEAL]
My commission expires:
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in
said State, hereby certify that James M. Sloan, Jr., whose name as
Vice President of SouthTrust Bank of Alabama, National Association, a
national banking association, is signed to the foregoing instrument,
and who is known to me, acknowledged before me on this day that, being
informed of the contents of the instrument, he, as such officer, and
with full authority, executed the same voluntarily for and as the act
of said banking association.
Given under my hand and seal of office this 26th day of October,
1994.
Notary Public
[NOTARIAL SEAL]
My commission expires:
EXHIBIT A
[FORM OF ADVANCE REQUEST]
Date:
SouthTrust Bank of Alabama,
National Association
P.O. Box 2554
Birmingham, Alabama 35290
Attention: Regional Corporate Banking
RE: Credit Agreement among EDJ Leasing Co., L.P. ("Borrower")
and SouthTrust Bank of Alabama, National Association
("Lender") dated
, 1994 (the "Credit Agreement")
Ladies and Gentlemen:
Pursuant to Section 2.3 of the above-referenced Credit
Agreement, the Borrower hereby requests an Advance on the Loan in the
principal amount of $ (Note: Advances must be in
increments of $100,000.).
Such Advance should be disbursed on
[date], and should be deposited into the Borrower's account maintained
with Lender: [account number].
Attached hereto are invoices, and in the case of Equipment
for which reimbursement is requested, copies of paid receipts, which
the Borrower certifies are true and correct.
The Borrower further certifies that as of the date hereof,
no Potential Default or Event of Default exists, and that each of the
representations and warranties contained in the Credit Agreement is
true and correct as if made on the date hereof.
Capitalized terms used herein without definition shall have
the meanings ascribed to such terms in the Credit Agreement.
EDJ LEASING CO., L.P., a Missouri
limited partnership
By: LHC, Inc., a Missouri corporation
Its General Partner
By:
Its
EXHIBIT B
COMPLIANCE CERTIFICATE
Date:
SouthTrust Bank of Alabama,
National Association
P.O. Box 2554
Birmingham, Al 35290
Attn: Regional Corporate Banking
RE: Credit Agreement among EDJ Leasing Co., L.P. ("Borrower")
and SouthTrust Bank of Alabama, National Association
("Lender") dated
, 1994 (the "Credit Agreement")
Ladies and Gentlemen:
The undersigned general partner of the above named Borrower does
hereby certify that for the quarterly financial period ending
________________________:
No Default or Event of Default has occurred or exists except
.
The Fixed Charge Coverage was:
Required: 1.0 to 1.0
Actual: to 1.0
Amount of Cash on hand: $_____________
Amount of U.S. Government Securities, at lower of cost or market:
$_________
Actual including cash on hand and U. S. Government Securities in
numerator of calculation: ________ to 1.0.
The manner of calculation is attached.
Net Worth as of the end of such quarter were:
Required: $9,000,000
Actual: $
All representations and warranties contained in the Loan
Agreement and other Loan Documents are true and correct in all
material respects as though given on the date hereof, except
.
All information provided herein is true and correct.
Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Credit Agreement.
EDJ LEASING CO., L.P., a Missouri
limited partnership
By: LHC, Inc., a Missouri corporation
Its General Partner
By:
Its
SCHEDULE 1
LOCATIONS:
201 Progress Parkway Maryland Heights, MO 63043
158 Progress Parkway Maryland Heights, MO 63043
141 Progress Parkway Maryland Heights, MO 63043
140 Progress Parkway Maryland Heights, MO 63043
135 Progress Parkway Maryland Heights, MO 63043
115 Progress Parkway Maryland Heights, MO 63043
100 Progress Parkway Maryland Heights, MO 63043
93 Progress Parkway Maryland Heights, MO 63043
97 Progress Parkway Maryland Heights, MO 63043
20 American Industrial Maryland Heights, MO 63043
9 American Industrial Maryland Heights, MO 63043
37 Kimler Maryland Heights, MO 63043
41 Kimler Maryland Heights, MO 63043
5 American Industrial Maryland Heights, MO 63043
120 Progress Parkway Maryland Heights, MO 63043
44 Kimler Maryland Heights, MO 63043
75 Worthington Maryland Heights, MO 63043
145 Weldon Parkway Maryland Heights, MO 63043
2303 Chaffee Road Maryland Heights, MO 63043
12255 Manchester Road
Des Peres, MO63131-3729
Exhibit 10.34
MASTER LEASE
Master Lease Number: 1
THIS MASTER LEASE is made as of October 26, 1994, by and
between EDJ LEASING CO., L.P., a Missouri limited partnership,
201 Progress Parkway, Maryland Heights, Missouri 63043 ("Lessor")
and EDWARD D. JONES & CO., L.P., a Missouri limited partnership,
201 Progress Parkway, Maryland Heights, Missouri 63043
("Lessee").
WHEREAS, Lessor desires to lease to Lessee, and Lessee
desires to lease from Lessor, such equipment pursuant to the
provisions hereof and applicable lease schedules ("Lease
Schedules") which shall be executed by the parties from time to
time in the form attached hereto as Exhibit A, and which shall be
made a part hereof.
NOW, THEREFORE, in consideration of the premises, the
parties, intending to be legally bound, agree as follows:
1. Lease. Lessor hereby agrees to lease to Lessee, and
Lessee hereby agrees to lease from Lessor, the equipment
("Equipment") described in Lease Schedules which shall be
executed between the parties from time to time, and which shall
be attached to and become a part of this Master Lease. The
provisions of this Master Lease and the Lease Schedules shall
constitute the entire agreement between the parties with regard
to the subject matter hereof and shall supersede all prior
negotiations, agreements, and understandings, whether oral or
written, unless specifically incorporated by reference. The
lease of Equipment described in each particular Lease Schedule
shall be considered a separate Lease pursuant to the terms of the
Master Lease and each Lease Schedule the same as if a single
lease containing such terms had been executed covering such
items; except that, any provision of any Lease Schedule shall
supersede any conflicting provision of this Master Lease.
2. Term. The term of the lease with respect to the
Equipment listed on a Lease Schedule shall begin on the date such
Equipment is accepted by Lessee and shall continue for the number
of consecutive months from the "Rent Commencement Date" shown in
the related Lease Schedule (the "Initial Term") unless earlier
terminated as provided herein Any advance rentals shall not be
refundable if this Master Lease with respect to any or all Lease
Schedules is duly terminated by Lessor.
3. Rent. Lessee shall pay as rent for the initial
term of this Master Lease as to each Lease Schedule, the amount
reflected in each Lease Schedule as Base Rent. Base Rent
installments shall be payable monthly in arrears, the first such
payment being due on the Rent Commencement Date, or such later
date as Lessor designates in writing, and subsequent payments due
on the same day of each successive month thereafter during the
term hereof.
(a) Taxes. As additional rent, Lessee shall pay
all sales, use, excise, personal property, stamp, documentary and
ad valorem taxes, license and registration fees, assessments,
fines, penalties and similar charges imposed on the ownership,
possession or use of the Equipment during the term of this Master
Lease as to any Lease Schedule as and when due , and shall pay
all taxes (except Lessor's Federal or State net income taxes)
imposed on Lessor or Lessee with respect to the rental payments
hereunder. Lessee shall reimburse Lessor upon demand for all
taxes paid by or advanced by Lessor. Lessee shall file all
returns required therefor and furnish copies to Lessor.
(b) Increases in rent. Base Rent reflected in all
Lease Schedules shall increase or decrease at the same time and
at the same rate as changes in the Base Index Rate as described
in the applicable Lease Schedule.
(c) Net Lease. This Master Lease is a net lease and
all payments of Base Rent and additional rent hereunder are net
to Lessor.
4. Disclaimer of Warranties and Waiver of Defenses.
(a) No Warranties by Lessor. LESSOR, BEING NEITHER
THE MANUFACTURER, NOR SUPPLIER, NOR A DEALER IN THE EQUIPMENT,
MAKES NO WARRANTY AND HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR
IMPLIED, TO ANYONE, AS TO THE FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, DESIGN, CONDITION, CAPACITY, PERFORMANCE OR ANY
OTHER ASPECT OF THE EQUIPMENT OR ITS MATERIAL OR WORKMANSHIP.
Lessor further disclaims any liability for loss, damages, or
injury to Lessee or third parties as a result of any defects,
latent or otherwise, in the Equipment whether arising from
Lessor's negligence or application of the laws of strict
liability. As to Lessor, Lessee leases the Equipment "as is."
Lessee has selected the supplier of the Equipment and
acknowledges that Lessor has not recommended the supplier.
Lessor shall have no obligation to install, maintain, erect,
test, adjust, or service the Equipment. Lessee agrees to
install, maintain, and service the Equipment or cause the same to
be performed by qualified third parties. If the Equipment is
unsatisfactory for any reason, Lessee shall make claim on account
thereof solely against the supplier, and any of the supplier's
vendors, and shall nevertheless pay Lessor all rent payable under
the Lease.
(b) Assignment for Breach of Warranty. Lessor
hereby assigns to Lessee, solely for the purpose of prosecuting
such a claim, all of the rights which Lessor may have against any
supplier and any of the suppliers' vendors for breach of warranty
or other representations respecting the Equipment.
(c) Lessor's Assignment, Waiver of Defenses.
Lessee acknowledges Lessor's intent to assign or pledge this
Master Lease and/or the rentals due hereunder and Lessee agrees
that no assignee or pledgee of Lessor shall be bound to perform
any duty, covenant or condition, or warranty (express or implied)
attributable to Lessor and Lessee further agrees not to raise any
claim or defense arising out of this Master Lease or otherwise
against Lessor as a defense, counterclaim, or offset to any
action by any assignee or pledgee for the unpaid balance of
rentals due under the Master Lease or for possession of the
Equipment.
(d) Waiver of Indirect Damages. Regardless of
cause, Lessee shall not assert and Lessor shall not be
responsible for any claim whatsoever against Lessor for loss of
anticipatory profits or any other indirect, special, punitive or
consequential damages, nor shall Lessor be responsible for any
damages or costs which may be assessed against Lessee in any
action for infringement of any intellectual property rights of
third parties. Lessor makes no warranty as to the treatment of
this Master Lease, for tax or accounting purposes.
(e) Agency Disclaimer. Notwithstanding any fees
that may be paid by Lessor to a supplier or any agent of a
supplier, Lessee acknowledges that no supplier or any agent of a
supplier is or shall be deemed an agent of Lessor or is
authorized to waive or alter any term or condition of this Master
Lease.
5. Noncancellable Lease. NEITHER THIS MASTER LEASE
NOR ANY LEASE SCHEDULE CAN BE CANCELLED BY LESSEE DURING THE TERM
PROVIDED IN THIS MASTER LEASE. LESSEE'S OBLIGATION TO PAY BASE
RENT AND ADDITIONAL RENT ARE ABSOLUTE.
6. Title, Personal Property. The Equipment is, and
shall at all times remain, Lessor's property, and Lessee shall
have no right, title, or interest therein, except as herein set
forth. If Lessor supplies Lessee with labels indicating that the
Equipment is owned by Lessor, Lessee shall affix such labels to
and keep them in a prominent place on the Equipment. Lessee
shall at its expense protect and defend Lessor's title against
all persons claiming against or through Lessee, at all times
keeping the Equipment free from any legal process or encumbrance
whatsoever including but not limited to liens, attachments,
levies and executions, and shall give Lessor immediate written
notice thereof and shall indemnify Lessor from any loss caused
thereby. Lessee shall execute and deliver to Lessor, upon
Lessor's request, such further instruments and assurances as
Lessor deems necessary or advisable for the confirmation or
perfection of Lessor's rights hereunder.
The Equipment is, and shall at all times be and remain,
personal property notwithstanding that the Equipment or any part
thereof may now be, or hereafter become, in any manner affixed or
attached to real property or any improvements thereon.
7. Care, Use and Location. Lessee, at its own cost
and expense, shall maintain and keep the Equipment in good
repair, condition and working order, and shall use the Equipment
lawfully. At all times during the term of any Lease Schedule
or extensions thereof, upon forty (40) days advance written
notice, the Equipment shall be located at any one or more of the
locations listed on Exhibit B attached hereto; provided, however,
Lessee shall have the right, at any time and from time to time,
to move any item of Equipment to any of Lessee's various
locations. Lessor shall have the right to inspect the Equipment
where it is located at any reasonable time.
8. Redelivery. Upon expiration or earlier
termination of this Master Lease as to any Lease Schedule, Lessee
shall return the Equipment listed in that Lease Schedule, freight
prepaid, to Lessor in good repair, condition, and working order,
ordinary wear and tear resulting from proper use thereof only
excepted, in a manner and to a location reasonably designated by
Lessor. If, upon expiration or termination of this Master Lease
as to any Lease Schedule the Lessee does not immediately return
the Equipment listed in that Lease Schedule to the Lessor, it
shall continue to be held and leased hereunder, and this Master
Lease shall thereupon be extended indefinitely as to term at the
same monthly rental provided in that Lease Schedule, subject to
the right of either party to terminate the Master Lease as to
that Lease Schedule upon 90 days' written notice, whereupon the
Lessee shall forthwith deliver the Equipment to the Lessor as set
forth in this paragraph.
9. Option to Purchase. At the expiration of the term
set forth in each applicable Lease Schedule, notwithstanding the
Redelivery provision set forth in paragraph 8 hereof, Lessor
hereby grants to Lessee the option to purchase all, but not less
than all, Equipment listed on such Lease Schedule. To exercise
such option as to Equipment listed in an applicable Lease
Schedule, Lessee, at least thirty (30) days prior to the
expiration of this Master Lease in respect of such Lease
Schedule, shall advise Lessor in writing of its intent to
purchase all, but not less than all, of the Equipment listed
therein. Lessee shall pay, as the purchase price for such
Equipment ("Purchase Price"), cash in an amount equal to the then
fair market value of the Equipment, which value Lessor and Lessee
agree will not be less than the Minimum Option Percentage times
the Acquisition Value, nor more than the Maximum Option
Percentage time the Acquisition Value, as such terms are defined
in the applicable Lease Schedule and the products of which are
reflected as the Minimum Option Value and Maximum Value on the
applicable Lease Schedule. Fair market value shall be determined
by Lessor in good faith. In the event Lessee does not agree with
the Lessor's calculation of fair market value, Lessee may,
within five (5) days of Lessor's determination, request, in
writing, that the fair market value be determined as Lessee's
cost by a qualified independent appraiser who is not the
manufacturer of the Equipment and is chosen by Lessee. The
decision of the appraiser shall be binding on both parties;
provided, however, Lessee shall not be required to pay greater
than the Maximum Option Value nor permitted to pay less than the
Minimum Option Value.
Such purchase shall be closed within thirty (30) days of the
date of final determination of the Equipment's fair market value
at Lessor's office or as otherwise agreed by the parties. At
closing, Lessee shall pay, in cash, the Purchase Price, any
sales, use or other taxes payable in respect of such purchase and
all accrued and unpaid Base Rent or additional rent. Upon such
payment, the Equipment listed in the applied Lease Schedule shall
be deemed transferred to Lessee at its then location.
10. Risk of Loss. Lessee shall bear all risks of loss of
and damage to the Equipment from any cause; occurrence of such
loss or damage shall not relieve Lessee of any obligation
hereunder. In the event of loss or damage, Lessee, at Lessor's
option, shall: (a) place the damaged Equipment in good repair,
condition and working order; or (b) replace lost or damaged
Equipment with like Equipment in good repair, condition and
working order with documentation creating clear title thereto in
Lessor; or (c) pay to Lessor the then unpaid balances of the
aggregate rent reserved under the Master Lease and applicable
Lease Schedule plus the value of Lessor's residual interest in
the Equipment (based on the Minimum Option Value). Upon Lessor's
receipt of such payment, Lessee and/or Lessee's insurer shall be
entitled to Lessor's interest in said item for salvage purposes,
in its then condition and location, as is, without warranty,
express or implied.
11. Insurance. Lessee shall keep the Equipment insured
against all risks of loss or damage from every cause whatsoever
for not less than the full replacement value thereof, and shall
carry public liability and property damage insurance covering the
Equipment and its use. All such insurance shall be in form and
amount reasonably acceptable to Lessor and consistent with any
requirements imposed on Lessor to by its lenders. The foregoing
notwithstanding, Lessee may elect to self-insure in accordance
with its customary business practices in lieu of obtaining the
insurance required hereunder. If Lessee self-insures, Lessee
shall so notify Lessor, and, in any event, Lessor shall be deemed
an additional insured. If Lessee procures insurance, Lessee
shall deliver a certificate of such insurance to Lessor.
Insurance or self-insurance proceeds shall be applied toward the
replacement, restoration or repair of the Equipment.
12. Indemnity. Lessee shall indemnify and hold Lessor
harmless against, any and all claims, actions, suits, proceedings
costs, expenses, damages, and liabilities, including attorney's
fees, arising out of, connected with, or resulting from the
Equipment or the Master Lease, including without limitation, the
manufacture, selection, delivery, possession, use, operation, or
return of the Equipment.
13. Default and Remedies. If Lessee ceases doing business
as a going concern, or if a petition in bankruptcy, arrangement,
insolvency, or reorganization is filed by or against Lessee and
is not dismissed within sixty (60) days, or if Lessee makes an
assignment for the benefit of creditors, or if on or prior to the
expiration of thirty (30) days after written notice to Lessee
from Lessor of any other breach of this Master Lease (whether
monetary or non-monetary) Lessee fails to cure said breach,
Lessor may exercise any one or more of the following remedies:
(a) To declare the entire balance of rent hereunder
discounted to present value at the then Base Index Rate
immediately due and payable as to any or all Lease Schedules of
Equipment covered hereby.
(b) To sue for and recover all rents, and other monies
due, with respect to any or all items of Equipment listed on any
or all Lease Schedules to the extent permitted by law.
(c) To require Lessee to assemble all Equipment at
Lessee's expense, at a place reasonably designated by Lessor.
(d) Pursuant to applicable law and after demand, to
remove any physical obstructions for removal of the Equipment
from the place where the Equipment is located and take possession
of any or all items of Equipment wherever same may be located,
disconnecting, and separating all such Equipment from any other
property. Lessor may, at its option, use, ship, store, repair,
or lease all Equipment so removed and sell or otherwise dispose
of any such Equipment at a private or public sale.
Lessor may exhibit and resell the Equipment at Lessee's
premises at reasonable business hours without being required to
remove the Equipment. If Lessor takes possession of the
Equipment, Lessor shall give Lessee credit for any sums received
by Lessor from the sale or rental of the Equipment after
deduction of the expenses of sale or rental and Lessor's residual
interest in the Equipment. Lessee shall also be liable for and
shall pay to Lessor all expenses incurred by Lessor in connection
with the enforcement of any of Lessor's remedies, including all
expenses of repossessing, storing, shipping, repairing, and
selling the Equipment. Lessor and Lessee acknowledge the
difficulty in establishing a value for the unexpired Lease term
and owing to such difficulty agree that the provisions of this
paragraph represent an agreed measure of damages and are not to
be deemed a forfeiture or penalty.
If any payment is not made by Lessee within fifteen (15)
days of the date due provided in any Lease Schedule, Lessee
shall pay to Lessor, not later than one month thereafter, an
amount calculated at the rate of five cents per one dollar of
each such delayed payment, but only to the extent allowed by law.
Such amount shall be payable in addition to all amounts payable
by Lessee as a result of exercise of any of the remedies herein
provided.
All of Lessor's remedies hereunder are cumulative, are in
addition to any other remedies provided for by law, and may, to
the extent permitted by law, be exercised concurrently or
separately. The exercise of any one remedy shall not be deemed
to be an election of such remedy or to preclude the exercise of
any other remedy. No failure on the part of the Lessor to
exercise and no delay in exercising any right or remedy shall
operate as a waiver thereof or modify the terms of this Lease.
14. Performance by Lessor of Lessee's Obligations. If
Lessee fails to comply with any provision of this Master Lease
with respect to any Lease Schedule, Lessor may effect such
compliance on behalf of Lessee upon fifteen (15) days' prior
written notice to Lessee. In such event, all monies expended by,
and all expenses of Lessor in effecting such compliance shall be
deemed to be additional rental, and shall be paid by Lessee to
Lessor at the time of the next monthly payment of rent set forth
in such Schedule.
15. Lessee's Assignment; Quiet Enjoyment. Without Lessor's
prior written consent which consent shall not be unreasonably
withheld or delayed, Lessee shall not assign, transfer, pledge,
hypothecate, or otherwise dispose of the Equipment or any
interest therein. Notwithstanding any assignment by Lessor,
providing Lessee is not in default hereunder, Lessee shall
quietly enjoy use of the Equipment, subject to the terms and
conditions of this Master Lease and all Lease Schedules.
16. Notices. Service of all notices under this Master
Lease shall be sufficient if given personally or mailed by first
class U.S. mail postage prepaid to the party involved, Attention:
General Counsel, at its respective address set forth herein, or
at such other address as said party may provide in writing from
time to time. Any such notice mailed to said address shall be
effective when deposited in the United States mail, duly
addressed and with postage prepaid, or personally delivered.
17. Captions. Captions are used in this Master Lease for
convenience only, and are not intended to be used in construction
or interpretation of this Master Lease.
18. Time of Essence. Time is of the essence in this Master
Lease.
19. Entire Agreement; Modification. This Master Lease,
together with any Lease Schedules executed by the parties and
Exhibits A and B, contains the entire agreement between the
Lessor and Lessee. No modification of this Master Lease, or any
Lease Schedule, shall be effective unless in writing and executed
by an executive officer of the Lessor.
20. Non-Waiver. No delay or failure by the Lessor or
Lessee to exercise any right under this Master Lease, and no
partial or single exercise of that right, shall constitute a
waiver of that or any other right, unless otherwise expressly
provided herein. A waiver of default shall not be a waiver of
any other or subsequent default.
21. Governing Law. This Master Lease shall be construed in
accordance with and governed by the laws of the State of
Missouri.
22. Counterparts. This Master Lease may be executed in two
or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
23. Binding Effect. The provisions of this Master Lease
shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, legatees, personal
representatives, successors, and assigns.
IN WITNESS WHEREOF, this Master Lease has been executed as
of the day and year first above written.
LESSOR: LESSEE:
EDJ LEASING CO., L.P. EDWARD D. JONES & CO., L.P.
