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On December 28, 2001, the Company
entered into an amended and restated revolving credit agreement. The
revolving credit agreement permits borrowings of up to $20 million
through December 27, 2002, and is secured primarily by the Company's
stock in its subsidiaries. The interest rate on borrowings, determined
on a monthly basis, is equal to the greater of (i) the national prime
rate or (ii) 90-day LIBOR plus 2.5 percent, subject to a minimum rate
of 5.0 percent. At September 27, 2002, the interest rate on the revolving
credit agreement would have been 5.0 percent. The Company also pays
a maintenance fee of 0.375 percent of the unused borrowings through
the maturity date. The Company had no outstanding indebtedness under
the revolving credit agreement at September 27, 2002 and $22.5 million
of outstanding indebtedness under the prior revolving credit agreement
at September 28, 2001. The revolving credit agreement contains certain
covenants and restrictions, including a minimum net worth requirement,
and prohibits the payment of cash dividends. The Company was in compliance
with or has obtained waivers for all covenants under the revolving
agreement for all periods presented in the consolidated financial
statements.
Ameritrade, Inc. and iClearing, wholly owned subsidiaries of the Company
which act as securities clearing firms, have access to credit facilities
with financial institutions of up to $245 million. The financial institutions
may make loans under line of credit arrangements or, in some cases,
issue letters of credit under these facilities. Letters of credit
in the amount of $40 million and $105 million as of September 27,
2002 and September 28, 2001, respectively, have been issued on behalf
of the Company by several financial institutions and reduce the amount
available under these credit facilities. The letters of credit, which
are for the benefit of a securities clearinghouse, have been issued
for the contingent purpose of financing and supporting margin requirements.
As of September 27, 2002, no amounts were outstanding under line of
credit arrangements and approximately $205 million was available to
the Company for either loans or, in some cases, letters of credit.
The Company is generally required to pledge client securities to secure
outstanding obligations under these credit facilities. |
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