By: LHC, Inc., By: EDJ Holding Company,
Inc.
General Partner General Partner
By: By:
Name: Name:
Title: Title:
EXHIBIT A
MASTER LEASE # SCHEDULE
WHEREAS EDJ LEASING CO., L.P., a Missouri limited
partnership, 201 Progress Parkway, Maryland Heights, Missouri
63043 ("Lessor") and EDWARD D. JONES & CO., L.P., a Missouri
limited partnership, 201 Progress Parkway, Maryland Heights,
Missouri 63043 ("Lessee") have entered into a certain Master
Lease Number __, dated ___________________, 1994, this Schedule
together with that Master Lease shall be considered a separate
lease pursuant to the terms of the Master Lease and this Schedule
the same as if a single lease agreement containing such terms had
been executed covering the equipment listed herein.
NOW THEREFORE, the parties hereby agree as follows:
1. Equipment - See Attachment 1, made a part hereof.
2. Base Rent -$______ per month. Commencing with the
second monthly payment of Base Rent, the Base Rent provided for
in this Lease Schedule shall be adjusted for any basis point
(.01%) increase or decrease in the Index Rate from the Base Index
Rate which is in effect on the 30th day prior to the applicable
Base Rent due date. The amount of such adjustment shall be
$__________ for each basis point increase or decrease in the
Index Rate. For purposes of this calculation, the "Index Rate"
shall be the prime or base rate of interest designated as such by
__________ Bank, from time to time, and the "Base Index Rate"
shall be the Index Rate in effect as of the date of this Lease
Schedule as forth below.
3. Number of Lease Payments __________
4. Rent Commencement Date ___________
5. Minimum Option Percentage - ___%
6. Maximum Option Percentage - ___%.
7. Acquisition Value: - $________________
8. Minimum Option Value - $_________
9. Maximum Option Value - $_________
10. Base Index Rate ____%
Dated as of _________________________, 19___
LESSOR: LESSEE:
EDJ LEASING CO., L.P. EDWARD D. JONES & CO., L.P.
By: LHC, Inc., General Partner By: EDJ
Holding Company, Inc., General Partner
By:_________________________
By:____________________________
Name:______________________
Name:__________________________
Title:_______________________
Title:___________________________
Exhibit 10.35
LEASE FINANCING LINE OF CREDIT AGREEMENT
This Lease Financing Line of Credit Agreement (the "Agreement") is
made and entered into by and between the undersigned EDJ Leasing Co.,
L.P., ("Borrower") a Missouri limited partnership whose address is
201 Progress Parkway, Maryland Heights, Missouri and Enterprise Bank
("Bank") whose address is 150 Meramac, Clayton, Missouri 63105 as of
the date set forth on the last page of this Agreement.
ARTICLE I
LOAN AMOUNT, LEASES, NOTES AND CONDITIONS
1.1 Loan Amount; Advances and Notes.
(a) Maximum Loan Amount. From time to time prior to November 30,
1995 or the earlier termination of this Agreement, Bank shall make one
or more loans to Borrower up to the aggregate principal amount
outstanding at any one time $10,000,000.00 ("Loan Amount") for the
purposes and subject to the conditions ser forth herein.
(b) Advances/Type of Leased Property. Each loan by Bank ("Advance"
or "Advances") shall be used by Borrower to purchase certain office
computer and communications equipment which Borrower will in turn
lease, sell or otherwise provide to Edward D. Jones & Co,, L.P.
("Lessee") pursuant to one or more leases, installment sales
agreements, chattel paper, accounts receivable and the like
(collectively "Lease" or "Leases") which Leases, and Borrower's
interest in the property described in the Leases ("Leased Property"),
shall be pledged to Bank. As used herein, "Lease Collateral" shall
mean (individually and collectively) the Lease and the Leased Property
described therein (whether such Leased Property constitutes inventory,
equipment or otherwise in the hands of Borrower) which have been
financed by Bank and all accounts, contract rights and general
intangibles related thereto; plus all returns and repossessions of the
Leased Property; all additions, modifications, accessories, spare and
repair parts, and tools for the Leased Property; all subleases,
chattel paper, licenses, permits maintenance, warranty, software,
remarketing and repurchase agreements regarding the Leased Property;
any guaranties, letters of credit, and collateral pledges supporting
Lessee's obligations under the Lease; and all proceeds from any of the
foregoing (including, without limitation, from any insurance and any
premium refunds from any insurance covering the Leased Property or
Lessee). Borrower shall deliver to Bank an Advance Request, in the
form attached as Exhibit E hereto, at the time of each Advance
request. For purposes of this Agreement, "Leased Property" shall mean
office computer and/or communications equipment satisfactory to Bank
purchased with proceeds of an Advance (unless otherwise agreed in
writing by Bank).
(c) Minimum Advance and Calculation of Each Advance. Any Advance
that Bank made under this Agreement shall be not less than $500,000.
Dollars.
(d) Note(s). All Advances will be evidenced by a single Term Note
prepared by Bank in form attached hereto as Exhibit A ("Note"), and
the outstanding principal balance thereunder shall be amortized over a
period of sixty (60) months (or such other terms mutually agreeable to
Bank and Borrower) commencing on the Start Date (as defined in Section
1.1(g) below); provided the aggregate principal amount outstanding
under all Note shall not at any time exceed the Loan Amount. In
addition, should any Lease Pledged and assigned to Bank in support of
the Note cease to be an Eligible Lease under Section 3.2 below,
Borrower shall, at Bank's option:
(1) Pay the outstanding unpaid principal amount due under the Note by
a sum equal to the then remaining rents due under such ineligible
Lease; or
(2) Provide to Bank, within ten (10) days of written demand, a
substitute Eligible Lease which is satisfactory to Bank.
(e) Prepayment of Note. In the event the aggregate principal amount
owing under the Note shall exceed the Loan Amount, Borrower shall
immediately repay such excess in good funds upon demand of Bank.
(f) Timing of Advances. Each Advance request by Borrower shall be
made at least 10 business days prior to the desired date of
disbursement.
(g) Advances/Start Date and Paying Procedure. Borrower may request
Advances hereunder until November 30, 1995 ("Start Date") at which
time no further Advances shall be obtainable by Borrower (Unless
agreed in writing by Bank). On the Start Date, Borrower shall be
obligated to repay the then outstanding principal balance of the Note
over 60 months from the Start Date on fully amortizing basis plus
accrued interest as provided in the Note. Prior to the Start Date,
Borrower shall pay interest on the outstanding principal balance of
the Note on a monthly basis commencing December 1, 1994 and on the
same day of each month thereafter. The Bank is authorized and
directed to credit any of the Borrower's accounts with the Bank (or to
the account the Borrower designates in writing) for all Advances made
hereunder, and the Bank is authorized to debit such account (or any
other account of the Borrower with the Bank) for the amount of any
principal or interest due under the Note, and any other amount due
hereunder on the due date.
1.2) Interest Rate. Interest on each Advance shall be at a rate
equal to the prime rate as announced from time to time by Bank (which
rate may not necessarily be the best interest rate available at Bank).
Interest shall accrue from the date of Advance and shall be calculated
and paid per the terms of the Note and this Agreement.
1.3 Closing Fee. Borrower shall pay to Bank a closing fee of NA
Dollars ($_______________) to pay for Bank's legal expenses in closing
this transaction.
1.4 Initial Conditions to Advance. Bank shall not be obligated to
make (or continue to make) the initial Advance hereunder unless:
(a) the Bank has received executed originals of the Note and all
other documents or agreements applicable to the loans described herein
(collectively, with these Agreement, the "Loan Documents") in form and
content satisfactory to the Bank;
(b) if the loan is secured, the Bank has received confirmation
satisfactory to it that the Bank has a properly perfected security
interest, mortgage or lien, with the proper priority in the Lease
Collateral;
(c) with respect to the Initial Advance only, the Bank has received
certified copies of the Borrower's Articles of Incorporation and by-
laws, or its partnership agreement (as appropriate), certification of
corporate or partnership status satisfactory to the Bank, and all
other relevant documents;
(d) with respect to the Initial Advance only, the Bank has received a
certified copy of a resolution or authorization in form and content
satisfactory to the Bank authorizing the loan and all acts
contemplated by this Agreement and all related documents, and
confirmation of proper authorization of all guaranties and other acts
of third parties contemplated hereunder;
(e) with respect to the Initial Advance only, the Bank has been
provided with an opinion of the Borrower's counsel in form and content
satisfactory to the Bank confirming such matters as the Bank requests;
(f) no default exists under this Agreement or under any other Loan
Documents;
(g) all proceedings taken in connection with the Initial Advance
contemplated by this Agreement (including any required environmental
assessments), and all instruments, authorizations and other documents
applicable thereto, are satisfactory to the Bank and its counsel;
(h) with respect to the Initial Advance only, Bank has completed a
UCC and lien search on Borrower, and Bank has received a termination
or release from any creditor which may have a conflicting interest in
the Lease Collateral to financed by Bank (or, in the alternative, Bank
and such creditor enter into an intercreditor agreement satisfactory
to Bank); and
(i) with respect to Initial Advance only, Bank has approved in
writing the form of the Lease, UCC financing statements and other
documentation to be used to document and evidence the Lease, and
Borrower's interest under the Lease and to the Leased Property ("Lease
Documents"); and the approved Lease Documents are attached hereto as
Exhibit D.
1.5 Additional Conditions to Each Advance. As additional conditions
to each Advance and without limiting the terms of this Agreement or of
Section 1.4 Initial Conditions to Advances above, Bank will require
the following:
(a) An executed original Note and all other documents or agreements
reasonable required by Bank (including but not limited to the
documents specified below in form and content satisfactory to Bank);
(b) Satisfactory confirmation that Bank has a properly perfected
exclusive security interest and lien, in the Lease Collateral to
secure the Note;
(c) The Lease(s) used to support the Note is/are Eligible Lease. As
used herein, "Eligible Lease" shall mean a Lease satisfying the
following requirements:
(1) The Lease executed by the Lessee is in form similar to that lease
form attached hereto as Exhibit D which is hereby approved by Bank;
(2) The terms of the Lease are acceptable to Bank;
(3) The Lease is for a term of forty-eight (48) months of less;
(4) The Lease is not in default, and all rental payments under the
Lease are current;
(5) Bank has received satisfactory written confirmation that the
Leased Property described in the Lease has been delivered to the
Lessee, accepted by the Lessee;
(6) [Intentionally Omitted]
(7) Bank has confirmed the Qualified Property Cost of the Leased
Property based on the actual invoiced cost from the vendor, and
Borrower has paid for the Leased Property (or that Bank's Advance will
be made to the supplier of the Leased Property and satisfy Borrower's
obligations to purchase the Leased Property free and clear of any
liens or claims by any vendor of the Leased Property);
(8) Bank has satisfactorily accounted for any advance rent payments
and security deposits received by Borrower respecting the Lease;
(9) Any material third-party warranties, maintenance agreements,
certificates or permits needed to own, operate or evidence ownership
of the Leased Property have been obtained by Borrower and/or Lessee
("Third-Party Agreements"), and a copy thereof has been provided to
Bank if requested by Bank;
(10) To the extent deemed necessary by Bank, Borrower has obtained
the written consent of any third party required to permit Bank to be
an assignee of Borrower's or Lessee's rights under any third-party
agreement affecting the Lease Collateral; or be a third-party
beneficiary thereunder;
(11) [Intentionally Omitted]
(12) The Lease is not a "consumer lease" for purposes of any state or
federal law (including 15 U.S.C. 1667 et seq. ["Consumer Leasing
Act"];
(13) To the extent the Lease is evidenced by a lease schedule,
supplement or similar agreement which is part of a master lease
agreement (or similar agreement), the Lease constitutes an independent
and stand-alone lease of property which is separately and
independently enforceable by Bank apart from any other Lease under the
master lease agreement;
(14) [Intentionally Omitted]
(15) All of the representations and warranties set forth in Section
2.16 Status of Leases below are true.
(d) [Intentionally Omitted]
(e) Borrower has delivered to Bank an Advance Request and Collateral
Assignment of Lease and Lease Collateral in the form attached hereto
as Exhibit E satisfactory to Bank; plus a fully completed Lease
Assignment Document Checklist in the form attached hereto as Exhibit F
as to each Lease to be assigned to Bank;
(f) Bank receives (a) the original Lease between Borrower and each
Lessee, or (b) a copy of the original Lease between Borrower and each
Lessee containing the following pledge notice conspicuously stamped on
the front page of the Lease (and on the front of each lease schedule
if applicable): "Original Lease/Pledged to Enterprise Bank St. Louis,
Missouri". Debtor warrants that there shall be only one original
Lease, and Borrower shall mark all other copies or duplicates thereof
"COPY ONLY/ORIGINAL HELD BY EDJ LEASING CO., L.P.";
(g) Borrower executes a UCC financing statement as to the Lease and
Lease Collateral satisfactory to Bank. Each such financing statement
should reference the specific Lease or Leases, the Lease Collateral
and proceeds thereof. The description of the Lease Collateral shall
include listings of quantity, make, model, serial number and any other
identifications reasonably acceptable to Bank;
(h) [INTENTIONALLY OMITTED]
(i) At Bank's request, a copy of each invoice for the Leased Property
sent by the supplier of the Leased Property to Borrower. Such invoice
should contain an adequate description of the Leased Property and the
cost thereof; plus a copy of all check(s) from Borrower payable to the
Vendor evidencing payment for the Leased Property or a copy of an
invoice from the vendor stamped "Paid" if paid by Borrower and not
Bank;
(j) If not previously provided to Bank, Borrower shall provide Bank
evidence of its qualification and authority to do business in state of
Missouri;
(k) If requested by Bank, Bank receives a written acknowledgement
from each Lessee in form satisfactory to bank as to Borrower's pledge
of the Lease Collateral to Bank, the waiver of Lessee's claims against
Bank and any other matters deemed reasonably necessary by Bank;
(l) Such other documents or information as Bank my reasonably require
to evidence the validity, enforceability and/or terms of any Lease,
and Bank's or Borrower's interest in the Lease Collateral; and
(m) No default exists under this Agreement or under any other Loan
Documents, or under any other agreements by and between Borrower and
Bank.
1.6 Cross-Collateralization. Notwithstanding the fact that each Note
is primarily secured by one or more Eligible Leases and the Lease
Collateral described therein, all of Borrower's liabilities under all
Notes and Borrower's other Obligations (as defined below) to Bank
hereunder or under any other agreements between Borrower and Bank are
secured by all the Lease Collateral now owned or hereafter acquired
with proceeds of any Advance by Bank without restriction.
1.7 Receipt of Collections. Bank and Borrower agree that all payment
made by any Lessee on Leases financed by Bank ("Collections") shall be
made in accordance with the provisions of (1(, (2) or (3) as marked
with an "X" below. The order of application and the actual
application of Collections shall be at the sole discretion of Bank:
[ ] (1) Lock Box Service. Prior to Bank making any Advances
hereunder, Borrower hereby agrees to enter into a lock box arrangement
satisfactory to Bank, pursuant to which Bank shall be granted sole and
exclusive access to the post office box to which Lessees shall be
instructed to forward payments made in respect to the Leases financed
by Bank. All Collections received through the lock box shall be
deemed the property of Bank and processed in accordance with such lock
box arrangement. All Collections received directly by Borrower shall
also be the property of Bank and be immediately delivered by Borrower
to Bank in precisely the form received (but endorsed by Borrower if
necessary for Collection), and until such delivery, Borrower shall not
commingle any Collections with any other funds or property of
Borrower, but shall hold the Collections upon an express trust for
Bank.
[ ] (2) Restricted Account/Direct Delivery. Immediately upon
receipt, Borrower shall (i) deliver to Bank or (ii) deposit with
______________________________________________ {strike either (i) or
(ii)] Collections in precisely the form received (but endorsed by
Borrower if necessary for collection). Said collections shall be the
property of Bank and, until such delivery, Borrower shall not
commingle any Collections with any other funds or property of Bank but
shall hold the Collections upon an express trust for Bank; or
[X] (3) Borrower Retention/Deposit of Collections. Absent an event
of default hereunder, Borrower may receive and retain all Collections,
provided such Collections are deposited in Borrower's general
operating accounts. In the event of a default by Borrower hereunder,
Borrower shall deliver to Bank all Collections as requested by Bank.
(b) Credit for Collections. [Intentionally Omitted]
1.8 Collections Deficiency/Payment on Notes. In the event the amount
of Collections is insufficient to fully pay the amount of principal
and accrued interest then due on any Note for the applicable period,
Borrower shall provide Bank good funds sufficient to satisfy all
amounts then due under the Note(s) plus any accrued interest thereon
within on (1) business day of demand.
1.9 Verification of Lease Collateral and Notification. Lender may
verify the status of and inspect the Lease Collateral in any
reasonable manner, and Borrower shall assist Bank in so doing.
Annually, Borrower shall verify in writing that the Leased Property is
located at the locations listed in Exhibit B to the Business Security
Agreement.
1.10 Escrow of Advance Rentals/Security Deposits. [Intentionally
Omitted]
1.11 Term of Agreement/Repayment of Obligations. Absent an earlier
termination of this Agreement by default, this Agreement shall
terminate on September 1, 2000 whereupon all amounts due hereunder
(including all Notes issued hereunder) shall be due and payable to
Bank without further notice or demand unless Bank and Borrower have
agreed in writing extend the term of this Agreement for an additional
one (1) year period.
ARTICLE II
WARRANTIES AND COVENANTS
While any part of the credit granted to the Borrower under this
Agreement or the other Loan Documents is available, or any obligations
under any of the Loan Documents are unpaid or outstanding, the
Borrower continuously warrants and agrees as follows:
2.1 Accuracy of Information. All information, certificates and
statements given to the Bank pursuant to this Agreement and the other
Loan Documents will be true and complete in all material respects when
given.
2.2 Organization and Authority; Litigation. If the Borrower is a
corporation or partnership, the Borrower is a validly existing
corporation or partnership (as applicable) in good standing under the
laws of the state of organization, and has all requisite power and
authority, corporate or otherwise, and possesses all licenses
necessary, to conduct its business and own its properties. The
execution, delivery and performance of this Agreement and the other
Loan Documents (k() are within the Borrower's power; (ii) have been
duly authorized by proper corporate or partnership action (as
applicable); (iii) do not require the approval of any governmental
agency; and (iv) will not violate any law, agreement or restriction by
which the Borrower is bound. This Agreement and the other Loan
Documents are the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
terms (except as may be affected by the general application of
bankruptcy, insolvency and other creditor's right laws). To
Borrower's knowledge, there is no litigation or administrative
proceeding threatened or pending against the Borrower which would, if
adversely determined, have a material adverse effect on the Borrower's
financial condition or its property.
2.3 Existence, Business Activities; Assets. The Borrower will (i)
preserve its corporate or partnership (as applicable) existence,
rights and franchises; (ii) not make any material change in the nature
or manner of its business activities; (iii) not liquidate, dissolve,
merge or consolidate with or into another entity; and (iv) not sell,
transfer or otherwise dispose of all or substantially all of its
assets except in the ordinary course of Borrower's business.
2.4 Use of Proceeds; Margin Stock; Speculation. Advances by the Bank
hereunder will be used exclusively by the Borrower for the purposes
represented to the Bank. The Borrower will not use any of the loan
proceeds to purchase or carry "margin" stock (as defined in Regulation
U of the Board of Governors of the Federal Reserve System). No part
of any of the proceeds will be used for speculative investment
purposes, including, without limitations, speculating or hedging in
the commodities and/or futures market.
2.5 Environmental Matters. Except as disclosed in a written schedule
attached to this Agreement (if no schedule is attached, there are no
exceptions) and to the best of Borrower's knowledge, no uncorrected
violation by the Borrower of any federal, state or local laws
(including statutes, regulations, ordinances or other governmental
restrictions and requirements) relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise
relating to the environment or Hazardous Substances as hereinafter
defined, whether such laws currently exist or are enacted in the
future (collectively "Environmental Laws"). The term "Hazardous
Substances" will mean any hazardous or toxic wastes, chemicals or
other substances, the generation, possession or existence of which is
prohibited or governed by any Environmental Laws. The Borrower is not
subject to any judgment, decree, order citation, or a party to (or
threatened with) any litigation or administrative proceeding, which
asserts that the Borrower (i) has violated any Environmental Laws;
(ii) is required to clean up, remove or take remedial or other action
with respect to any Hazardous Substances (collectively "Remedial
Action"); or (iii) is required to pay all or a portion of the cost of
any Remedial Action, as a potentially responsible party. To the best
of Borrower's knowledge, the Borrower currently complies with and
will continue to timely comply with all applicable Environmental
Laws;; and Borrower will provide the Bank, immediately upon receipt,
copies of any notice, or complaint, or order asserting or alleging any
circumstance or condition which requires or may require a material
financial contribution by the Borrower or Remedial Action or other
response by or on the part of the Borrower under Environmental Laws,
or which seeks damages or civil, criminal or punitive penalties from
the Borrower for an alleged violation of Environmental Laws.
2.6 Compliance with Laws. The Borrower has complied with all laws
applicable to its business and its properties, and has all permits,
licenses and approvals required by such laws.
2.7 Restriction on Indebtedness. [Intentionally Omitted]
2.8 Restriction on Liens. The Borrower will not create, incur,
assume or permit to exist any mortgage, pledge, encumbrance or other
lien or levy upon or security interest on any Leased Collateral.
2.9 Restriction on Contingent Liabilities. [Intentionally Omitted]
2.10 Insurance. The Borrower will maintain insurance to such extent,
covering such risks and with such insurers as is usual and customary
for businesses operating similar properties including insurance for
fire and other risks insured against by extended coverage, public
liability insurance and workers' compensation insurance; and will
designate the Bank as loss payee with a "lender's loss payable"
endorsement on any casualty policies and take such other action as the
Bank may reasonable request to ensure that the Bank will receive
(subject to no other interest) the insurance proceeds on the Lease
Collateral. Borrower may be self-insured as to any Leased Property at
any particular location so long as the book values of such Leased
Property is not in excess of $50,000.00. Prior to an event of default
hereunder, if a casualty occurs to any Leased Property financed by
Bank, Bank will permit Borrower to replace the Leased Property with
new Leased Property of equivalent value provided Borrower provides
Bank with evidence of Borrower's good title or exclusive perfected
security interest to the new Leased Property free and clear of any
security interests, liens or claims except Bank's exclusive perfected
purchase money security interest in the new Leased Property.
2.11 Taxes and Other Liabilities. Borrower will pay and discharge,
when due, all of its taxes, assessments and other liabilities,.except
when the payment thereof is being contested in good faith by
appropriate procedures which will avoid foreclosure of liens securing
such items and with adequate reserves provided therefor.
2.12 Financial Statements and Reporting. The financial statements
and other information previously provided to Bank and to be provided
to Bank in the future are or will be complete and accurate, in all
material respects and prepared in accordance with generally accepted
accounting principles. There has been no material adverse change in
Borrower's financial condition since such information was provided to
Bank. Borrower will (a) maintain accounting records in accordance
with generally recognized and accepted principles of accounting
consistently applied throughout the accounting periods involved; (b)
provide Bank with such information concerning its business affairs and
financial condition (including insurance coverage) as Bank may
reasonably request; and (c) without request, provide Bank with
management-prepared financial statements:
[X] quarterly within forty-five (45) days of the end of each quarter;
[ ] monthly within _______________ ( ) days of the end of each
month;
and annual audited financial statements prepared by any "Big Six"
accounting firms within ninety (90) days of the end of each fiscal
year. Borrower shall not change its fiscal year.
2.13 Inspection of Properties and Records. Borrower will permit
representatives of Bank to visit and inspect any of the Lease
Collateral, and examine any of the books and records of Borrower at
any reasonable time and as often as Bank may reasonable desire at
Bank's expense (but at Borrower's expense if an event of default has
occurred and is continuing).
2.14 Financial Status. Borrower shall comply at all times with those
financial covenants set forth in sections Exhibit G of this Agreement.
2.15 Lease Collateral Reporting.
(a) Borrower shall promptly notify Bank if any Lessee is more than
fifteen (15) days past due or is otherwise in material default under
its Lease; and shall keep Bank informed of the steps being taken by
Borrower to preserve its rights under the Lease against Lessee, and
its rights in the Lease Collateral.
(b) Borrower shall cause Edward D. Jones & Co., L.P. to provide Bank
with its quarterly FOCUS reports within fifteen (15) days of their
required filing date and its annual audited year end financial
statements when available.
2.16 Status of Leases. As to each Eligible Lease financed by Bank,
the following is true:
(a) All of its terms are legally enforceable against the Lessee in
all material respects, and constitutes the entire agreement of
Borrower and Lessee with respect to the Leased Property;
(b) The Eligible Lease is not in default nor does Borrower know of
any condition or event which would, with the passage of time or
otherwise, cause the Lessee to be default thereunder;
(c) All statements contained in the Eligible Lease are true and
complete in all material respects;
(d) [Intentionally Omitted]
(e) Any cash down payments or trade-ins identified in the Eligible
Lease were actually received by Borrower;
(f) Borrower has made no agreements to defer any payments under the
Eligible Lease:
(g) [Intentionally Omitted]
(h) Lessee has no offset, claim, counterclaim, defense or action
against Borrower regarding the Eligible Lease or the Leased Property;
(i) Borrower has full authority to collaterally assign to and grant
an exclusive perfected security interest to the Bank in the Eligible
Lease and the Lease Collateral vis-a-vis Lessee;
(j) [Intentionally Omitted]
(k) Borrower shall treat each Lease as a true lease under applicable
state law wherein Borrower is deemed to be the owner of the Leased
Property for all purposes (including for federal and state income tax
purposes), and Borrower shall be depreciating the Lease Property on
its financial statements.
2.17 Advertising/Solicitations/Financing. [Intentionally Omitted]
ARTICLE III
COLLATERAL AND QUARANTIES
3.1 Collateral. This Agreement and each Note are secured, in part,
by the collateral described in the following Security Agreement(s):
[X] Business Security Agreement dated December 6, 1994;
[ ] Certificates of Title to Leased Property;
[ ] Real Estate Mortgage(s)/Deed(s) of Trust dated
___________________;
[ ] Collateral Pledge Agreement dated
________________________________;
[ ] Real Estate Mortgage(s)/Deed(s) of Trust dated
___________________;
[ ] Other
____________________________________________________________.
The information in this Article III is for information only and the
omission of any reference to an agreement will not affect the validity
or enforceability thereof. The rights and remedies of the Bank
outlined in this Agreement and the documents identified above are
intended to be cumulative.
3.2 Guaranties. This loan is guaranteed by The Jones Financial
Companies, a Limited Partnership.
3.3 Credit Balances; Setoff. As additional security for the payment
of the Obligations described in the Loan Documents, the Borrower
hereby grants to the Bank a security interest in, a lien on and an
express contractual right to set off against all depository account
balances, cash and any other property of the Borrower now or hereafter
in the possession of the Bank. The Bank may, at any time upon the
occurrence of a default hereunder (but after any applicable notice and
cure periods) set off against the Obligations whether or not the
Obligations (including future installments) are then due or have been
accelerated, all without any additional advance or contemporaneous
notice or demand of any kind to the Borrower, such additional notice
and demand being expressly waived.
ARTICLE IV
DEFAULTS
4.1 Defaults. Notwithstanding any cure periods described below, the
Borrower will immediately notify the Bank in writing when the Borrower
obtains knowledge of the occurrence of any default specified below.
Regardless of whether the Borrower has given the required notice, the
occurrence of one or more of the following will constitute a default
to hereunder:
(a) Nonpayment. The Borrower shall fail to pay any interest or
principal due on the Note or any fees, charges, costs or expenses
under the Loan Documents after five (5) days written notice from
Banks;
(b) Nonperformance. The Borrower or any guarantor of Borrower's
Obligations the the Bank ("Guarantor") shall fail to perform or
observe any agreement, term, provision, condition, or covenant (other
than a default occurring under (a), (c), (e), (f) or (g) of this
Section 4.1) which has not been cured after thirty (30) days from the
earlier of Borrower's actual knowledge of such nonperformance or
written notice from Bank;
(c) Misrepresentation. Any financial information, statement,
certificate, representation or warranty given to the Bank by the
Borrower or any Guarantor (or any of their representatives) in
connection with entering into this Agreement or the other Loan
Documents and/or any borrowing thereunder, or required to be furnished
under the terms thereof, shall prove untrue or misleading in any
material respect (as determined by the Bank in the exercise of its
judgment) as of the time when given;
(d) Default on Other Obligations. The Borrower or any Guarantor
shall be in default under the terms of any loan agreement, promissory
note, lease, conditional sale contract or other agreement, document or
instrument evidencing, governing or securing any indebtedness owing by
the Borrower or any Guarantor to the Bank or any indebtedness in
excess of $500,000.00 owing by the Borrower to any third party, and
the period of grace, if any, to cure said default shall have passed;
(e) Judgments. Any judgment shall be obtained against the Borrower
or any Guarantor which, together will all other outstanding
unsatisfied judgments against the Borrower (or such Guarantor), shall
exceed the sum of $500,000.00 and shall remain unpaid, unvacated,
unbonded or unstayed for a period of 30 days following the date of
entry thereof;
(f) Inability to Perform; Bankruptcy/Insolvency. (i) the Borrower or
any Guarantor shall cease to exist; or (ii) any Guarantor shall
attempt to revoke any guaranty of the Obligations describe herein, or
any guaranty becomes unenforceable in whole or in part for any reason;
or (iii) any bankruptcy, insolvency or receivership proceedings, or an
assignment for the benefit of creditors, shall be commenced under any
federal or state law by or against the Borrower or any Guarantor; or
(iv) the Borrower or any Guarantor shall become the subject of any
out-of-court settlement with its creditors; or (v) the Borrower or any
Guarantor is unable or admits in writing its inability to pay its
debts as they mature;
(g) Adverse Change; Insecurity. [Intentionally Omitted]
(h) Default Under Leases. Borrower fails to perform its obligations
under any Leases pledged to Bank which remains uncured for a period of
thirty (30) days after written notice to Borrower.
4.2 Termination of Loans; Additional Bank Rights. Upon the
occurrence of any of the events identified in Section 4.1 above, the
Bank may at any time (notwithstanding any notice requirements or
grace/cure periods under this or other agreements between the Borrower
and the Bank): (i) immediately terminate its obligation, if any, to
make additional loans to the Borrower; (ii) set off and/or (iii) take
such other steps to protect or preserve the Bank's interest in any
Lease Collateral, including, without limitation, notifying Lessee's to
make payments directly to the Bank, advancing funds to protect any
Lease Collateral and insuring the Lease collateral at the Borrower's
expense; all without demand or notice of any kind, all of which are
hereby waived.
4.3 Acceleration of Obligations. Upon the occurrence of any of the
events identified in Sections 4.1(a) through (e), 4.1(g) and 4.1(h),
and the passage without cure of any applicable cure periods, the Bank
may at any time thereafter, by written notice to the Borrower, declare
the unpaid principal balance of any Obligations together with the
interest accrued thereon and other amounts accrued hereunder and under
the other Loan Documents, to be immediately due and payable; and the
unpaid balance will thereupon be due and payable, all without
presentation, demand, protest or further notice of any kind, all of
which are hereby waived, and notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents. Upon the
occurrence of any event under Section 4.1(f), the unpaid principal
balance of any Obligations, together with all interest accrued thereon
and other amounts accrued hereunder and under the other Loan
Documents, will thereupon be immediately due and payable, all without
presentation, demand, protest or notice of any kind, all of which are
hereby waived, and notwithstanding anything to the contrary contained
herein or in any of the other Loan Documents. Nothing contained in
Section 4.1, Section 4.2 or this section will limit the Bank's right
to set off as provided in Section 3.3 or otherwise in this Agreement.
4.4 Remedies Against Lease Collateral. After an event of default
hereunder and the passage without cure of any applicable cure periods,
Bank may or Borrower shall, upon request of Bank, notify each Lessee
whose Lease(s) are being financed by Bank to make payment directly to
Bank and Bank may enforced collection of, settle, comprise, extend,
renew or modify the obligations of such Lessee under the Lease, all
without notice to or the consent of Borrower. Bank shall have the
right to exercise all rights and remedies available to Borrower under
the Leases without further notice to or the consent of Borrower. Bank
shall have no obligation to perfect or continue the perfection of any
security interest of Borrower in the Lease Collateral; or protect the
Lease Collateral against action or claims of third parties (including
Lessee); or to enforce or preserve Borrower's rights under the Lease
or against Lessee and the Lease Collateral; or to proceed against any
or all of the Leases pledged to Bank; or undertake any verification of
any Lessee's compliance with the provisions of the Lease; or insure
any of the Lease Collateral; or pay any taxes or charges assessed
against the Leased Property. In the event Bank elects to enforce any
of Borrower;s rights against Lessee or the Leased Property, Borrower
hereby indemnifies and holds Bank harmless from any claims, damages,
costs or penalties (including reasonable attorneys fees of outside and
in-house counsel) arising from enforcement of Borrower's rights,
however arising.
4.5 Other Remedies. Nothing in this Article IV is intended to
restrict Bank's rights under any of its other agreements with Borrower
or at law, and Bank may exercise all such rights and remedies as and
when they are available.
ARTICLE V
CERTAIN DEFINED TERMS
5.1 Obligations Defined. "Obligations" shall include all Borrower's
debts, covenants, warranties, duties and liabilities to Bank under the
Loan Documents whether now or hereafter existing or incurred, whether
liquidated or unliquidated, whether absolute or contingent, whether
arising out of this Agreement or otherwise, and regardless of whether
such obligations arise out of existing or future credit granted by
Bank to Borrower, to Borrower and others, to other guaranteed or
endorsed by Borrower, or to any debtor-in-possession/successor-in-
interest of Borrower (including principal, interest, fees, expenses
and charges relating to any of the foregoing).
5.2 Other Terms. The other terms set forth in this Agreement shall
have the meanings set forth in the Uniform Commercial Code as adopted
in the state where Bank's main office is located, unless otherwise
defined herein.
5.3 Financial Definitions Supplement. If covenants regarding
financial status apply to this loan, the "Financial Definitions"
Supplement identified in Exhibit G of this Agreement is hereby
incorporated into this Agreement. The Borrower acknowledges receiving
a copy of such Supplement.
5.4 Additional Terms; Addendum/Supplements. The warranties,
covenants, conditions and other terms described in this Section and/or
in the Addendum and/or other attached document(s) referenced in this
Section are incorporated into this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 Delay; Cumulative Remedies. No delay on the part of Bank in
exercising any right, power or privilege hereunder or under any of the
other Loan Documents will operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder
preclude other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
specified are cumulative and are not exclusive of any rights or
remedies which the Bank would otherwise have.
6.2 Relationship to Other Documents. The warranties, covenants and
other obligations of the Borrower (and the rights and remedies of
Bank) that are outlined in this Agreement and the other Loan
Documents are intended to supplement each other. In the event of any
inconsistencies in any of the terms in the Loan Documents, all terms
shall be cumulative so as to five Bank the most favorable rights set
forth in the conflicting documents, except that if there is a direct
conflict between any preprinted terms and specifically negotiated
terms (whether included in an addendum or otherwise), the specifically
negotiated terms will control.
6.3. Participations; Guarantors. Bank may, at its option, sell all
or any interests in the Note and other Loan Documents to other
financial institutions (the "Participant"), upon written notice to
Borrower specifying the Participant(s) and in connection with such
sales (and thereafter) disclose any financial information the Bank my
have concerning Borrower to an such Participant or potential
Participant. From time to time, the Bank may, in its discretion and
without obligation to the Borrower, any guarantor or any other third
party, disclose information about the Borrower and this loan to any
guarantor, surety or other accommodation party. This provision does
not obligate the Bank to supply any information or release the
Borrower from its obligation to provide such information, and the
Borrower agrees to keep all Guarantors advised of its financial
condition and other matters which may be relevant to the Guarantors'
obligations to the Bank.
6.4 Successors. The rights, options, powers and remedies granted in
this Agreement and the other Loan Documents will extend to the Bank
and to its successors and assigns, will be binding upon Borrower and
its successors and assigns and will be applicable hereto and to all
renewals and/or extensions hereof.
6.5 Expenses and Attorney's Fees. The Borrower will reimburse the
Bank and any Participant (defined below) for all reasonable attorneys'
fees and all other costs, fees and out-of-pocket disbursements
(including fees and disbursements of both inside and outside counsel)
incurred by the Bank or any Participant in connection with the
preparation, execution, delivery, administration, defense and
enforcement of this Agreement or any of the other Loan Documents
(defined below), including reasonable fees and costs related to any
waivers or amendments with respect thereto (examples of costs and fees
include but are not limited to fees and costs for: filing, perfecting
or confirming the priority of the Bank's lien, title searches or
insurance, appraisals, environmental audits and other reviews related
to the Borrower and any Lease Collateral if requested by the Bank).
The Borrower will also reimburse the Bank and any Participant for all
costs of collection before and after judgment, and the costs of
preservation and/or liquidation of any Lease Collateral (including
fees and disbursements of both inside and outside counsel).
6.6 Indemnification. Except for harm arising from the Bank's willful
misconduct or wanton disregard of Borrower's rights hereunder, the
Borrower hereby indemnifies and agrees to defend and hold the Bank
harmless from any and all losses, costs, damages, claims and expenses
of any kind suffered by or asserted against the Bank relating to
claims by third parties arising out of the financing provided under
the Loan Documents or related to any collateral (including, without
limitation, the Borrower's failure to perform its obligations relating
to Environmental Matters described in Section 2.5 above). This
indemnification and hold harmless provision will survive the
termination of the Loan Documents and the satisfaction of the
Obligations due the Bank.
6.7 Notice of Claims Against Bank; Limitation of Certain Damages. In
order to allow the Bank to mitigate any damages to the Borrower from
the Bank's alleged breach of its duties under the Loan Documents or
any other duty, if any, to the Borrower, the Borrower agrees to give
the Bank prompt written notice of any claim or defense it has against
the Bank, whether in tort or contract, relating to any action or
inaction by the Bank under the Loan Documents, or the; transactions
related thereto, or of any defense to payment of the Obligations for
any reason. The requirement of providing timely notice to the Bank
represents the parties' agreed-to standard of performance regarding
claims against the Borrower and/or Bank. Notwithstanding any claim
that the Borrower may have against the Bank, and regardless of any
notice the Borrower may have given the Bank, the Bank will not be
liable to the Borrower for consequential and/or special damages
arising therefrom, except those damages arising form the Bank's
willful misconduct or wanton disregard of Borrower's rights hereunder.
6.8 Notices. Although any notice required to be given hereunder or
under any of the other Loan Documents might be accomplished by other
means, notice will always be deemed given when placed in the United
States Mail, with postage prepaid, or sent by overnight delivery
service, or sent by telex or facsimile, in each case to the address
set forth below or as amended.
All notices to Bank shall be sent to the address set forth on the
first page of this Agreement, Attention: Jack Mannebach; and all
notices to Borrower shall be sent to the address set forth on the
first page of this Agreement, Attention: Jack Mannebach; unless, in
each case, the parties agree tin writing to a different place of
notice.
6.9 Payments. The Bank is authorized to charge payments due under
the Loan Documents against any account of Borrower. All payments may
be applied by the Bank to principal. interest and other amounts due
under the Loan Documents in any order which the Bank elects.
6.10 Applicable Law and Jurisdiction; Interpretation and Joint
Liability. This Agreement and all other Loan Documents will be
governed by and interpreted in accordance with the internal laws of
the state where the Bank's main office is located, except to the
extent superseded by Federal law. Invalidity of any provisions of
this Agreement will not affect any other provision. THE BORROWER
HEREBY CONSENTS TO THE EXCLUSIVE JURISCTION OF ANY STATE OR FEDERAL
COURT SITUATED IN THE COUNTY OR FEDERAL JURISDCTION WHERE THE BANK'S
OFFICE WHICH IS DESIGBATED IN THE NOTE AS THE PLACE FOR PAYMENT IS
LOCATED (OR, IN THE ABSENCE OF SUCH DESIGNATION, THE BANK'S MAIN
OFFICE), AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH
REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO
THIS AGREEMENT, THE NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR
ANY TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR
INTERPRETATION OF ANY OT THE FOREGOING. Nothing herein will affect the
Bank's rights to serve process in any manner permitted by law, or
limit the Bank's right to bring proceedings against the Borrower or
the Lease Collateral in the competent courts of any other jurisdiction
or jurisdictions. This Agreement, the other Loan Documents and any
amendments hereto (regardless of when executed) will be deemed
effective and accepted only at the Bank's offices, and only upon the
Bank's receipt of the executed originals thereof. If there is more
than one Borrower, the liability of the Borrowers will be joint and
several, and the reference to "Borrower" will be deemed to refer to
all Borrowers.
6.11 Copies; Entire Agreement; Modification. The Borrower hereby
acknowledges the receipt of a copy of this Agreement and all other
Loan Documents.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD
BE READ CAREFULLYU BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS
WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF
THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL
ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN
EFFECT BETWEEN YOU AND THIS LENDER. A MODIFICATION OF ANY OTHER
CREDIT AGREEMENTS NOW IN EFFECT BETWEEN YOU AND THIS LENDER, WHICH
OCCURS AFTER RECEIPT BY YOU OF THIS NOTICE, MAY BE MADE ONLY BY
ANOTHER WRITTEN INTRUMENT. ORAL OR IMPLIED MODIFICATION TO SUCH
CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE RELIED UPON.
6.12 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY LAW, THE
BORROWER AND THE BANK HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL
RIGHT TO TRIAL BY JURY IN THEREUNDER, ANY COLLATERAL SECURING THE
OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED
THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
Dated this 6 day of December, 1994 at Clayton Missouri.
EDJ LEASING CO., L.P.
a Missouri limited partnership
By:
Name and Title: Steve Novik, Principal
ENTERPRISE BANK
By: Jack A Mannebach
Name and Title: Vice President
FIRSTAR BANK
TERM NOTE
$ 10,000,000.00 December 6, 1994
FOR VALUE RECEIVED,the undersigned borrower (the "Borrower"), promises
to pay to the order of Enterprise Bank (the "Bank"), at its main
office in Clayton, Missouri, the principal sum of Ten Million and
00/100 Dollars ($ 10,000,000.00). or the principal amount of all
Advances made by Bank to Borrower under the Lease Financing Line of
Credit Agreement dated December 6, 1994 by and between Borrower and
Bank ("Agreement"). Borrower shall repay the then outstanding
Interest.
principal balance of this Note in sixty (60) equal installments plus
accrued interest thereon commencing on the Start Date (as defined in
the Agreement) and on each _______________ day of each month
thereafter.
Payment Schedule. Interest on the outstanding principal balance
of this Note shall be equal to the "prime rate" as announced from time
to time by Bank (which rate may vary during the term of this Note and
may not be the best rate offered by Bank), and shall be payable
monthly commencing on January 6, 1995 and on the 6th day of each month
thereafter.
Interest will be computed for the actual number of days principal is
unpaid, using a daily factor obtained by dividing the stated interest
rate by 360.
Principal amounts remaining unpaid after the maturity thereof, whether
at fixed maturity or by reason of acceleration of maturity, shall bear
interest from and after maturity until paid at a rate of 2% per annum
plus the rate otherwise payable hereunder.
In no event will the interest rate hereunder exceed that permitted by
applicable law. If any interest or other charge is finally determined
by a court of competent jurisdiction to exceed the maximum amount
permitted by law, the interest of charge shall be reduced to the
maximum permitted by law, and the Bank may credit any excess amount
previously collected against the balance due or refund the amount to
the Borrower.
The Borrower will pay the Bank a late payment fee of ________________
5%_of_the_amount___due if any payment due hereunder is not made on or before
* its due date. Collection of the late payment fee shall not be deemed to be a
waiver of the Bank's right to declare a default hereunder. *the
expiration of ten (10) days from
This Note may be prepaid in full or in part at any time without
premium. Prepayments of less than all the outstanding principal
amount of this Note shall be applied upon principal payments in the
inverse order of their maturities.
Without affecting the liability of any Borrower, endorser, surety or
guarantor, the Bank may, without notice, renew or extend the time for
payment, accept partial payments, release or impair any collateral
security for the payment of this Note, or agree not to sue any party
liable on it.
This Term Note constitutes the Note issued under a Lease Financing
Line of Credit Agreement between the Borrower and the Bank, to which
Agreement reference is hereby made for a statement of the terms under
which the loan evidenced hereby was made and a description of the
terms and conditions upon which the maturity of this Note may be
accelerated, and for a description of collateral securing this Note.
The Borrower hereby acknowledges the receipt of a copy of this Note.
(Individual Borrower) EDJ Leasing Co., L.P.
Borrower Name (Organization)
___________________________(Seal) a limited partnership
Borrower Name _____________ By LHC, Inc.
___________________________(Seal) Name and Title its general partner
By Steve Novik
Borrower Name ______________
Name and Title Steven Novik,
Principal
Exhibit 10.36
MASTER LEASE
Master Lease Number: 2
THIS MASTER LEASE is made as of December 6, 1994, by and
between EDJ LEASING CO., L.P., a Missouri limited partnership,
201 Progress Parkway, Maryland Heights, Missouri 63043 ("Lessor")
and EDWARD D. JONES & CO., L.P., a Missouri limited partnership,
201 Progress Parkway, Maryland Heights, Missouri 63043
("Lessee").
WHEREAS, Lessor desires to lease to Lessee, and Lessee
desires to lease from Lessor, such equipment pursuant to the
provisions hereof and applicable lease schedules ("Lease
Schedules") which shall be executed by the parties from time to
time in the form attached hereto as Exhibit A, and which shall be
made a part hereof.
NOW, THEREFORE, in consideration of the premises, the
parties, intending to be legally bound, agree as follows:
1. Lease. Lessor hereby agrees to lease to Lessee, and
Lessee hereby agrees to lease from Lessor, the equipment
("Equipment") described in Lease Schedules which shall be
executed between the parties from time to time, and which shall
be attached to and become a part of this Master Lease. The
provisions of this Master Lease and the Lease Schedules shall
constitute the entire agreement between the parties with regard
to the subject matter hereof and shall supersede all prior
negotiations, agreements, and understandings, whether oral or
written, unless specifically incorporated by reference. The
lease of Equipment described in each particular Lease Schedule
shall be considered a separate Lease pursuant to the terms of the
Master Lease and each Lease Schedule the same as if a single
lease containing such terms had been executed covering such
items; except that, any provision of any Lease Schedule shall
supersede any conflicting provision of this Master Lease.
2. Term. The term of the lease with respect to the
Equipment listed on a Lease Schedule shall begin on the date such
Equipment is accepted by Lessee and shall continue for the number
of consecutive months from the "Rent Commencement Date" shown in
the related Lease Schedule (the "Initial Term") unless earlier
terminated as provided herein Any advance rentals shall not be
refundable if this Master Lease with respect to any or all Lease
Schedules is duly terminated by Lessor.
3. Rent. Lessee shall pay as rent for the initial
term of this Master Lease as to each Lease Schedule, the amount
reflected in each Lease Schedule as Base Rent. Base Rent
installments shall be payable monthly in arrears, the first such
payment being due on the Rent Commencement Date, or such later
date as Lessor designates in writing, and subsequent payments due
on the same day of each successive month thereafter during the
term hereof.
(a) Taxes. As additional rent, Lessee shall pay
all sales, use, excise, personal property, stamp, documentary and
ad valorem taxes, license and registration fees, assessments,
fines, penalties and similar charges imposed on the ownership,
possession or use of the Equipment during the term of this Master
Lease as to any Lease Schedule as and when due , and shall pay
all taxes (except Lessor's Federal or State net income taxes)
imposed on Lessor or Lessee with respect to the rental payments
hereunder. Lessee shall reimburse Lessor upon demand for all
taxes paid by or advanced by Lessor. Lessee shall file all
returns required therefor and furnish copies to Lessor.
(b) Increases in rent. Base Rent reflected in all
Lease Schedules shall increase or decrease at the same time and
at the same rate as changes in the Base Index Rate as described
in the applicable Lease Schedule.
(c) Net Lease. This Master Lease is a net lease and
all payments of Base Rent and additional rent hereunder are net
to Lessor.
4. Disclaimer of Warranties and Waiver of Defenses.
(a) No Warranties by Lessor. LESSOR, BEING NEITHER
THE MANUFACTURER, NOR SUPPLIER, NOR A DEALER IN THE EQUIPMENT,
MAKES NO WARRANTY AND HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR
IMPLIED, TO ANYONE, AS TO THE FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, DESIGN, CONDITION, CAPACITY, PERFORMANCE OR ANY
OTHER ASPECT OF THE EQUIPMENT OR ITS MATERIAL OR WORKMANSHIP.
Lessor further disclaims any liability for loss, damages, or
injury to Lessee or third parties as a result of any defects,
latent or otherwise, in the Equipment whether arising from
Lessor's negligence or application of the laws of strict
liability. As to Lessor, Lessee leases the Equipment "as is."
Lessee has selected the supplier of the Equipment and
acknowledges that Lessor has not recommended the supplier.
Lessor shall have no obligation to install, maintain, erect,
test, adjust, or service the Equipment. Lessee agrees to
install, maintain, and service the Equipment or cause the same to
be performed by qualified third parties. If the Equipment is
unsatisfactory for any reason, Lessee shall make claim on account
thereof solely against the supplier, and any of the supplier's
vendors, and shall nevertheless pay Lessor all rent payable under
the Lease.
(b) Assignment for Breach of Warranty. Lessor
hereby assigns to Lessee, solely for the purpose of prosecuting
such a claim, all of the rights which Lessor may have against any
supplier and any of the suppliers' vendors for breach of warranty
or other representations respecting the Equipment.
(c) Lessor's Assignment, Waiver of Defenses.
Lessee acknowledges Lessor's intent to assign or pledge this
Master Lease and/or the rentals due hereunder and Lessee agrees
that no assignee or pledgee of Lessor shall be bound to perform
any duty, covenant or condition, or warranty (express or implied)
attributable to Lessor and Lessee further agrees not to raise any
claim or defense arising out of this Master Lease or otherwise
against Lessor as a defense, counterclaim, or offset to any
action by any assignee or pledgee for the unpaid balance of
rentals due under the Master Lease or for possession of the
Equipment.
(d) Waiver of Indirect Damages. Regardless of
cause, Lessee shall not assert and Lessor shall not be
responsible for any claim whatsoever against Lessor for loss of
anticipatory profits or any other indirect, special, punitive or
consequential damages, nor shall Lessor be responsible for any
damages or costs which may be assessed against Lessee in any
action for infringement of any intellectual property rights of
third parties. Lessor makes no warranty as to the treatment of
this Master Lease, for tax or accounting purposes.
(e) Agency Disclaimer. Notwithstanding any fees
that may be paid by Lessor to a supplier or any agent of a
supplier, Lessee acknowledges that no supplier or any agent of a
supplier is or shall be deemed an agent of Lessor or is
authorized to waive or alter any term or condition of this Master
Lease.
5. Noncancellable Lease. NEITHER THIS MASTER LEASE
NOR ANY LEASE SCHEDULE CAN BE CANCELLED BY LESSEE DURING THE TERM
PROVIDED IN THIS MASTER LEASE. LESSEE'S OBLIGATION TO PAY BASE
RENT AND ADDITIONAL RENT ARE ABSOLUTE.
6. Title, Personal Property. The Equipment is, and
shall at all times remain, Lessor's property, and Lessee shall
have no right, title, or interest therein, except as herein set
forth. If Lessor supplies Lessee with labels indicating that the
Equipment is owned by Lessor, Lessee shall affix such labels to
and keep them in a prominent place on the Equipment. Lessee
shall at its expense protect and defend Lessor's title against
all persons claiming against or through Lessee, at all times
keeping the Equipment free from any legal process or encumbrance
whatsoever including but not limited to liens, attachments,
levies and executions, and shall give Lessor immediate written
notice thereof and shall indemnify Lessor from any loss caused
thereby. Lessee shall execute and deliver to Lessor, upon
Lessor's request, such further instruments and assurances as
Lessor deems necessary or advisable for the confirmation or
perfection of Lessor's rights hereunder.
The Equipment is, and shall at all times be and remain,
personal property notwithstanding that the Equipment or any part
thereof may now be, or hereafter become, in any manner affixed or
attached to real property or any improvements thereon.
7. Care, Use and Location. Lessee, at its own cost
and expense, shall maintain and keep the Equipment in good
repair, condition and working order, and shall use the Equipment
lawfully. At all times during the term of any Lease Schedule
or extensions thereof, upon forty (40) days advance written
notice, the Equipment shall be located at any one or more of the
locations listed on Exhibit B attached hereto; provided, however,
Lessee shall have the right, at any time and from time to time,
to move any item of Equipment to any of Lessee's various
locations. Lessor shall have the right to inspect the Equipment
where it is located at any reasonable time.
8. Redelivery. Upon expiration or earlier
termination of this Master Lease as to any Lease Schedule, Lessee
shall return the Equipment listed in that Lease Schedule, freight
prepaid, to Lessor in good repair, condition, and working order,
ordinary wear and tear resulting from proper use thereof only
excepted, in a manner and to a location reasonably designated by
Lessor. If, upon expiration or termination of this Master Lease
as to any Lease Schedule the Lessee does not immediately return
the Equipment listed in that Lease Schedule to the Lessor, it
shall continue to be held and leased hereunder, and this Master
Lease shall thereupon be extended indefinitely as to term at the
same monthly rental provided in that Lease Schedule, subject to
the right of either party to terminate the Master Lease as to
that Lease Schedule upon 90 days' written notice, whereupon the
Lessee shall forthwith deliver the Equipment to the Lessor as set
forth in this paragraph.
9. Option to Purchase. At the expiration of the term
set forth in each applicable Lease Schedule, notwithstanding the
Redelivery provision set forth in paragraph 8 hereof, Lessor
hereby grants to Lessee the option to purchase all, but not less
than all, Equipment listed on such Lease Schedule. To exercise
such option as to Equipment listed in an applicable Lease
Schedule, Lessee, at least thirty (30) days prior to the
expiration of this Master Lease in respect of such Lease
Schedule, shall advise Lessor in writing of its intent to
purchase all, but not less than all, of the Equipment listed
therein. Lessee shall pay, as the purchase price for such
Equipment ("Purchase Price"), cash in an amount equal to the then
fair market value of the Equipment, which value Lessor and Lessee
agree will not be less than the Minimum Option Percentage times
the Acquisition Value, nor more than the Maximum Option
Percentage time the Acquisition Value, as such terms are defined
in the applicable Lease Schedule and the products of which are
reflected as the Minimum Option Value and Maximum Value on the
applicable Lease Schedule. Fair market value shall be determined
by Lessor in good faith. In the event Lessee does not agree with
the Lessor's calculation of fair market value, Lessee may,
within five (5) days of Lessor's determination, request, in
writing, that the fair market value be determined as Lessee's
cost by a qualified independent appraiser who is not the
manufacturer of the Equipment and is chosen by Lessee. The
decision of the appraiser shall be binding on both parties;
provided, however, Lessee shall not be required to pay greater
than the Maximum Option Value nor permitted to pay less than the
Minimum Option Value.
Such purchase shall be closed within thirty (30) days of the
date of final determination of the Equipment's fair market value
at Lessor's office or as otherwise agreed by the parties. At
closing, Lessee shall pay, in cash, the Purchase Price, any
sales, use or other taxes payable in respect of such purchase and
all accrued and unpaid Base Rent or additional rent. Upon such
payment, the Equipment listed in the applied Lease Schedule shall
be deemed transferred to Lessee at its then location.
10. Risk of Loss. Lessee shall bear all risks of loss of
and damage to the Equipment from any cause; occurrence of such
loss or damage shall not relieve Lessee of any obligation
hereunder. In the event of loss or damage, Lessee, at Lessor's
option, shall: (a) place the damaged Equipment in good repair,
condition and working order; or (b) replace lost or damaged
Equipment with like Equipment in good repair, condition and
working order with documentation creating clear title thereto in
Lessor; or (c) pay to Lessor the then unpaid balances of the
aggregate rent reserved under the Master Lease and applicable
Lease Schedule plus the value of Lessor's residual interest in
the Equipment (based on the Minimum Option Value). Upon Lessor's
receipt of such payment, Lessee and/or Lessee's insurer shall be
entitled to Lessor's interest in said item for salvage purposes,
in its then condition and location, as is, without warranty,
express or implied.
11. Insurance. Lessee shall keep the Equipment insured
against all risks of loss or damage from every cause whatsoever
for not less than the full replacement value thereof, and shall
carry public liability and property damage insurance covering the
Equipment and its use. All such insurance shall be in form and
amount reasonably acceptable to Lessor and consistent with any
requirements imposed on Lessor to by its lenders. The foregoing
notwithstanding, Lessee may elect to self-insure in accordance
with its customary business practices in lieu of obtaining the
insurance required hereunder. If Lessee self-insures, Lessee
shall so notify Lessor, and, in any event, Lessor shall be deemed
an additional insured. If Lessee procures insurance, Lessee
shall deliver a certificate of such insurance to Lessor.
Insurance or self-insurance proceeds shall be applied toward the
replacement, restoration or repair of the Equipment.
12. Indemnity. Lessee shall indemnify and hold Lessor
harmless against, any and all claims, actions, suits, proceedings
costs, expenses, damages, and liabilities, including attorney's
fees, arising out of, connected with, or resulting from the
Equipment or the Master Lease, including without limitation, the
manufacture, selection, delivery, possession, use, operation, or
return of the Equipment.
13. Default and Remedies. If Lessee ceases doing business
as a going concern, or if a petition in bankruptcy, arrangement,
insolvency, or reorganization is filed by or against Lessee and
is not dismissed within sixty (60) days, or if Lessee makes an
assignment for the benefit of creditors, or if on or prior to the
expiration of thirty (30) days after written notice to Lessee
from Lessor of any other breach of this Master Lease (whether
monetary or non-monetary) Lessee fails to cure said breach,
Lessor may exercise any one or more of the following remedies:
(a) To declare the entire balance of rent hereunder
discounted to present value at the then Base Index Rate
immediately due and payable as to any or all Lease Schedules of
Equipment covered hereby.
(b) To sue for and recover all rents, and other monies
due, with respect to any or all items of Equipment listed on any
or all Lease Schedules to the extent permitted by law.
(c) To require Lessee to assemble all Equipment at
Lessee's expense, at a place reasonably designated by Lessor.
(d) Pursuant to applicable law and after demand, to
remove any physical obstructions for removal of the Equipment
from the place where the Equipment is located and take possession
of any or all items of Equipment wherever same may be located,
disconnecting, and separating all such Equipment from any other
property. Lessor may, at its option, use, ship, store, repair,
or lease all Equipment so removed and sell or otherwise dispose
of any such Equipment at a private or public sale.
Lessor may exhibit and resell the Equipment at Lessee's
premises at reasonable business hours without being required to
remove the Equipment. If Lessor takes possession of the
Equipment, Lessor shall give Lessee credit for any sums received
by Lessor from the sale or rental of the Equipment after
deduction of the expenses of sale or rental and Lessor's residual
interest in the Equipment. Lessee shall also be liable for and
shall pay to Lessor all expenses incurred by Lessor in connection
with the enforcement of any of Lessor's remedies, including all
expenses of repossessing, storing, shipping, repairing, and
selling the Equipment. Lessor and Lessee acknowledge the
difficulty in establishing a value for the unexpired Lease term
and owing to such difficulty agree that the provisions of this
paragraph represent an agreed measure of damages and are not to
be deemed a forfeiture or penalty.
If any payment is not made by Lessee within fifteen (15)
days of the date due provided in any Lease Schedule, Lessee
shall pay to Lessor, not later than one month thereafter, an
amount calculated at the rate of five cents per one dollar of
each such delayed payment, but only to the extent allowed by law.
Such amount shall be payable in addition to all amounts payable
by Lessee as a result of exercise of any of the remedies herein
provided.
All of Lessor's remedies hereunder are cumulative, are in
addition to any other remedies provided for by law, and may, to
the extent permitted by law, be exercised concurrently or
separately. The exercise of any one remedy shall not be deemed
to be an election of such remedy or to preclude the exercise of
any other remedy. No failure on the part of the Lessor to
exercise and no delay in exercising any right or remedy shall
operate as a waiver thereof or modify the terms of this Lease.
14. Performance by Lessor of Lessee's Obligations. If
Lessee fails to comply with any provision of this Master Lease
with respect to any Lease Schedule, Lessor may effect such
compliance on behalf of Lessee upon fifteen (15) days' prior
written notice to Lessee. In such event, all monies expended by,
and all expenses of Lessor in effecting such compliance shall be
deemed to be additional rental, and shall be paid by Lessee to
Lessor at the time of the next monthly payment of rent set forth
in such Schedule.
15. Lessee's Assignment; Quiet Enjoyment. Without Lessor's
prior written consent which consent shall not be unreasonably
withheld or delayed, Lessee shall not assign, transfer, pledge,
hypothecate, or otherwise dispose of the Equipment or any
interest therein. Notwithstanding any assignment by Lessor,
providing Lessee is not in default hereunder, Lessee shall
quietly enjoy use of the Equipment, subject to the terms and
conditions of this Master Lease and all Lease Schedules.
16. Notices. Service of all notices under this Master
Lease shall be sufficient if given personally or mailed by first
class U.S. mail postage prepaid to the party involved, Attention:
General Counsel, at its respective address set forth herein, or
at such other address as said party may provide in writing from
time to time. Any such notice mailed to said address shall be
effective when deposited in the United States mail, duly
addressed and with postage prepaid, or personally delivered.
17. Captions. Captions are used in this Master Lease for
convenience only, and are not intended to be used in construction
or interpretation of this Master Lease.
18. Time of Essence. Time is of the essence in this Master
Lease.
19. Entire Agreement; Modification. This Master Lease,
together with any Lease Schedules executed by the parties and
Exhibits A and B, contains the entire agreement between the
Lessor and Lessee. No modification of this Master Lease, or any
Lease Schedule, shall be effective unless in writing and executed
by an executive officer of the Lessor.
20. Non-Waiver. No delay or failure by the Lessor or
Lessee to exercise any right under this Master Lease, and no
partial or single exercise of that right, shall constitute a
waiver of that or any other right, unless otherwise expressly
provided herein. A waiver of default shall not be a waiver of
any other or subsequent default.
21. Governing Law. This Master Lease shall be construed in
accordance with and governed by the laws of the State of
Missouri.
22. Counterparts. This Master Lease may be executed in two
or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
23. Binding Effect. The provisions of this Master Lease
shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, legatees, personal
representatives, successors, and assigns.
IN WITNESS WHEREOF, this Master Lease has been executed as
of the day and year first above written.
LESSOR: LESSEE:
EDJ LEASING CO., L.P. EDWARD D. JONES & CO., L.P.
By: LHC, Inc., By: EDJ Holding Company,
Inc.
General Partner General Partner
By: By:
Name: Name:
Title: Title:
EXHIBIT A
MASTER LEASE # SCHEDULE
WHEREAS EDJ LEASING CO., L.P., a Missouri limited
partnership, 201 Progress Parkway, Maryland Heights, Missouri
63043 ("Lessor") and EDWARD D. JONES & CO., L.P., a Missouri
limited partnership, 201 Progress Parkway, Maryland Heights,
Missouri 63043 ("Lessee") have entered into a certain Master
Lease Number __, dated ___________________, 1994, this Schedule
together with that Master Lease shall be considered a separate
lease pursuant to the terms of the Master Lease and this Schedule
the same as if a single lease agreement containing such terms had
been executed covering the equipment listed herein.
NOW THEREFORE, the parties hereby agree as follows:
1. Equipment - See Attachment 1, made a part hereof.
2. Base Rent -$______ per month. Commencing with the
second monthly payment of Base Rent, the Base Rent provided for
in this Lease Schedule shall be adjusted for any basis point
(.01%) increase or decrease in the Index Rate from the Base Index
Rate which is in effect on the 30th day prior to the applicable
Base Rent due date. The amount of such adjustment shall be
$__________ for each basis point increase or decrease in the
Index Rate. For purposes of this calculation, the "Index Rate"
shall be the prime or base rate of interest designated as such by
__________ Bank, from time to time, and the "Base Index Rate"
shall be the Index Rate in effect as of the date of this Lease
Schedule as forth below.
3. Number of Lease Payments __________
4. Rent Commencement Date ___________
5. Minimum Option Percentage - ___%
6. Maximum Option Percentage - ___%.
7. Acquisition Value: - $________________
8. Minimum Option Value - $_________
9. Maximum Option Value - $_________
10. Base Index Rate ____%
Dated as of _________________________, 19___
LESSOR: LESSEE:
EDJ LEASING CO., L.P. EDWARD D. JONES & CO., L.P.
By: LHC, Inc., General Partner By: EDJ Holding Company,
Inc.,
General Partner
By:_________________________
By:____________________________
Name:______________________
Name:__________________________
Title:_______________________
Title:___________________________
Exhibit 10.37
TEKTRONIX PURCHASE AGREEMENT
Customer: Agreement No.
TD6104
Edward D. Jones & Co., L.P.
201 Progress Parkway Effective Date:
Maryland Heights, MO 63043
Attn.: Richard Unnerstall
Effective as of the date indicated above, Tektronix, Inc.
("Tektronix") and Edward D. Jones & Co., L.P. ("Jones" or
"Customer") agree as follows:
1. SCOPE OF AGREEMENT. This Agreement shall apply to all
Products (as defined in Section 4 below, DEFINITIONS)
hereafter sold or licensed by Tektronix to Customer.
Customer represents that no Products purchased by it under
this Agreement will be purchased by Customer for resale by
Customer unless the Products are Hardware which are
encompassed by a purchase order already submitted by
Customer to Tektronix which thereafter is assigned by
Customer to a Lessor (as defined in Section 27 below,
LEASING). Notwithstanding the foregoing, (a) Customer shall
be permitted to dispose of Products in such manner as
Customer sees fit after Customer no longer desires to use
the Products; however, any Software (as defined in Section 4
below, DEFINITIONS) so disposed of by Customer may only be
transferred by Customer upon prior written permission of
Tektronix and only under license by Tektronix to the
transferee, which Tektronix agrees to enter into with the
transferee for no fee or other consideration, which license
shall contain provisions substantially equivalent to the
license provisions under which Customer has acquired the
Software, and (b) Lessors shall be permitted, without
permission from Tektronix, to dispose of Hardware (as
defined in Section 4 below, DEFINITIONS) and all Software
imbedded therein, to Customer or others, after the lease
between Customer and the Lessor in respect of the Hardware
terminates.
2. SUPPLEMENTS. This Agreement contemplates execution by
Tektronix and Customer of one or more Supplements setting
forth certain particulars with respect to the Products
available for purchase or license such as, without
limitation, discounts and warranties. Upon such execution,
each such Supplement shall become a part of this Agreement.
Accordingly, reference to this Agreement hereafter shall
include reference to the applicable Supplement, if any, to
which Tektronix and Customer are parties. In the event of
any conflict between the terms and conditions of this
Agreement, absent any Supplement, and the terms and
conditions of any Supplement, the terms and conditions of
this Agreement, absent such Supplement, shall control.
3. PARTICIPATION BY AFFILIATES. Any affiliate of Jones
listed in Attachment 1 hereto may, as applicable, purchase
or obtain a license for Products under this Agreement
provided such affiliate agrees to be bound by the terms and
conditions of this Agreement as if named herein in place of
Jones. Submission by an Affiliate (as defined below) of a
purchase order referring to this Agreement by number shall
constitute such agreement by that Affiliate and also that
Affiliate's representation of the same matters, as to that
Affiliate, as to which Jones is giving a representation in
this Agreement. Accordingly, this Agreement contemplates
that Affiliates also may execute Supplements in respect of
Products which may be ordered by the Affiliates,
respectively. All representations and warranties of
Tektronix in this Agreement shall be deemed given and made
by Tektronix to Jones and also to all Affiliates.
Jones represents that each entity listed in Attachment
1 hereto is now an affiliate of Jones (each an "Affiliate").
Jones shall have the right to amend Attachment 1 hereto from
time-to-time by written notice thereof to Tektronix, in
which event Jones shall be deemed at the time to represent
that each new entity listed in such notice is then an
Affiliate of Customer. For the foregoing purposes,
Affiliates means (a) The Jones Financial Companies, a
limited partnership ("Jones Companies"), (b) all entities,
other than Jones, which directly are controlled by Jones
Companies (as is Jones) and/or its general partners, and (c)
all entities which indirectly are controlled by Jones
Companies and/or its general partners including, without
limitation, all entities which directly or indirectly are
controlled by Jones. Also for the foregoing purposes, (d)
control of the general partner(s) of a limited partnership
constitutes control of the partnership, and (e) once an
entity becomes an Affiliate, it thereafter shall continue to
constitute an Affiliate for the purposes of this Agreement,
even if such Affiliate ceases to satisfy the foregoing
definitional criteria of an Affiliate, except that after
such date when such Affiliate ceases to satisfy the
foregoing definitional criteria, such Affiliate may no
longer purchase additional Hardware or license additional
Software. All Affiliates shall be deemed to be third party
beneficiaries of this Agreement.
This Agreement also shall apply to all Products
hereafter sold or licensed by Tektronix to any Affiliate, as
a result of which the ordering Affiliate shall constitute
the Customer under this Agreement in respect of such
Products including, without limitation, regarding the
shipment and delivery of, and invoicing for, such Products
to the ordering Affiliate. However, in all events and under
all circumstances, (e) each Affiliate shall be entitled to
the same prices (including discounts) to which Customer is
entitled under this Agreement, (f) each grant to Customer of
a software license under this Agreement also shall be deemed
to be a grant of such license to Customer and also to all
Affiliates, and (g) each grant to an Affiliate of a Software
license under this Agreement also shall be deemed to be a
grant of such license to Customer and also to all other
Affiliates.
Subject only to the provisions of the next succeeding
paragraph of this Section 4, in all events and under all
circumstances, (h) Jones shall only be responsible and
liable for and in respect of Products purchased or licensed
by Jones under this Agreement, and each Affiliate shall only
be responsible and liable for and in respect of Products
purchased or licensed by that Affiliate under this
Agreement, and (i) a breach of this Agreement by Jones or an
Affiliate, or any other act or omission by Jones or an
Affiliate, shall only constitute the breach, act or omission
by the entity which commits the particular breach, act or
omission. Accordingly, no act or omission of Jones or any
Affiliate shall be attributable to any of the others of them
for any purpose.
Jones hereby guarantees to Tektronix the prompt payment,
when due, of, as applicable, the purchase price or license
fee for which each Affiliate is liable to Tektronix on
account of all Products hereafter, as applicable, sold or
licensed by Tektronix to the particular Affiliate; provided,
however, (j) Jones shall have the right to terminate such
guarantee in respect of a particular Affiliate (either one
or more) by giving written notice thereof to Tektronix, but
such termination shall be prospective only from and after
the date on which such notice is given and shall not be
effective in respect of, as applicable, the purchase price
or license fee for which the Affiliate is liable on the date
such notice of termination is given, and (k) anything
contained in this Agreement to the contrary notwithstanding,
Tektronix thereafter shall not be required to sell or
license any Products to the Affiliate as to which such
notice of termination relates. Notwithstanding the
foregoing, (l) Tektronix may not enforce the foregoing
guarantee against Jones in respect of a payment obligation
of an Affiliate as to which the foregoing guaranty applies
until after that obligation remains unsatisfied by the
Affiliate for a period of at least 30 days, and (m)
Tektronix shall be deemed irrevocably to have waived its
rights against Jones regarding the unsatisfied obligation
unless Tektronix makes written demand upon Jones regarding
the unsatisfied obligation within 120 days after the day on
which the Affiliate became liable to pay the unsatisfied
obligation. To be effective, such a demand shall identify
the defaulting Affiliate and the amount of the unsatisfied
obligation and be accompanies by a copy of the invoice of
Tektronix to the Affiliate which first references the
unsatisfied obligation.
4. DEFINITIONS. "Products" refers to hardware, software,
documentation and services or other products sold or
licensed under this Agreement including, without limitation,
Hardware (as hereinafter defined), Software (as hereinafter
defined) and Distributed Software (as hereinafter defined).
"Hardware" refers to computer hardware offered for sale by
Tektronix including, without limitation, Products identified
on Supplement A hereto, including, without limitation, X-
Terminals, options, accessories, parts and field-installed
options (f-kits). "Software" refers to software products
delivered by any means by Tektronix with Hardware
(including, without limitation, all firmware) or otherwise
developed and delivered by any means, or merely delivered by
any means, by Tektronix including, without limitation, (a)
packaged application software and software supplied
Tektronix in connection with its performance of services and
(b) the XpressWare Software (as defined in Section 1 of
Supplement B) delivered in accordance with Supplement B
hereto. Further, the term "Software" applies to all parts
of Software including, without limitation, object and source
codes, Product authorization keys and new versions, new
releases, updates and modifications of Software if and to
the extent Tektronix provides the same to Customer.
However, Software does not include Distributed Software.
"Distributed Software" refers to third party software
products which are transferred by Tektronix to Customer but
licensed directly to Customer by a third party and
conspicuously identified as Distributed Software. There is
no Distributed Software being licensed to Customer under
Supplement A hereto, Supplement B hereto, or Supplement C
hereto. Nothing in these definitions shall obligate
Tektronix to deliver Hardware other than in accordance with
Supplement A hereto, or Software other than in accordance
with Supplement B or Supplement C hereto.
United States refers to the United States of America,
together with all possession and territories thereof.
Canada refers to the country of Canada as of the date of
this Agreement plus such additional territory as hereafter
may constitute a part of the country of Canada, but not
excluding such portion of the country of Canada, as now
constituted, which hereafter may no longer constitute a part
of Canada
The Products available for, as applicable, purchase or
license under this Agreement are as listed or referenced in
the respective Supplement(s). Tektronix may, in accordance
with the terms of a particular Supplement, from time-to-time
revise the available Products listed on such Supplement(s)
in order to reflect, as applicable, the addition of new
Products (including Alternate Products pursuant to
Supplement B hereto) and the deletion of discontinued
Products. Tektronix represents that all Products sold and
licensed under this Agreement, other than Products exchanged
or otherwise provided under Tektronix' post-warranty repair
programs, will be manufactured from new components unless
the Products are conspicuously identified as modified or
reconditioned Products in the applicable Supplement.
5. ORDERING PERIOD. The period for ordering Products and
the discount(s) for Products under each Supplement shall
begin on the Commencement Date specified in the respective
Supplement and shall end as specified in the respective
Supplement. Such period and discount(s), and the warranties
set forth in the Supplement, shall be for the benefit of, as
applicable, Customer or the Affiliate which executes the
respective Supplement and also for the benefit of all of the
others of them and their respective Lessors which may desire
to purchase Hardware encompassed by the Supplement.
6. DISCOUNT. Terms and conditions concerning discounts
are contained in the respective Supplements. The
discount(s) in effect during each ordering period and the
Products to which the discount(s) apply shall be as
specified in the respective Supplement(s). The discount(s)
granted by this Agreement are noncumulative and are not
combinable with any other discount which may be offered by
Tektronix at that time.
7. PLACEMENT OF ORDERS. To order Products under this
Agreement, Customer and Affiliates shall issue their
respective written purchase orders which reference the
respective Supplement by number. A single purchase order
may be issued to order Products from more than one
Supplement, provided such Products are grouped in such
purchase order according to their respective Supplement.
Such purchase orders also shall specify the model number,
options and quantities of each Product ordered, the
requested shipping dates, shipping destinations and, if
applicable, invoice point. All such purchase orders shall
be submitted to the Tektronix sales office identified in the
respective Supplement, or if no such office is identified in
the respective Supplement, to Tektronix at the address where
it is to receive notices under Section 23 hereof, NOTICES.
The terms and conditions of this Agreement shall govern
all purchase orders to the exclusion of any additional or
different (a) terms on any purchase order, and (b) any
acknowledgment of any such purchase order provided by
Tektronix.
8. PRICES. The price charged for each Product purchased
or licensed under this Agreement will be the price,
documented in a Supplement hereto at the time the Product is
ordered by Customer. In the event of a reduction in any
price as documented by a revised Supplement, the price
charged for the Product shall be the lower of the original
price and the reduced price, determined when the Product is
shipped. This pricing is applicable for all shipments made
to locations within the United States irrespective of
whether the Products are used within or outside the United
States. However, Products shipped within the United States
for use outside the United States must be returned by
Customer to a Tektronix designated repair center in the
United States in the event warranty work is needed. These
prices are not valid for shipments to destinations outside
the United States.
9. SCHEDULING OF SHIPMENTS. Customer may request on its
purchase order a specific shipping schedule, but Customer
may not request that Products be shipped later than the end
of the applicable ordering period for those Products.
Tektronix shall process all purchase orders promptly
following its receipt of them.
Tektronix will schedule shipments for each purchase
order based on Customer's request and Tektronix' shipping
capability at the time Customer's order is processed.
Tektronix will use its best efforts to meet all shipping
dates requested by Customer. Promptly following receipt of
Customer's purchase order, Tektronix will issue to Customer
a formal acknowledgment which will set forth the shipping
dates determined by Tektronix in accordance with the
foregoing. Tektronix also will issue to Customer a revised
formal acknowledgment in respect of rescheduled shipments
pursuant to Section 10 below, RESCHEDULING AND CANCELLATION.
The terms and conditions of this Agreement shall govern
all such acknowledgments to the exclusion of any additional
or different terms on any such acknowledgment.
10. RESCHEDULING AND CANCELLATION. Customer may request
that shipment of Products encompassed by purchase orders be
rescheduled or canceled, in whole or in part, only by
written request submitted to the Tektronix sales office
specified in Section 7 above, PLACEMENT OF ORDERS.
Tektronix may reject a request to reschedule a shipment if
the new schedule does not conform to the requirements of
Section 9 above, SCHEDULING OF SHIPMENTS. Any request to
reschedule or cancel any shipment which is received less
than 30 days before the earlier of (a) the shipping date
requested by Customer in its purchase order, or (b) the
scheduled shipping date set forth in the applicable formal
acknowledgment, may be rejected as untimely or, at the
option of Tektronix, may be accepted subject to payment of a
rescheduling or cancellation charge in the amount of 5% of
the undiscounted price of each affected Product. Tektronix
shall be deemed to accept each such request unless it
notifies Customer to the contrary by written notice given no
later than 10 days after the day on which Tektronix receives
the request. Notwithstanding the foregoing, (c) no
rescheduling or cancellation charge shall be imposed if
Customer does not accept the shipping date for Products set
forth in, as applicable, the original or revised formal
acknowledgment to Customer provided Customer gives Tektronix
written notice thereof at its sales office specified in
Section 7 above, PLACEMENT OF ORDERS, within 10 days after
the day on which Customer receives the formal
acknowledgment, and (d) Tektronix may not reject a request
to cancel a shipment of Products, and Customer shall have
the right to reject Products which have been shipped, if
Tektronix does not ship the Products to Customer within 10
days after the shipping date set forth in, as applicable,
the original or revised formal acknowledgment to Customer.
11. SHIPPING AND DELIVERY. Tektronix will use its best
efforts to ship all Products by the required shipping date,
except that Tektronix will not ship before Customer's
requested shipping dates if Customer's purchase order so
instructs. Tektronix shall not, in any event, be liable for
any delay or failure to deliver resulting from circumstances
which are beyond Tektronix' reasonable control or which
would cause Tektronix to incur unreasonable expense in order
to avoid such delay or to effect timely delivery.
Delivery shall be FOB Tektronix' shipping dock. In the
absence of specific written instructions from Customer,
Tektronix will select the carrier, but Tektronix shall not
thereby assume any additional liability in connection with
the shipment. Tektronix will ship only to destinations
within the United States. Tektronix prices do not include
freight or insurance. If Products are shipped freight
prepaid at Customer's request, Tektronix will bill Customer
for the freight charge actually incurred by Tektronix for
such shipment and, if a shipment is insured by Tektronix at
Customer's request and for Customer's benefit, Tektronix
will bill Customer for the insurance charge actually
incurred by Tektronix for such shipment. These charges
shall be paid by Customer and will be shown as a separate
item, identified as Transportation Services, on invoices.
12. EXPORT RESTRICTIONS. Customer shall neither export nor
re-export, directly or indirectly, any Product purchased or
licensed under this Agreement to any country to which such
export or re-export is restricted by United States law or
regulation without the prior authorization, if required, of
the Office of Export Administration, Department of Commerce,
Washington, D.C.
13. TITLE, RISK OF LOSS, AND SECURITY INTEREST. Subject to
Section 11 above, SHIPPING AND DELIVERY, title and risk of
loss for Products purchased and licensed under this
Agreement shall pass to Customer upon tender of the Products
by Tektronix to the carrier. Tektronix reserves a security
interest in each Product shipped until the entire amount due
therefor has been paid.
14. TAXES. Tektronix prices are exclusive of all state and
local sales, use, excise, privilege and similar taxes. Such
taxes imposed on Tektronix on account of a legal duty of
collection from Customer in connection with the sale,
delivery or use of Products by Customer purchased pursuant
to this Agreement shall be paid by Customer and will appear
as a separate item on each invoice. If sales to Customer
are exempt from such taxes, Customer shall furnish to
Tektronix a certificate of exemption.
15. INVOICES AND PAYMENT. Unless otherwise provided in
this Agreement in respect of particular Products, Tektronix
shall submit an invoice to Customer for each shipment of
Products ordered by Customer at the time of shipment of the
Products. Tektronix shall submit an invoice to Customer for
any rescheduling or cancellation charge whenever such charge
properly is assessed and for any reduction in discount
whenever such adjustment properly is made. All invoices to
Customer for reduction in discount shall be submitted to the
address shown in Section 23 below, NOTICES. All other
invoices shall be submitted to the Customer's invoice point
specified in the respective purchase order. Customer shall
pay the amount invoiced within 30 days from the date the
invoice is deposited in the United States mail, first class
and postage fully prepaid, properly addressed to Customer at
the invoice point designated by Customer in its purchase
order. However, invoices to an Affiliate for reduction in
discount shall be submitted to the Affiliate's address
specified by it in the respective purchase order from the
Affiliate or as the Affiliate otherwise notifies Tektronix
in writing.
Tektronix retains the right to change the credit terms
at any time upon written notice thereof to Customer when, in
Tektronix' reasonable opinion, Customer's financial
condition or record of payment so warrants. Should Customer
become delinquent in the payment of any sum due hereunder,
Tektronix, at its option and upon written notice thereof to
Customer, shall not be obligated to continue performance
under this Agreement until the delinquency is cured.
16. WARRANTY. The Products purchased and/or licensed under
this Agreement are warranted in accordance with this
Agreement, absent any Supplement, and also in accordance
with the applicable warranty statements in the respective
Supplement(s), all of which shall control over any
limitations and reductions in such warranties which may be
provided by Tektronix in any other documentation.
Tektronix will perform any repair or replacement
activity enumerated in any warranty statement(s) attached to
the Supplement(s) and will tender the repaired or replaced
Product to a common carrier for return to Customer within
ten (10) business days after receipt of the defective
Product by Tektronix at one of its service centers in the
United States.
17. SOFTWARE AND SOURCE CODE. Software is being licensed
pursuant to this Agreement including, without limitation,
the license terms forth in Supplement B hereto.
Accordingly, this Agreement (including the license terms set
forth in Supplement B hereto) shall supersede the terms and
conditions of any license and/or agreement which may be
delivered with or otherwise accompany any Software. Source
code to certain Software is being licensed pursuant to this
Agreement including, without limitation, the license terms
set forth in Supplements hereto. Notwithstanding anything
in this Agreement to the contrary except the provisions of
Supplements hereto regarding derivative works, title to
Software and to source code shall remain in Tektronix or in
any third party from whom Tektronix has obtained a licensing
right.
18. INDEMNIFICATION. Tektronix, at its sole cost and
expense, will hereafter at all times indemnify and defend
Jones, all Affiliates, all Third Parties (as defined in
Section 4.2 of Supplement B hereto), all Lessors (but only
to the extent that a Lessor has purchased from Tektronix and
Leased to Jones or an Affiliate a Product subject to a claim
of infringement) and, in each instance, all of their
respective partners, officers, employees, contractors and
agents (collectively, "Indemnified Parties"), and Tektronix
will hold each and all of the Indemnified Parties harmless
from and against, any and all loss or liability including,
without limitation, any and all claims or demands, which the
Indemnified Parties, or any one or more of them, may sustain
or incur as a result of any claim or demand at any time made
against the Indemnified Parties, or any one or more of them,
which is based on an allegation that a Product sold and/or
licensed by Tektronix to any Indemnified Party violates
and/or infringes any intellectual property right of any
third party including, without limitation, any patent,
copyright, or trade secret. Without limiting the generality
of the foregoing, Tektronix will pay any and all resulting
damages, costs and attorneys' and other fees finally awarded
against the Indemnified Parties, or any one or more of them,
that are attributable to such a claim or demand and will pay
the full part of any settlement that is attributable to such
a claim or demand; provided, that (a) the Indemnified Party
seeking indemnification, or another on its (or his or her)
behalf, notifies Tektronix in writing with reasonable
promptness after the Indemnified Party obtains actual
knowledge of the claim or demand, (b) Tektronix is permitted
to control the defense and, if applicable, the settlement of
the claim or demand, and (c) the Indemnified Party
cooperates reasonably in such defense or settlement, but at
Tektronix' sole cost and expense. A failure of (or in
respect of) any Indemnified Party seeking indemnification
regarding any of the foregoing shall not negate Tektronix'
obligations hereunder to that Indemnified Party; rather,
such obligations to that Indemnified Party shall be reduced
to the extent, if any, that such a failure actually
increases Tektronix' obligations hereunder in respect of
that Indemnified Party.
In no event shall any Indemnified Party be required to
seek or otherwise obtain indemnification from Tektronix. All
fees, costs and expenses of Tektronix including, without
limitation, all attorneys', accountants' and expert witness
fees, costs and expenses, which Tektronix sustains or incurs
in satisfying its indemnification obligation to that
Indemnified Party in respect of the claim or demand, and all
of the same which Tektronix sustains or incurs in satisfying
its obligations under this Section 18, shall be borne
entirely by Tektronix, with no right of reimbursement or
contribution by or on behalf of that Indemnified Party or
any other Indemnified Party.
All Indemnified Parties who and which are not parties
to this Agreement shall be deemed third party beneficiaries
of this Agreement for the purposes of such indemnification.
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT
(INCLUDING, WITHOUT LIMITATION, ANY SUPPLEMENT HERETO) TO
THE CONTRARY, THIS SECTION 18 SHALL APPLY TO ANY CLAIM THAT
ANY PRODUCT PURCHASED OR LICENSED UNDER THIS AGREEMENT
INFRINGES ANY INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY
AND NO LIMITATION OF LIABILITY PROVISION SHALL BE APPLICABLE
TO TEKTRONIX' OBLIGATIONS UNDER THIS SECTION 18.
In its defense and/or settlement of any such claim,
Tektronix may, at its sole cost and expense, but without
limiting or diminishing its indemnification obligations set
forth above, (d) procure for the affected Indemnified
Parties the right to continue using the Product, (e) modify
the Product so that it becomes non-infringing, or (f)
replace the Product with an equivalent Product not subject
to such a claim. If the use by Indemnified Party of any
Product sold or licensed hereunder permanently is enjoined
and none of the preceding alternatives is reasonably
available to Tektronix, Tektronix also will provide the
Indemnified Party which paid for the Product an opportunity
to return the Product and receive a refund of the price paid
for the Product less a reasonable allowance for use.
Tektronix shall have no liability to an Indemnified
Party for claims of infringement based solely upon (g) the
use of any Product sold or licensed hereunder by the
Indemnified Party in or in combination with any Product not
sold or licensed by Tektronix, or (h) the use of any Product
sold or licensed hereunder which is modified by the
Indemnified Party, in each instance if, but only if, no
claim of infringement would lie if (i) the Product sold or
licensed hereunder is used only by the Indemnified Party in
combination with any Product sold or licensed by Tektronix,
or (j) the Product is not modified by the Indemnified Party.
The foregoing states the entire obligation and
liability of Tektronix with respect to infringement and
claims and demands thereof.
19. LIMITATION OF LIABILITY. EXCEPT AS PROVIDED IN SECTION
18 ABOVE, INDEMNIFICATION, IN NO EVENT SHALL TEKTRONIX BE
LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, EVEN IF TEKTRONIX HAS ADVANCE NOTICE
OF THE POSSIBILITY OF SUCH DAMAGES. LIKEWISE, IN NO EVENT
SHALL CUSTOMER OR ANY AFFILIATE BE LIABLE FOR ANY INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, EVEN IF
CUSTOMER AND/OR AN AFFILIATE HAS ADVANCE NOTICE OF THE
POSSIBILITY OF SUCH DAMAGES.
20. WAIVER. The failure of Tektronix, Customer or an
Affiliate to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such
provision or the right thereafter to enforce each and every
provision. No waiver by any of term, either express or
implied, or any breach of any them, condition or obligation
of this Agreement shall be construed as a waiver of any
subsequent breach of that term, condition or obligation, or
of any other term, condition or obligation of this
Agreement. All waivers must be in writing and executed by
the party charged with the waiver.
21. ASSIGNMENT. Other than as permitted under Section 27
below, LEASING, regarding purchase orders, neither this
Agreement nor any purchase order submitted under this
Agreement may be assigned or transferred in whole or in part
by either party hereto without the prior written consent of
the other party hereto and/or thereto which is directly
affected thereby. No attempt to assign or transfer in
violation of this provision shall be valid or binding upon
the other party affected thereby.
22. GOVERNING LAW. This Agreement and the rights of the
parties hereunder shall be governed by the laws of the State
of Oregon.
23. NOTICES. Except as otherwise provided in this
Agreement, all notices required or authorized by this
Agreement shall be in writing and shall reference this
Agreement and, if applicable, the applicable Supplement(s)
by number, and shall be deemed effective upon receipt.
Notices to Customer shall be sent to:
Edward D. Jones & Co., L.P.
201 Progress Parkway
Maryland Heights, MO 63043
Attn.: Rich Malone
Notices to Tektronix shall be sent to:
Tektronix, Inc.
P.O. Box 1000
27600 S.W. Parkway
Wilsonville, OR 97070
Attn.: Contract Administration, M/S 60-887
Notices to an Affiliate shall be sent to the Affiliate
at its address set forth on the Affiliate's most recent
purchase order to Tektronix or as the Affiliate otherwise
may advise Tektronix in writing.
Notices to a Lessor shall be sent to the Lessor at its
address set forth on the Lessor's most recent purchase order
to Tektronix or as the Lessor otherwise may advise Tektronix
in writing.
24. DOCUMENTS INCLUDED. The following documents are
included as a part of this Agreement
(a) Attachment 1, Affiliates,
(b) Attachment 2, Assignment,
(c) Supplement A, Product And Pricing Supplement (including
the following attachments thereto, namely:
(i) Attachment 1, Description of Xpress Xchange,
(ii) Attachment 2, Specialized Products, Features and
Specifications, and
(iii) Attachment 3, Hardware Warranty),
(d) Supplement B, Software License & Distribution Supplement
(including the following attachments thereto, namely:
(i) Attachment 1, Description of XpressWare Software,
(ii) Attachment 2, Confidential Information Agreement, and
(iii) Attachment 3, Software Warranty), and
(e) Supplement C, Software Development Supplement (including
Attachment 1 thereto, Confidential Information Agreement),
together with any amendment and/or supplement (including any
attachments thereto) hereafter added to this Agreement as
provided in, as applicable, Section 2 above, SUPPLEMENTS,
Section 3 above, PARTICIPATION BY AFFILIATES and/or Section
4 above, DEFINITIONS.
25. PUBLICITY. Upon execution of this Agreement, the
Tektronix and Customer agree to issue a joint press release
announcing Customer's selection of Tektronix X-Terminals
for its Client/Server project and the signing of a contract
which implements that selection.
26. MISCELLANEOUS.
26.1 Authority. Tektronix represents and warrants that it
has the right to enter into this Agreement and to, as
applicable, sell and license all Products without the
consent of any third party. Customer represents and
warrants that it has the right to enter into this Agreement.
26.2 No Infringement. Tektronix represents and warrants
that any use, copying (with respect to Software and
documentation) and/or act of modification of any Product
which is permitted by this Agreement or at law shall not, in
any way, constitute an infringement or other violation of
any patent, copyright, trade secret, trade dress or other
intellectual property right or other proprietary interest of
any third party.
26.3 No Impairment. Subject to Section 3 of Supplement B,
Tektronix represents and warrants that each Product
including, without limitation, all software embedded or
installed therein, does not (and will not at the time of
delivery) contain any feature which would in any way impair
the operation of the computer system of Jones and/or any
Affiliate (including, without limitation any Product)
including, without limitation, (i) software locks, drop dead
devices, back doors, time bombs, or other software routines
which may disable a computer program automatically with the
passage of time or under the positive control of a person
other than Customer, or (ii) any form of virus, a Trojan
horse, worm or other software routines or hardware
components which may (a) permit unauthorized access or (b)
disable, erase, or otherwise harm software, hardware, or
data. Tektronix further represents and warrants that it
will not impair the operation of Customer's computer system
or the computer system of any affiliate of Customer
(including, without limitation, any Product) in any way for
any reason whatsoever.
26.4 Qualified Personnel. Tektronix warrants that all
services will be of a professional quality conforming to
generally accepted industry standards and practices and
shall be performed timely in a reasonable and workable
manner by qualified professional personnel, consistent with
the standards prevailing in the industry.
26.5 Continuous Representations and Warranties. Except as
otherwise set forth in this Agreement, all representations
and warranties made by Tektronix in this Agreement shall be
deemed first made on the date of this Agreement (and as an
inducement to Customer's execution and delivery of this
Agreement) and they shall run continuously thereafter.
26.6 Defined Terms & Use of Terms. All defined terms used
in this Agreement shall be deemed to refer to the masculine,
feminine, neuter, singular and/or plural, in each instance
as the context and/or particular facts may require. Use of
the terms "hereunder", "herein", "hereby", and similar terms
refer to this Agreement.
26.7 Sales Free and Clear of Liens. All Products sold and
licensed by Tektronix pursuant to this Agreement shall be
free and clear of all liens, encumbrances and security
interests for monies borrowed by Tektronix.
26.8 Entire Agreement; Amendment. This Agreement contains
the entire agreement between the parties hereto relating to
the subject matter contained herein. All prior agreements
and all prior negotiations relating to the same subject are
superseded by this Agreement. Except for the list of
available Products, which may be revised as provided in
Section 4 above, DEFINITIONS, Supplements as provided in
Section 2 above, SUPPLEMENTS, and amendments of Attachment 1
as provided in Section 3 above, PARTICIPATION BY AFFILIATES,
this Agreement may not be modified except by a written
document signed by an authorized representative of each of
Tektronix and Customer. Except for Supplements signed by an
Affiliate which are binding on that Affiliate, this
Agreement may not be amended or modified by an Affiliate.
27. LEASING.
27.1 Leasing of Hardware. Tektronix acknowledges that Jones
and Affiliates hereafter may desire to lease Hardware from
entities (each a "Lessor") with which Jones or the Affiliate
from time-to-time has or intends to have an agreement to
lease Hardware from the Lessor. Accordingly, this Agreement
shall apply in respect of all Hardware (i) ordered by
Lessors on behalf of Jones or an Affiliate pursuant to
Assignments (as hereinafter defined), and (ii) ordered by
Lessors on behalf of Jones or an Affiliates by Lessor's
respective purchase orders to Tektronix. All obligations of
Tektronix under this Agreement to sell Hardware to Jones and
Affiliates also shall be for the benefit of Lessors.
27.2 Assignability of Orders. Tektronix consents to the
assignment by Jones and Affiliates, respectively, as the
assignor, to a Lessor, in whole or in part, of any one or
more purchase orders theretofore submitted by them,
respectively, to Tektronix, provided (i) the assignor
executes an Assignment and Notice of Assignment (each an
"Assignment", which shall be substantively in the form of
Attachment 2 hereto), and (ii) the assignor or Lessor
returns a copy of the executed Assignment to Tektronix.
Accordingly, as among Tektronix, Jones, Affiliates and
Lessors, Tektronix irrevocably agrees to be bound by each
Assignment
27.3 Effect Of Assignment Of Orders. Upon an Assignment but
subject to the terms thereof, the Lessor assignee shall be
deemed prospectively substituted for the assignor as the
party which submitted, to Tektronix, the purchase order(s)
encompassed by the Assignment in respect of all Hardware
encompassed by the Assignment, and such Lessor thereby shall
become the sole purchaser of such Hardware and the party
primarily responsible for paying Tektronix for such
Hardware. Accordingly, title to and risk of loss of such
Hardware shall pass from Tektronix to Lessor (and not from
Tektronix to Jones or an Affiliate) even though, among other
things, such Hardware may be delivered by or for Tektronix
to the assignor. If applicable, the assignor shall remain
the sole submitter to Tektronix of the purchase order(s)
encompassed by the Assignment in respect of (i) all Hardware
encompassed by such purchase order(s) which is not
encompassed by the Assignment, and (ii) all Software
encompassed by such purchase order(s), whether or not such
Software is identified in the Assignment.
27.4 Invoices For Hardware Sold To Lessors. Invoices for
Hardware sold by Tektronix to Lessors shall be submitted to
the purchasing Lessor, with a copy thereof provided by
Tektronix to, as applicable, Jones or the affected Affiliate
at the same time.
27.5 Continuing Liability Of Customer. Subject to Section
27.6 below, the assignor shall remain liable for all of its
obligations under this Agreement in respect of all Hardware
and, if applicable, the Software encompassed by the
Assignment, and such assignor retains all of the benefits of
this Agreement in respect thereof.
27.6 Customer Not Liable For Acts of Lessors. Upon an
Assignment and subject to the terms thereof, the assignor
shall not have any liability to Tektronix on account of any
act or omission of the Lessor assignee, except that, in the
event such Lessor does not fulfill its obligation to pay for
the Hardware encompassed by the Assignment, such assignor
agrees to act as the guarantor of such payment obligation
for the full amount for which such Lessor is so liable
therefor to Tektronix.
27.7 Benefits To Lessors. All representation, warranties,
covenants, agreements, obligations and indemnities of
Tektronix under this Agreement in respect of the Hardware to
be purchased and in-fact purchased by a Lessor from
Tektronix pursuant to an Assignment are made by Tektronix to
and for the benefit of both the assignor and the Lessor
assignee and (i) may be enforced by such assignor and/or
such Lessor during the term of such assignor's lease of such
Hardware from such Lessor and thereafter by such assignor
alone if the assignor purchases such Hardware from such
Lessor. Accordingly, all Lessors shall be deemed to be
third party beneficiaries of this Agreement for all of such
purposes.
27.8 Refunds for Infringement. The Lessor responsible for
paying for infringing Hardware shall be entitled to the full
amount of all refunds for which Tektronix is responsible in
respect of such Hardware pursuant to Section 18 above.
27.9 Continuing Status Of Customer. Notwithstanding an
Assignment, the assignor shall remain the Customer in
respect of all Products encompassed by the Assignment for
all purposes of this Agreement except to the extent set
forth to the contrary above in this Section 27. Likewise,
the Lessor assignee shall constitute the sole Customer in
respect of all Hardware encompassed by the Assignment to the
extent required to give full effect to the foregoing
provisions of this Section 27.
CUSTOMER TEKTRONIX, INC.
By: By:
Authorized Representative Authorized
Representative
Name: Rich Malone Name: Gerald Perkel
Type or Print Type or Print
Title: Principal Title: President,
Network Displays Division
Date: 2-28-95 Date: 2-28-95
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 1
AFFILIATES
See The Jones Financial Companies organization chart, dated
1-18-95, date of receipt from Jones.
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 2
ASSIGNMENT
TO: Tektronix, Inc.
P.O. Box 1000
27600 S.W. Parkway
Wilsonville, OR 97070
_________________ ("Customer") has entered into an agreement
("Agreement", which includes the applicable Supplement(s)
thereto) dated ______________, 1995, with Tektronix, Inc.
("Tektronix") under which, among other things, Customer and
Affiliates may purchase Hardware from Tektronix and licenses
from Tektronix to use Software. The terms and provisions of
the Agreement are incorporated herein for the purposes set
forth below. All defined terms in the Agreement shall have
the same meaning in this Assignment ("Assignment") as are
ascribed to those terms in the Agreement.
As permitted by the Agreement, _____________, the sole
Customer in this Assignment, has entered into or may enter
into one or more agreements with _____________ ("Lessor") by
the terms of which Customer leases (or is to lease) Hardware
from the Lessor and, if applicable, the Lessor is to finance
Customer's payment for the license of Software by Tektronix
to Customer. The address of Lessor is
_________________________________________________________.
Also as permitted by the Agreement, Customer hereby assigns
to Lessor, without recourse by Lessor on Customer,
Customer's right to purchase the following-described
Hardware solely for the initial purpose of leasing such
Hardware to Customer. Such Hardware is some or all of the
Hardware encompassed by existing purchase order(s) of
Customer to Tektronix, namely:
Customer purchase order number ________________
Customer purchase order date ___________________
Hardware encompassed by such purchase order and this
Assignment:
_______________________________________
_______________________________________
_______________________________________
Software encompassed by such purchase order and this
Assignment:
_______________________________________
_______________________________________
_______________________________________
[Repeat the foregoing if assignment involves more than
one purchase order]
Lessor, by accepting this Assignment, agrees to take and pay
for such Hardware subject to the terms and conditions of the
Agreement. Title to and risk of loss of such Hardware shall
pass from Tektronix to Lessor (and not from Tektronix to
Customer) even though such Hardware may be delivered by or
for Tektronix to Customer. Whether or not this Assignment
also encompasses Software, Customer shall be deemed the sole
submitter to Tektronix of such purchase order(s) in respect
of all Software encompassed by such purchase order(s) and,
accordingly, the sole party obligated for, and to be
benefited by, such Software and the license(s) of Tektronix
of such Software (and not Lessor); however, payment by
Lessor for the license(s) in respect of such Software shall
be deemed made on behalf of Customer and thereby discharge
Customer's payment obligation to Tektronix for such Software
license(s).
All representations, warranties, covenants, agreements,
obligations and indemnities of Tektronix under the Agreement
in respect of the Hardware purchased by Lessor from
Tektronix pursuant to this Assignment are made by Tektronix
to and for the benefit of both Lessor and Customer and (a)
may be enforced by Customer and/or Lessor during the term of
Customer's lease of the Hardware from Lessor and thereafter
by Customer alone if Customer purchases the Hardware from
Lessor, and (b) may be enforced thereafter by Lessor and/or
any subsequent owner or lessee of the Hardware, provided,
however, that nothing contained in this Assignment shall be
deemed to expand, extend or otherwise modify any of such
representations, warranties, covenants, agreements,
obligations and indemnities. In no event shall Customer
have any liability on account of a breach by Tektronix of
any of such representations, warranties, covenants,
agreements, obligations or indemnities.
Upon the execution of this Assignment by Customer and its
acceptance by Lessor, Lessor shall be substituted for
Customer as the party purchasing the Hardware encompassed by
this Assignment and, likewise, be and become obligated to
pay Tektronix for the Hardware. Notwithstanding the
foregoing, in the event Customer improperly fails to accept
any Hardware encompassed by this Assignment upon delivery
thereof to Customer by or for Tektronix or Lessor, Lessor or
Tektronix may terminate this assignment as to such Hardware
upon giving ten days' prior notice thereof to, as
appropriate, Tektronix or to Lessor and Customer. Following
such termination, Customer shall assume and thereafter
satisfy all obligations of Lessor under the identified
purchase order(s) for such Hardware and Lessor shall be
fully released from all obligations therefor.
This Assignment shall be binding upon and shall inure to the
benefit of Tektronix, Customer and Lessor and their
respective successors and assigns.
Dated: ____________, 19____.
CUSTOMER:
By
Name
Title
TEKTRONIX PURCHASE AGREEMENT
Supplement A
Product and Pricing Supplement
Customer: Supplement A No.
TD610401
Edward D. Jones & Co., L.P.
201 Progress Parkway TPA Effective Date:
Maryland Heights, MO 63043
Supplement
Commencement Date:
Attn.: Richard Unnerstall
The following terms and conditions are part of the Tektronix
Purchase Agreement ("TPA") identified above, by TPA
Effective Date, between Tektronix, Inc. ("Tektronix") and
the Customer identified above, namely Jones. Capitalized
terms used in this Supplement A which are defined in the TPA
(including other Supplements to the TPA) shall have the same
meaning in this Supplement A as are described to those terms
therein. Use of the term "Customer" in this Supplement A
shall be as provided in the TPA.
1. ORDERING PERIOD. The period for ordering Products
(including Original Products and Alternate Products for all
purposes of this Supplement A) under this Supplement A
("Ordering Period") shall commence on the Supplement
Commencement Date identified above. The Ordering Period for
ordering Products enumerated under Section 3.2.3 and Section
3.2.4 of this Supplement A shall extend for five years from
such Supplement Commencement Date. The Ordering Period for
ordering Products enumerated under Section 3.2.1 and Section
3.2.2 of this Supplement A shall extend for three years from
such Supplement Commencement Date; however, at least sixty
(60) days prior to the expiration of such Ordering Period or
any successive Ordering Period for Products enumerated in
said Section 3.2.1 and Section 3.2.2, such Ordering Period
shall be extended for successive additional one-year
Ordering Periods provided Customer, Affiliates and/or
Lessors provide written notice to Tektronix of their intent
to order, in the aggregate, at least five hundred (500) of
such Products during the next succeeding additional one-year
Ordering Period.
2. ORDER ENTRY POINT. All purchase orders for Products
under this Supplement A shall be submitted to Tektronix,
Inc., P. O. Box 1000, Mail Station 60-337, Wilsonville, OR
97070-1000, Phone Number: 1-800-547-8949, FAX Number: 1-503-
682-3772.
3. PRODUCTS, PLANS, & PRICES; NON-RECURRING ENGINEERING
EXPENSES, AND DEPLOYMENT SCHEDULE.
3.1 The Products available from Tektronix under this
Supplement A during the respective Ordering Periods
("Original Products") and the prices therefor are specified
below in this Article 3. Accordingly, Tektronix agrees to,
as applicable, sell or license to Customer, Affiliates
and/or Lessors, subject to and on the terms and conditions
contained in the TPA, including this Supplement A, at such
prices, that number of Original Products as Customer,
Affiliates and Lessors, respectively, order from Tektronix
from time-to-time during the applicable Ordering Period.
Tektronix may add Products to constitute Original
Products by providing notice thereof to Jones which
describes the added Product(s) and sets forth the price at
which Tektronix agrees to, as applicable, sell or license
each such identified added Product to Customer, Affiliates
and Lessors, respectively. Such added Products shall
constitute Original Products on the day such notice thereof
is given by Tektronix to Jones.
Tektronix may also substitute one or more Original
Products with one or more alternate Products ("Alternate
Products") by providing notice thereof to Jones which
describes the Original Product(s), the Alternate Products
and the price at which Tektronix agrees to sell each such
identified Alternate Product, during the applicable Ordering
Period, pursuant to this Supplement A, provided, however:
(A) The price of an Alternate Product may not
exceed the lower of (i) the price of the corresponding
Original Product, and (ii) the standard price at which
Tektronix is then selling the Alternate Product to other
customer(s) of Tektronix.
(B) The Alternate Product must be at least 100%
functionally equivalent to the Original Product in order
that the Alternate Product will (i) at least meet the
technical specifications for the corresponding Original
Product, and (ii) at least perform all of the functions of
the corresponding Original Product, (it is contemplated that
Alternate Products will be more powerful but offered at a
lesser price).
(C) At the time such notice is given, Tektronix
must provide Jones on loan, free of charge with all freight
charges prepaid, one of each Alternate Product for
evaluation and testing purposes for a reasonable period of
time. Subject to the foregoing, each such loaned Product
shall be deemed to be, as applicable, sold or licensed by
Tektronix to Jones for purposes of the TPA and rights
regarding the Product during the entire period it is in the
possession or under the control of Jones. No such
evaluation or testing by or for Jones or any Affiliate shall
diminish any representations and/or warranties given by
Tektronix in respect of the Product or relieve Tektronix of
any of its obligations on account of any of such
representations and/or warranties. At the end of such
period for evaluation and testing, Jones shall either
purchase from or return to Tektronix the loaned Alternate
Product(s).
(D) In the event Tektronix proposes to delete the
analog Alvin Terminal Hardware Product enumerated in Section
3.2.1 or Section 3.2.2 of this Supplement A, and substitutes
an Alternate Product employing digital technology, which
Tektronix advises Jones does not satisfy the conditions of
subsections (A) and (B) above, Tektronix and Jones agree
that such proposed Alternate Product will be evaluated based
on equivalent technology then currently available at a price
mutually acceptable to Jones and to Tektronix. If Jones
approves such proposed Alternate Product, Jones shall waive
the provisions of subsections (A) and (B) above which
otherwise would have applied to that Alternate Product.
(E) Without the prior written consent of Jones, no
Alternate Product shall constitute an Original Product, as a
substitute for the corresponding Original Product until that
day which is 121 days after the last to occur of (i) the
date on which Jones receives the aforesaid notice in respect
of the Alternate Product and corresponding Original Product,
and (ii) the day on which Customer receives delivery of the
Alternate Product for evaluation and testing purposes as
provided above. Accordingly, Tektronix shall not, without
the prior written consent of Customer, deliver any Alternate
Product to Customer, in lieu of the corresponding Original
Product which is ordered by Customer from Tektronix, at any
time prior to expiration of such 121 day period.
Accordingly, prior to the expiration of such period,
Customer may cancel, in whole or in part, its order for the
Original Product if it does not reasonably appear to
Customer that the foregoing representations and warranties
of Tektronix regarding the Alternate Product are correct or,
in respect of such analog Alvin Terminal Hardware Product,
if Jones does not approve the proposed digital Alternate
Product.
3.2 PRODUCTS.
3.2.1 Alvin Terminal Hardware:
Description Unit
Price
XP300V $ 2,279.00
The XP300V includes the following:
Logic Base: 12 MB Std SIMM Memory
(8 MB add' memory added to std. XP300V 4 MB memory) 2 MB
VRAM; XP300V Opt 25
(capable of driving 256 colors) @ 1280 x 1024
Flash Boot ROM
10-Base-T Ethernet
2 Serial Ports
Alvin Video Components:
Monitor:
17" Color
Capable of 256 colors @ 1280 x 1024
Dot pitch.28 or less
Vertical Refresh Rate 72Hz or more
MPRII Compliant
ISO Standard 9241-3 Compliant
Digital Screen Controls
DB 15HD VGA Connection
Tilt & Swivel Base
3-Button Mouse
SUN - Type 5 Keyboard; XP300V XPFSV
The XP300V, with the features specified above, is designated
for ordering purposes as the X317CVJ.
3.2.2 Other Alvin Hardware:
Description Unit
Price
XP300V Logic Base Only $ 1,604.00
The XP300V Logic Base Only includes the following:
12 MB Std SIMM Memory (8 MB add'l memory added to std. 4 MB
memory); Opt 25
2 MB VRAM (capable of driving 256 colors) @ 1280 x 1024
Flash Boot ROM
10-Base-T Ethernet
2 Serial Ports
3-Button Mouse
Sun-Type 5 keyboard; XPFSV
3.2.3 Applications X-Terminal
Hardware:
Description Unit Price
XP356 X-Terminal
(17", 1280 x 1024, Color)
at the base Unit Price $ 2,063.00
XP358 X-Terminal (19", 1280 x 1024, Color)
at the base Unit Price $ 2,640.00
The following options are offered for XP356 and the XP358 at
the following prices:
Software Option Pack: $ 384.00
VT340 Local Client Opt 3V
DecNet Functionality (includes Motif window manager); Opt 3N
3270 local client; Opt 3Pt
8 MB Memory: Opt 25
Sun-Type 5 Keyboard; XPFSV $ 75.00
Xpress XchangeXP1E3 $ 132.60
(See description in Attachment I to this Supplement A)
3.2.4 Additional Options Available
for X-Terminal Hardware:
Description Unit
Price
Display PostScript Option; Opt SN $ 100.00
4. NON-RECURRING ENGINEERING EXPENSE.
4.1 Tektronix has expended non-recurring engineering
expenses ("NRE") for the development of features of certain
Products, the title to which is and remains with Tektronix,
in order for such Products to meet Jones' specifications.
Such Products, features and specifications are described on
Attachment 2 hereto. Tektronix represents and warrants, and
Jones acknowledges that, as of the effective date of this
Supplement, such Products, including features, meet Jones'
specifications as enumerated in Attachment 2 hereto.
Tektronix and Jones acknowledge and agree that the total
amount for which Jones shall be liable to Tektronix for and
in respect of the NRE is $50,000, Jones agrees to pay such
amount to Tektronix within five days after the XpressWare
Software is delivered by Tektronix to Jones as provided in
Section 1 of Supplement B of the TPA.
4.2 As further consideration for the payment to be paid by
Customer to Tektronix pursuant to Section 4.1 of this
Supplement A, Tektronix shall give a credit of $25 per unit
for the first 2,000 units of Products encompassed by this
Supplement A which are ordered by Jones and shipped by
Tektronix to Jones and also, if and as authorized by Jones,
units of Products which are ordered by Affiliates and
shipped by Tektronix to Affiliates. Such credit shall
result in a reduction in the price for such units.
Tektronix shall maintain sufficient records of such
adjustments to provide Jones with reconciliation detail if
requested.
5. WARRANTY. The Hardware listed in Article 3 of this
Supplement A and also all additional Original Products and
all Alternate Products encompassed by this Supplement,
together with all replacement Products therefor, which
constitute Hardware, are warranted by Tektronix in
accordance with the TPA, this Supplement B and in Attachment
3 to this Supplement B. In the event of a conflict between
Attachment I and Attachment 3 to this Supplement A, Customer
shall have the benefit of the broadest benefit then
available. All Software is warranted in accordance with,
and as provided in, Article 14 of Supplement B to the TPA.
6. DOCUMENTS INCLUDED. The following document is included
as part of this Supplement A:
Attachment 1 - Description of Xpress Xchange
Attachment 2 - Specialized Products, Features and
Specifications
Attachment 3 - Hardware Warranty.
CUSTOMER TEKTRONIX, INC.
By: By:
Authorized Representative Authorized
Representative
Name: Rich Malone Name: Gerald Perkel
Type or Print Type or Print
Title: Principal Title: President,
Network Displays Division
Date: 2-28-95 Date: 2-28-95
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 1 to SUPPLEMENT A
DESCRIPTION OF Xpress Xchange
A. TERM. When ordered by Customer from Tektronix for the
fee enumerated in Supplement A, Xpress Xchange provides the
expedited exchange of defective modules of a Product in
accordance with the further provisions of this Attachment
for the three (3) year period beginning on the date the
Product is shipped by Tektronix to Customer.
B. Xpress Xchange SUMMARY. Tektronix will ship from its
Factory Service Center, in Wilsonville, Oregon, for next-
business-day delivery to Customer, a working module (i.e.,
monitor, logic box, keyboard, mouse, etc.) to replace a
defective module. Xpress Xchange includes hardware
diagnostics and verification of hardware failures via
telephone and telephone assistance for installation of the
exchange module. Xpress Xchange applies to a discrete
identified serial numbered unit of X-Terminal Hardware and
is good for any number of exchanges of that serial numbered
item during the term of Xpress Xchange coverage. Software
assistance is not included in Xpress Xchange.
C. TURNAROUND TIME. Tektronix will use its best efforts
to tender an exchange module, with the serial number of
Customer's existing module being replaced, to an overnight
return carrier the same business day Customer calls the
Tektronix Customer Support Center (1-800-547-8949) provided
Tektronix receives the call before 12 noon, Pacific time,
Monday through Friday, excluding Tektronix holidays;
otherwise, such tender shall take place the next business
day. In the event the exchange module is not tendered to
such carrier within the time specified above, Tektronix will
extend coverage hereunder in respect of the exchange module
for an additional three (3) months at no additional charge
for each business day such tender is delayed. This
extension shall be the sole and exclusive remedy for
Tektronix' failure to meet the represented turnaround time
if such tender takes place within one business day after the
time specified above.
D. SHIPPING CHARGES. Tektronix shall pay for the delivery
of the exchange module to Customer via expedited, overnight
shipment. Customer shall be responsible for packaging and
shipping the defective module to a location designated by
Tektronix, with shipping charges prepaid by Tektronix or
shipping charges collect to Tektronix, provided Customer
returns the defective module via the carrier designated by
Tektronix and Customer uses the packaging which contained
the exchange module.
E. RISK OF LOSS. As between Tektronix and Customer,
Customer shall bear risk of loss or damages to both modules
while in transit from and to Tektronix.
F. MODIFICATION OF PRODUCTS. At the discretion of
Tektronix and only with Customer's prior written approval,
Tektronix may send modified exchange modules to improve
performance or reliability. No additional charge will be
made for this service. Modification or addition of non-
Tektronix devices or accessories to Tektronix modules at
Customer's request, if performed by Tektronix, will be
invoiced at then current time and material rates for parts
and service. In such instance, Tektronix shall not be
obligated to meet stated turnaround time, but the turnaround
time shall be as Tektronix and Customer mutually agree.
G. EXCHANGE MODULES. Tektronix may use new or rebuilt
modules of equal or improved quality to replace exchange
modules. An exchange module may be an alternate model which
shall meet or exceed the specifications of the replaced
module. However, in all events, all replacement modules
shall contain all options and functions of the modules being
replaced. All modules replaced by Tektronix and returned by
Customer to Tektronix shall become the property of
Tektronix.
H. LIMITATIONS.
I. Tektronix shall not be obligated hereunder to: (a)
Replace any module that has been damaged, abused, overused
or misused, as reasonably determined by Tektronix, through
no fault of Tektronix; (b) Replace any module that has
received unauthorized modification, repair or service that
impairs performance or impedes normal service through no
fault of Tektronix; (c) Replace any module for cosmetic
purposes only; (c) Provide any application software support
or any service involving application Hardware; or (d)
Replace any accessories not provided by Tektronix.
II. Any replacement or support identified in H.1. above
which is authorized in advance by Customer after
notification thereby by Tektronix, and thereafter provided
by Tektronix at Customer's request, will be invoiced at
Tektronix' then current rates for parts and time and
material service.
I. OBLIGATIONS OF CUSTOMER. Customer shall ensure that
the site at which the X-Terminal Hardware is located by
Customer meets the environmental specifications therefor
contained in the user manual supplied by Tektronix to
Customer with the X- Terminal Hardware to be exchanged. If
a unit of Customer's Applications X-Terminal Hardware under
Xpress Xchange fails due to operation at a site not meeting
such specifications, Tektronix' obligations hereunder may be
suspended until the site meets such specifications.
J. CUSTOMER PROCEDURES. Upon failure of any X-Terminal
Hardware, Customer shall call the Tektronix Customer Support
Center and identify itself as an Xpress Xchange Customer.
All required information must be provided to Tektronix
during the call. Customer must be in a location serviced by
an air express service. Upon receipt of the exchange
module, Customer must return the defective module within
seven (7) calendar days to the location designated by
Tektronix in the exchange module packaging. Failure to
return the defective module to such location through no
fault of Tektronix may result in Customer being billed the
then current full list price of the exchange module or the
price paid by Customer for the module being replaced,
whichever is lower.
K. OBLIGATIONS OF TEKTRONIX. After Customer information
is received under sub-part "J" above, the Tektronix Customer
Support Center will immediately transfer the call to a
qualified technician. The technician will determine if the
problem is caused by a defective module and if the problem
can be solved by module exchange. If the problem can be
solved by module exchange, Tektronix will notify Customer
and ship an exchange module in accordance with the
foregoing.
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 2 to SUPPLEMENT A
SPECIALIZED PRODUCTS, FEATURES AND SPECIFICATIONS
Tektronix XP350 Data Sheet, document 7/93 11W-7452
Tektronix TekXpress XP300V Analog Video X Terminal Data
Sheet, document 11W-7475 2/94
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 3 to SUPPLEMENT A
HARDWARE WARRANTY
WARRANTY for all Hardware encompassed by Supplement A
Tektronix warrants that the Hardware will be (a) new
(including all components thereof), and (b) be free from
defects in materials and workmanship for a period of one (1)
year from the date of shipment. If any such Hardware proves
defective during this warranty period, Tektronix, at its
option, either will (a) repair the defective Hardware, or
(b) provide new replacement Hardware (including all
components thereof) in exchange for the defective Hardware,
all without charge for parts and labor. The foregoing
warranty regarding defects also shall apply to the repaired
and replaced Hardware, and the period of such warranty shall
be (y) the portion of such one (1) year remaining on the day
the Hardware is shipped by Customer to Tektronix, plus (z)
the period of time from such day to and including the day on
which Customer receives the repaired or replaced Hardware
back from Tektronix. If the replacement Hardware is not the
same as the replaced Hardware, it must be functionally
equivalent to the replaced and otherwise acceptable to
Customer.
In order to obtain service under this warranty, Customer
must notify Tektronix, orally or in writing, of the
existence of the defect before the expiration of the
warranty period and make suitable arrangements with
Tektronix for the performance of service. Customer shall be
responsible for packaging and shipping the Hardware to the
service center reasonably designated by Tektronix which is
located within the continental United States, with shipping
charges prepaid. Tektronix shall return the repaired
defective Hardware or provide the replacement Hardware to
Customer as promptly as reasonably possible after Tektronix
receives the Hardware from Customer and, in all events,
Tektronix will tender the repaired or replaced Hardware to a
common carrier no later than ten business days after the day
on which Tektronix receives the Hardware from Customer. For
Hardware not covered by Xpress Xchange, Tektronix shall pay
for the return of the Hardware to Customer using the same
mode of transportation that Customer used for shipping the
Hardware to Tektronix if shipment is to a location within
the continental United States, and Customer shall be
responsible for paying all shipping charges, duties, taxes,
and any other charges for Hardware returned by Tektronix to
any location outside the continental United States.
Hardware covered by Xpress Xchange will be returned to
Customer in accordance with provisions of Attachment 1 to
Supplement A.
This warranty shall not apply to any defect, failure or
damage caused by improper use or improper or inadequate
maintenance and care. Tektronix shall not be obligated to
furnish service under this warranty (a) to repair damage
resulting from attempts by personnel other than Tektronix
representatives or designees to repair or service the
Hardware, (b) to repair damage resulting from improper use
or connection to incompatible equipment, or (c) to service a
Hardware that has been modified or integrated with other
products with which the Hardware customarily is not used
when the effect of the modification or integration
significantly increases the time or difficulty of servicing
the Hardware.
EXCEPT AS OTHERWISE PROVIDED IN THIS SUPPLEMENT A (INCLUDING
THIS ATTACHMENT THERETO) OR IN THE TPA (ABSENT THIS
SUPPLEMENT A), INCLUDING (AS AN EXCEPTION) THE WARRANTIES
THEREIN SET FORTH, (1) THE ABOVE WARRANTIES ARE GIVEN BY
TEKTRONIX WITH RESPECT TO THE HARDWARE ENCOMPASSED BY
SUPPLEMENT A IN LIEU OF ANY OTHER WARRANTIES, EXPRESS OR
IMPLIED, (2) TEKTRONIX AND ITS VENDORS DISCLAIM ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, (3) TEKTRONIX' RESPONSIBILITY TO REPAIR OR REPLACE
DEFECTIVE HARDWARE IS THE SOLE AND EXCLUSIVE REMEDY PROVIDED
TO THE CUSTOMER FOR BREACH OF THIS WARRANTY, AND (4)
TEKTRONIX AND ITS VENDORS WILL NOT BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES IN
RESPECT OF SUCH HARDWARE, IRRESPECTIVE OF WHETHER TEKTRONIX
OR THE VENDOR HAS ADVANCE NOTICE OF THE POSSIBILITY OF SUCH
DAMAGES.
TEKTRONIX PURCHASE AGREEMENT
Supplement B
Software License & Distribution Supplement
Customer: Supplement B to
Agreement
TD6104
Edward D. Jones & Co., L.P.
201 Progress Parkway TPA Effective Date:
Maryland Heights, MO 63043
Supplement
Commencement Date:
Attn.: Richard Unnerstall
The following terms and conditions are part of the Tektronix
Purchase Agreement ("TPA") identified above, by TPA
Effective Date, between Tektronix, Inc. ("Tektronix") and
the Customer identified above, namely Jones. Capitalized
terms used in this Supplement B which are defined in the TPA
(including other Supplements to the TPA) shall have the same
meaning in this Supplement B as are ascribed to those terms
therein the TPA.
1. DELIVERY OF XPRESSWARE SOFTWARE OBJECT CODE.
1.1 Within ten days after the TPA Effective Date, Tektronix
shall deliver to Jones one master copy of the most current
commercial release of XpressWare version 7.0 for the Intel
x86 processor, in object code form only, including, without
limitation, the local analog video window ("Local Analog
Video Window") and the motif local window manager
(collectively, "XpressWare Software"). Such master copy
shall be on CD-ROM media or such other media as Jones and
Tektronix shall mutually agree. The XpressWare Software is
described in more detail in Attachment 1 to this
Supplement B.
1.2 The cost of such master copy and of all additional
master copies which Jones and Affiliates may order from
Tektronix is $500 per master copy media, and Tektronix may
render an invoice for the master copy media on or after the
day on which Tektronix ships the master copy media to, as
applicable, Jones or the Affiliate which orders the master
copy media.
1.3 Jones acknowledges that Tektronix has previously
delivered an evaluation copy of XpressWare Software and
related documentation and materials to Jones. Execution of
this Supplement B by Jones constitutes Jones' acceptance of
XpressWare Software. However, such acceptance shall not
constitute a waiver of any warranty in respect thereof or of
any of Tektronix' other obligations under the TPA or this
Supplement B, and Jones' rights and Tektronix' obligations
under Attachment 3 to this Supplement B in respect of
XpressWare Software shall begin on the TPA Effective Date.
2. DELIVERY OF CERTAIN SOURCE CODE.
2.1 Within five business days after the later to occur of
(a) the TPA Effective Date, and (b) delivery of the
Confidential Information Agreement (as defined in Section
2.2 below) by Jones to Tektronix, Tektronix shall deliver to
Jones the source code for the Local Analog Video Window
portion of the XpressWare Software along with all related
source code tools (collectively, "Licensed Video Source
Code"; as used herein, the term "Licenses Video Source Code
also includes all updates to the Licensed Video Source Code
which may be provided by Tektronix to Jones).
2.2 Tektronix considers the Licensed Video Source Code to
be confidential and proprietary, and will only release it to
Jones upon the execution by Jones, and delivery by Jones to
Tektronix, of an agreement ("Confidential Information
Agreement") in the form of Attachment 2 to this
Supplement B.
2.3 In the event Jones desires to allow any Third Party or
any Affiliate to have access to the Licensed Video Source
Code, Jones shall have such Third Party and Affiliate, as
the case may be, execute a separate Confidential Information
Agreement substantively equivalent to Attachment 2 to this
Supplement B, but modified in all proper respects to reflect
the relationship between Jones and, as applicable, the Third
Party or Affiliate. Jones shall have the right to allow, as
applicable, the Third Party or the Affiliate to have access
to the Licensed Video Source Code, but only to utilize it
for Jones and/or Affiliate(s) as Jones determines, after
such Confidential Information Agreement is executed by, as
applicable, the Third Party or the Affiliate, and is
provided to Tektronix.
3. USE OF SOFTWARE. Tektronix represents, and Customer
acknowledges, that the XpressWare Software contains a
variety of programs which may be used in conjunction with
Hardware supplied by Tektronix (such as, without limitation,
the XP356 X-Terminal and the XP358 X-Terminal, both of which
Customer may order pursuant to Supplement A to the TPA).
Tektronix further represents, and Customer further
acknowledges, that the Software contained in certain items
of Hardware may contain software locks which do not allow
the particular item of Hardware to utilize certain functions
of the XpressWare Software. Accordingly, before any
particular items of Hardware are delivered to Customer,
Tektronix agrees to disable all software locks relating to
functions and/or programs which Customer has ordered. For
example, each XP356 X-Terminal and each XP358 X-Terminal
delivered pursuant to Supplement A to the TPA shall be
delivered with the appropriate software locks disabled in
order that Customer fully can utilize the Software
enumerated in Supplement A to the TPA (such as, without
limitation, the DecNet functionality software) with each
such X-Terminal. Tektronix further agrees that it shall not
enable any software locks after the delivery of any Product.
4. LICENSE GRANT.
4.1 Tektronix hereby grants to Jones, to all Affiliates and
to all Third Parties (as defined below) a fully paid-up
royalty free right and license perpetually to use, merge,
copy, modify, and distribute (a) Software, excluding all
source code other than source code which is to be provided
under Section 2 of this Supplement B, but including, without
limitation, Software which may contain any Derivative Work
(as defined below), and (b) documentation related to such
Software including, without limitation, installation and
other manuals, in all instances in the United States and
Canada subject at all times to the terms and conditions of
this Supplement B.
4.2 For all purposes, the term "Third Parties" means those
entities (a) the identity of which shall be designated in
writing by Jones to Tektronix from time-to-time, which have
a contractual agreement with Jones to develop, manufacture,
assemble, test and/or sell Systems (as hereinafter defined),
and matters incidental thereto, to and for Jones, and/or (b)
which provide maintenance or other services for any hardware
and/or software of or used by Customer or any other Third
Party. Each Third Party shall continue to qualify as, and
constitute, a Third Party during the entire period, and only
during the period, the Third Party is, as applicable, (y)
authorized by Jones to develop, manufacture, assemble, test
and/or sell Systems for and to Jones, and/or (z) engaged to
provide such maintenance services.
4.3 For all purposes, the term "System" means a file server
system which is intended to interface, via the computer
network of Jones and/or Affiliates, with some or all of the
other computer hardware and/or software of Jones and/or
Affiliates located at the business headquarters and/or
branch offices of Jones and Affiliates, respectively, and
other locations as, as applicable, Jones and Affiliates
require from time-to-time, and shall also include all such
file server systems which are (a) developed, manufactured,
assembled, tested and/or sold by any Third Party to or for
Jones, or (b) developed, manufactured, assembled and/or
tested by Jones for itself.
4.4 To the extent not encompassed by Section 4.1 above,
Jones may sell and otherwise distribute Systems to
Affiliates, and Affiliates may sell and otherwise distribute
Systems to other Affiliates and to Jones.
5. DERIVATIVE WORKS.
5.1 To the extent not encompassed by Section 4.1 above,
Tektronix hereby grants to Jones, to all Affiliates and to
all Third Parties a fully paid up royalty free, perpetual,
nonexclusive, nontransferable license in the United States
and Canada:
a.to copy and use the Licensed Video Source Code in
order to create derivative works ("Derivative Works") (the
object code of Derivative Works being hereafter referred to
as "Host Video Object Code"); and
b.to use, reproduce and distribute copies of the Host
Video Object Code in connection with the use, reproduction
and distribution of Derivative Works internally, to
Affiliates and to Third Parties, all of whom shall be
permitted also to use and reproduce such copies, however
Jones may not license Derivative Works to parties other than
Affiliates or Third Parties without the prior written
consent of Tektronix, which shall not unreasonably be
withheld. Tektronix shall impose no fee as a condition for
granting such consent.
5.2 As between Tektronix, on the one part, and Jones,
Affiliates and Third Parties, on the other part, all
Derivative Works (including, without limitation, all
intellectual property rights thereto) shall be owned
exclusively by Jones and Affiliates, as applicable.
6. COPYRIGHT NOTICES. If Customer copies Software or
Licensed Video Source Code, all copies thereof distributed
under this Supplement B shall contain any copyright notice
and any proprietary legend embedded electronically therein
as delivered by Tektronix to Jones.
7. SECURITY MEASURES AND DEVICES. Customer may not
disable any security measures unless the protected function
was ordered by Customer and Tektronix did not, as required,
disable the security measures prior to delivery of the
Software to Customer.
8. MODIFICATION OF DOCUMENTATION. Customer may modify
documentation as desired to conform to Customer standards
and may reproduce the documentation as reasonably necessary
to support the authorized distribution of the Software
provided that each copy made by Customer includes a
reproduction of any copyright notice of Tektronix appearing
in or on the documentation as received from Tektronix by
Jones.
9. LICENSE AND EXPORT RESTRICTIONS. Customer may not
license or distribute the Software for use outside the
United States or Canada when (a) export or re-export,
directly or indirectly, is restricted by United States law
or regulation, and (b) export is to a country where software
of the type licensed by Customer with respect to this
Supplement B is not protected by copyright or written
license agreement.
10. RESTRICTED DISCLOSURE; PROTECTION.
10.1 Customer shall take appropriate action to ensure that
any person permitted access to the Software does not
disclose or duplicate it in contravention of this
Supplement B.
10.2 Before recycling or discarding any media containing
the Software, Customer shall use reasonable efforts to erase
or otherwise destroy the Software contained therein.
10.3 Neither Customer nor any Affiliate may reverse compile
or disassemble the Software for any purpose.
11. CORRECT AND USABLE SOURCE CODES. Tektronix represents
and warrants that the Licensed Video Source Code delivered
to Customer under this Agreement and/or under any
maintenance agreement, in each instance shall be (a) the
actual source code for the version of the Software that
Customer is then using, (b) written exclusively in the "C"
programming language, and (c) well documented and written in
such a way that a computer programmer of reasonable skill
readily can understand it. Without limiting the generality
of the foregoing, Tektronix further represents and warrants
that the Licensed Video Source Code contains all of the
source code necessary for a reasonably skilled computer
programmer to develop a host-based version of the Tektronix
Local Analog Video Window. Subject to the foregoing, THE
LICENSED VIDEO SOURCE CODE IS PROVIDED "AS IS" WITHOUT
WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED. TEKTRONIX
DISCLAIMS SPECIFICALLY THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
12. THIRD PARTY LICENSES. Except as expressly agreed
otherwise, third parties from whom Tektronix may have
obtained or hereafter may obtain a licensing right do not
warrant the Software of such third parties, do not assume
any liability with respect to its use, and do not undertake
to furnish any support or information relating thereto. The
foregoing shall not, however, diminish any obligations of
Tektronix in respect of such Software.
13. SOFTWARE MAINTENANCE & CONSULTATION.
13.1 SOFTWARE MAINTENANCE: Subject to renewal pursuant to
Section 13.4 below, for a period of one (1) year commencing
on the TPA Effective Date, Tektronix shall provide Jones and
Affiliates with maintenance services for the XpressWare
Software ("Software Maintenance"), which shall be
independent of Tektronix' obligations under Section 13.2
below. The annual charge for Software Maintenance is
$50,000. On or after the TPA Effective Date, Tektronix
shall render Jones an invoice in such amount for Software
Maintenance during such period. Software Maintenance shall
include, without limitation, (a) timely providing bug-fix
services in respect of the XpressWare Software (including,
without limitation, the repair of bugs discovered by Jones
and/or an Affiliate and which Jones and Tektronix mutually
agreed adversely affect Jones.) (collectively, "Bug Fix
Services"), and (b) on or before the commercial release by
Tektronix of each version of XpressWare Software subsequent
to version 7.0, provide Jones with one master copy, on CD-
ROM media or such other media as Jones and Tektronix shall
mutually agree, of the commercial version of the release in
object code form, for purposes of evaluating the version,
together with all related documentation and other materials.
Jones shall have a period of sixty (60) days after Jones'
receipt of each such version to evaluate such new version
and either (y) accept such version by written notice thereof
to Tektronix, or (z) reject the version by written notice
thereof to Tektronix and by returning the master copy on
which the version was delivered to Jones, if any, to
Tektronix together with all related documentation and other
materials, if any, which Jones received from Tektronix
related to such version. Tektronix shall not be obligated
to provide Software Maintenance consulting on any Software
other than that delivered by Tektronix to Customer. Further
with respect to the foregoing:
13.1.1 If Jones accepts the version, (a) promptly after
such acceptance, Tektronix shall provide Jones with the
source code for the updated Local Analog Video Window if any
accepted version includes an update to the Local Analog
Video Window, (b) such acceptance shall not constitute a
waiver of any warranty in respect thereof or of any of
Tektronix' other obligations under the TPA or this
Supplement B, and (c) Jones' rights and Tektronix'
obligations under Attachment 3 to this Supplement B in
respect of the version shall extend from the day on which
Jones receives the version from Tektronix to that day which
is ninety (90) days after the day on which Jones accepts the
version in the manner set forth above.
13.1.2 If Jones accepts the version, Jones and Affiliates
may order additional master copies of the accepted version
and of all previously accepted versions at a cost of $500
per master copy, and Tektronix may render an invoice for
each such master copy on or after the day on which it is
delivered by Tektronix to, as applicable, Jones or the
Affiliate which orders the master copy.
13.1.3 If Jones rejects the version, (a) Jones shall delete
the version, together with any and all copies thereof made
by Jones, from all of Jones' computer systems, (b)
thereafter, during any period when Jones is covered by
Software Maintenance, Tektronix still shall be required to
provide Jones with each subsequent version of XpressWare
Software for evaluation purposes in accordance with the
foregoing, together with (i) one commercial version of all
versions previously rejected by Jones which are required in
order for Jones properly to evaluate and use the subsequent
version and (ii) all documentation and other materials
related to each such version, and (c) the foregoing rights
and obligations of Tektronix and Jones, respectively,
regarding or resulting from, as applicable, acceptance and
rejection by Jones shall apply, as a whole, to and in
respect of the subsequently supplied version and all of such
previously rejected versions.
13.2 HELP-DESK CONSULTATION: Subject to renewal pursuant
to Section 13.4 below, for a period of one (1) year
commencing on the TPA Effective Date, Tektronix shall
provide Jones and Affiliates with software help-desk
consultation services for XpressWare Software and subsequent
versions of XpressWare approved for use by Jones ("Help-Desk
Consultation"), which shall be independent of Tektronix'
obligations under Section 13.1 above. The annual charge for
Help-Desk Consultation is $3,000. On or after the TPA
Effective Date, Tektronix shall render Jones an invoice in
such amount for Help-Desk Consultation during such period.
Tektronix' obligations with respect to Help-Desk
Consultations shall include the following:
13.2.1 Tektronix shall maintain a sufficient number of "800
number" telephone lines, staffed with a sufficient number of
persons with appropriate expertise, in order for Jones and
Affiliates readily to obtain consulting services from
Tektronix' software engineers on issues related to the
XpressWare Software.
13.3 Help-Desk Consultation in respect of each version of
XpressWare Software shall terminate five (5) years after the
day on which Tektronix commercially releases a subsequent
version of XpressWare Software. Bug Fix Services in respect
of each version of XpressWare Software shall terminate one
(1) year after the day on which Tektronix commercially
releases a subsequent version of XpressWare Software.
13.4 During the final ninety (90) days of the first and
each subsequent annual period during which, as applicable,
Tektronix is to provide Software Maintenance (in accordance
with Section 13.1 hereto) and/or Help-Desk Consultation (in
accordance with Section 13.2), Tektronix shall give Jones
written notice of the pending expiration of the applicable
service, and Jones may renew either or both of such services
at the same rates for an additional one (1) year period by
issuing one or more purchase orders therefor to Tektronix
within thirty (30) days after the day on which Jones
receives such notice. Each such purchase order shall
identify the services then being ordered by Jones.
Tektronix shall (a) be required to accept each such order,
and (b) render Jones an invoice in such amount for the
ordered services on or after the first day of the annual
renewal period.
14. WARRANTY. The Software identified or referenced in
Supplement A or this Supplement B, together with all
replacements therefor, are warranted in accordance with the
TPA and in Attachment 3 to this Supplement B, respectively.
In addition, the XpressWare 7.0 is warranted to conform to
the description and specifications thereof in Attachment 1
to this Supplement B.
15. DOCUMENTS INCLUDED. The following documents are
included as part of this Supplement.
Attachment 1 - Description of XpressWare Software
Attachment 2 - Confidential Information Agreement
Attachment 3 - Software Warranty
CUSTOMER TEKTRONIX, INC.
By: By:
Authorized Representative Authorized
Representative
Name: Rich Malone Name: Gerald Perkel
Type or Print Type or Print
Title: Principal Title: President,
Network Displays Division
Date: 2-28-95 Date: 2-28-95
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 1 to SUPPLEMENT B
DESCRIPTION OF XPRESSWARE SOFTWARE
Tektronix XpressWare X Terminal Software Data Sheet,
document 11/94 LIT#11W7462
Tektronix XpressWare X Terminal Software Multimedia Release
V7.0, document 11W-7504 8/94
Tektronix Reference manual, TekXpress Family of X Terminals,
document 070-8418-07, JUL. 1994
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 2 to SUPPLEMENT B
CONFIDENTIAL INFORMATION AGREEMENT
Customer: Edward D. Jones & Co., L.P.
201 Progress Parkway
Maryland Heights, MO 63043
Subject: Source code for the Local Analog Video Window
portion of the XpressWare Software along with all related
source code tools (collectively, "Licensed Video Source
Code")
Purpose of Disclosure
by Tektronix, Inc.
("Tektronix"):To Facilitate Customer's development of
Derivative Works (as such term is defined in Supplement B to
the Tektronix Purchase Agreement between Tektronix and
Customer dated ______________, 1995 ("TPA"))
Effective Date:
____________________, 199___
1. Customer hereafter is to acquire the Licensed Video
Source Code, which Tektronix considers to be confidential
and proprietary. Tektronix desires to share the Licensed
Video Source Code solely for the purpose stated above.
2. Subject to the further provisions of this agreement, in
consideration of the opportunity to receive the Licensed
Video Source Code, Jones agrees not to use the Licensed
Video Source Code except in support of the stated purpose.
Unless otherwise agreed to in writing, Customer further
agrees not to disclose the Licensed Video Source Code to any
third party. Subject to the further provisions of this
agreement, Customer agrees to protect the Licensed Video
Source Code with at least the same degree of care as it
normally exercises to protect its own confidential
information of like character and importance, but in no
event less than reasonable care in accordance with generally
accepted standard in the software industry. Notwithstanding
the foregoing, Jones may disclose the Licensed Video Source
Code to a Third Party (as such term is defined in said
Supplement B) following the execution by the Third Party of
a Confidential Information Agreement substantially
equivalent to this agreement, but modified in all proper
respects to reflect the relationship between Customer and
the Third Party.
3. The restrictions and obligations imposed by this
agreement shall not apply to the Licensed Video Source Code,
or any component thereof, that:
A. Is lawfully or
otherwise properly known by Customer at the time of
disclosure by Tektronix to Customer;
B. Is or becomes,
through no fault of Customer, generally available to the
general public;
C. Is independently
developed by Customer, a Third Party or an Affiliate (as
such term is defined in the TPA) without use of the Licensed
Video Source Code;
D. Is lawfully or
otherwise properly received by Customer from a third party
who does not have an obligation of confidentiality to
Tektronix;
F. Is disclosed by
Customer with the written approval of Tektronix; or
G. Is disclosed by
Tektronix to a third party free of restriction.
Notwithstanding the foregoing, (i) in the case of events
described in (B), (C), (D), (E) and (F) above, the
restrictions and obligations imposed by this agreement shall
apply and be effective until occurrence of the described
event, but shall cease to apply and be effective from and
after the occurrence of the event, and (ii) notwithstanding
the foregoing, in all events all restrictions and
obligations imposed by this agreement shall end ten (10)
years from the effective date of this agreement set forth
above.
4. The Licensed Video Source Code shall remain the
property of Tektronix and shall, together with all copies
thereof, be returned by Jones to Tektronix if Jones commits
a material breach of this agreement, following demand
therefor given by Tektronix to Jones.
5. Anything contained in this agreement to the contrary
notwithstanding, Tektronix acknowledges that no Derivative
Work will be considered Licensed Video Source Code or any
component thereof. Tektronix further acknowledges that all
Derivatives Works (including, without limitation, all
intellectual property rights thereto) shall be owned
exclusively by Jones and Affiliates, as applicable, and
Tektronix shall have no ownership right or interest therein.
6. Neither the execution and delivery of this agreement
nor the disclosure of the Licensed Video Source Code by
Tektronix to Customer shall be construed as granting by
implication, estoppel or otherwise, any right in or license
under any present or future invention, trade secret,
trademark, copyright, or patent now or hereafter owned or
controlled by Tektronix.
7. This agreement shall be governed by the laws of the
State of Oregon.
8. This agreement (together with said Supplement) contains
the entire understanding relative to the protection of the
Licensed Video Source Code covered by this agreement and
supersedes all prior and collateral communications, reports
and understandings, if any, between Tektronix and Customer
regarding the Licensed Video Source Code.
CUSTOMER:
EDWARD D. JONES &
CO., L.P.
By:
Authorized
Representative
Name:
Type or Print
Title:
Type or Print
Date:
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 3 to SUPPLEMENT B
SOFTWARE WARRANTY
WARRANTY for Software
Tektronix warrants that the Software including, without
limitation, enhancements and updates, will conform to the
published specifications and/or other documentation provided
by Tektronix to Customer when the Software properly is used
in an appropriate operating environment, for a period of
three (3) months. The warranty period begins on the date of
shipment, except that if the Software is installed by
Tektronix, the warranty period begins on the date of
installation or one month after the date of shipment,
whichever is earlier. A new warranty period begins on the
date of delivery of any new versions, releases,
enhancements, updates and/or modifications to any Software.
If this Software does not conform as warranted, Tektronix
will provide a conforming replacement in exchange for the
defective Software. Tektronix does not warrant that the
functions contained in the Software will meet Customer's
requirements or that operation of the programs will be
uninterrupted or otherwise error-free.
In order to obtain service under this warranty, Customer
must notify Tektronix, orally or in writing, of the
existence of the defect before the expiration of the
warranty period. If Tektronix is unable, within a
reasonable time after receipt of such notice, to provide
remedial services (which may including, without limitation,
a conforming replacement), Customer may terminate the
license for the Software and return the Software and all
associated materials shipped with the Software for, as
determined by Customer, an immediate full credit or refund.
This warranty shall not apply to any Software that has been
modified or altered by Customer if the modification or
alteration adversely affects performance of the Software,
and if such is the case, this warranty shall apply following
removal of the modification or alteration.
EXCEPT AS OTHERWISE PROVIDED IN THIS SUPPLEMENT B (INCLUDING
THIS ATTACHMENT THERETO) OR IN THE TPA (ABSENT THIS
SUPPLEMENT B), INCLUDING (AS AN EXCEPTION) THE WARRANTIES
THEREIN SET FORTH, (1) THIS WARRANTY IS GIVEN BY TEKTRONIX
WITH RESPECT TO SOFTWARE IN LIEU OF ANY OTHER WARRANTIES,
EXPRESS OR IMPLIED, (2) TEKTRONIX AND ITS VENDORS DISCLAIM
ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND (3) TEKTRONIX AND ITS VENDORS WILL
NOT BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES IRRESPECTIVE OF WHETHER TEKTRONIX OR
THE VENDOR HAS ADVANCE NOTICE OF THE POSSIBILITY OF SUCH
DAMAGES.
TEKTRONIX PURCHASE AGREEMENT
Supplement C
Software Development Supplement
Customer: Supplement C to
Agreement TD6104
Edward D. Jones & Co., L.P.
201 Progress Parkway TPA Effective
Date:
Maryland Heights, MO 63043
Supplement
Commencement Date:
Attn.: Richard Unnerstall
The following terms and conditions are part of the Tektronix
Purchase Agreement ("TPA") identified above, by TPA
Effective Date, between Tektronix, Inc. ("Tektronix") and
the Customer named above, namely Jones. Capitalized terms
used in this Supplement C which are defined in the TPA
(including other Supplements to the TPA) shall have the same
meaning in this Supplement C as are ascribed to those terms
therein.
ENGINEERING CONSULTATION SERVICES. Upon Jones' request,
Tektronix will provide Jones, Affiliates and Third Parties
with engineering consultation to assist in the development
of Host Video Object Code using the Licensed Video Source
Code. The price of such consultation shall be $100 per
hour, pro-rated for any fraction thereof, for the first 20
hours or fraction thereof. For additional hours, the price
of such consultation shall be $195 per hour, pro-rated for
any fraction thereof. Prior to Tektronix providing such
initial engineering consultation, Jones shall issue a
purchase order to Tektronix for no less than 20 hours of
consultation time. Tektronix shall render an invoice for
such services no more frequently than monthly and, to be
effective, the invoice must be accompanied by an
itemization, by identified day, of the number of hours
expended on the day and the services performed on the day.
CONFIDENTIAL INFORMATION AGREEMENT. Tektronix
acknowledges that the information and documents which are
provided to Tektronix in anticipation of, and/or in
connection with, the performance by Tektronix of such
services is, and is considered by, as applicable, Jones
and/or Affiliates, to be confidential and proprietary, and
that such information and documents only would be released
to Tektronix if Tektronix executes and delivers to, as
applicable, Jones and/or Affiliates, an agreement
("Confidential Information Agreement") in the form of
Attachment 1 to this Supplement C, but, if applicable,
modified in all respects properly to include reference to
Affiliate(s). Tektronix agrees to execute and deliver the
Confidential Information Agreement to Jones when requested
for the stated purpose.
DOCUMENTS INCLUDED. The following document is included
as part of this Supplement.
Attachment 1 - Confidential Information Agreement
CUSTOMER TEKTRONIX, INC.
By: By:
Authorized Representative Authorized
Representative
Name: Rich Malone Name: Gerald Perkel
Type or Print Type or Print
Title: Principal Title: President,
Network Displays
Division
Date: 2-28-95 Date: 2-28-95
TEKTRONIX PURCHASE AGREEMENT
ATTACHMENT 1 TO SUPPLEMENT C
CONFIDENTIAL INFORMATION AGREEMENT
Customer: Edward D. Jones & Co., L.P.
201 Progress Parkway
Maryland Heights, MO 63043
Subject: Derivative Work (as such term is defined in
Supplement B to the Tektronix Purchase Agreement between
Tektronix and Customer dated ______________, 1995 ("TPA")
Purpose of Disclosure by Tektronix, Inc.("Tektronix"):
To enable Tektronix to provide engineering
consulting services to Customer in connection with
Customer's development of Derivative Works utilizing the
Licensed Video Source Code (as such term is defined in
Supplement B to the TPA)
Effective Date:
____________________, 199___
1. Tektronix may have, or hereafter may acquire,
certain documents and/or information of and/or regarding
Customer that is considered by Customer to be confidential
and proprietary (collectively, "Confidential Information").
Customer desires (a) to share Confidential Information with
Tektronix solely for the purpose stated above, and/or (b)
Third Parties (as such term is defined in Supplement B to
the TPA) to share Confidential Information with Tektronix
solely for the purpose stated above.
2. Subject to the further provisions hereof, Tektronix
agrees not to use, or to allow to be used, any Confidential
Information except in support of the purpose stated above.
Unless otherwise agreed to in writing by Customer, Tektronix
agrees not to disclose any Confidential Information to any
third party, and if such agreement is given, disclosure only
shall be permitted as therein provided. Subject to the
further provisions of this agreement, Tektronix agrees to
protect the Confidential Information with at least the same
degree of care as it normally exercises to protect its own
confidential and proprietary information of like character
and importance, but in no event less than that degree of
care exercised by a prudent businessman. In no event may
Tektronix directly or indirectly use, or allow to be used,
any Confidential Information in order to further the
business pursuits of Tektronix other than solely to be paid
the compensation provided for in Supplement C to the TPA (to
which this Confidential Information Agreement is attached as
Attachment 1 thereto).
3. To be considered Confidential Information
hereunder, the information must be (a) disclosed in written
or other tangible form and conspicuously marked as
"confidential" and/or "proprietary", or (b) disclosed orally
or visually, identified as "confidential" and/or
"proprietary" in anticipation of, or at the time of,
disclosure and summarized and submitted to Tektronix in
writing by or for, and/or in respect of, Customer within
fourteen (14) days of the date of disclosure. In addition,
unless encompassed by another agreement between Tektronix
and Customer, the information encompassed by this agreement
must have been received by Tektronix in anticipation of the
execution of the TPA and/or this agreement or within thirty
six (36) months after the Effective Date identified above.
4. The obligations imposed hereby shall not apply to
any information that:
A.Legally, legitimately and independently is known
by Tektronix at the time of disclosure unless encompassed by
another confidentiality agreement;
B.Is or becomes, through no fault of Tektronix or
someone acting for it on its behalf, available to the
general public;
C.Is independently developed by Tektronix without
direct or indirect use of any of the Confidential
Information;
D.Legally and legitimately is received by Tektronix
from a third party (other than a Third Party) who or which
does not have an obligation of confidentiality to Customer
unless disclosed to Tektronix from the third party in
confidence; or
E.Is disclosed by Tektronix free of restriction
with the prior written approval of Customer (and then only
to the limited extent so approved); or
In each of the foregoing events, information which
is Confidential Information only shall cease to constitute
Confidential Information after the happening of the event,
without any other Confidential Information being affected
thereby, and the obligations and restrictions set forth in
this agreement fully shall apply and be effective before
occurrence of the event.
5. All Confidential Information provided to Tektronix
shall remain the property of Customer and shall be returned
by Tektronix if this agreement is breached, together with
all copies, or at such other time as Customer requests.
6. Neither the execution and delivery of this
agreement nor the disclosure of any Confidential Information
hereunder shall be construed as granting by implication,
estoppel or otherwise, any right in or license under any
present or future invention, trade secret, trademark,
copyright, or patent now or hereafter owned or controlled
Customer.
7. Tektronix acknowledges that neither Customer nor
any Third Party is obligated by this agreement to furnish
any Confidential Information to Tektronix.
8. Without limiting the generality of Section 7 above,
the opportunity to receive Confidential Information under
this agreement may be terminated at any time. Such
termination shall not affect any obligation imposed by this
agreement with respect to Confidential Information received
prior to such termination.
9. This agreement shall be governed by the laws of the
State of Missouri.
10. This agreement contains the entire understanding
relative to the protection of the Confidential Information
covered by this agreement, in furtherance of said
Supplement C, and supersedes all prior and collateral
communications, reports and understandings, if any, between
the parties regarding the subject matter hereof.
TEKTRONIX:
TEKTRONIX, INC.
By:
Authorized
Representative
Name:
Type or Print
Title:
Type or Print
Date:
Exhibit 24.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K, into The Jones
Financial Companies, A Limited Partnership's previously filed S-8
Registration Statements File No. 33-35247 and No. 33-62734.
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
March , 1995
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<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for The Jones Financial Companies for the year ended
December 31, 1994 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000815917
<NAME> THE JONES FINANCIAL COMPANIES
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<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
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