FIFTH AMENDMENT TO GUARANTY AGREEMENT
This Fifth Amendment to Guaranty Agreement (the "Amendment") is made as of
this 30th day of November, 2000, to be effective as of September 30, 2000, by
and among ASCENT ASSURANCE, INC. (the "Guarantor"), and LASALLE BANK NATIONAL
ASSOCIATION (the "Bank").
W I T N E S S E T H
WHEREAS, the Guarantor delivered a Guaranty Agreement in favor of the Bank,
dated as of June 26, 1997, as amended by that certain First Amendment to
Guaranty Agreement, dated as of March 24, 1999, as further amended by that
certain Second Amendment to Guaranty Agreement, dated as of July 20, 1999, as
further amended by that certain Third Amendment to Guaranty Agreement, dated as
of April 17, 2000 and as further amended by that certain Fourth Amendment to
Guaranty Agreement, dated as of August 10, 2000 (collectively, the "Guaranty
Agreement");
WHEREAS, the Guarantor delivered the Guaranty Agreement pursuant to that
certain Credit Agreement, dated as of June 6, 1997 between Ascent Funding, Inc.
(formerly Westbridge Funding Corporation) and the Bank (as amended from time to
time, the "Credit Agreement"); and
WHEREAS, National Foundation Life Insurance Company ("NFL") has requested
and the Texas Insurance Commissioner has approved an extraordinary distribution
of approximately $4,131,000 to Guarantor, consisting of 100% of the issued and
outstanding common capital stock of Freedom Holding Company ("FHC") and its
wholly owned subsidiary, Freedom Life Insurance Company of America ("FLICA");
and
WHEREAS, as a result of such extraordinary distribution, FHC is currently a
direct subsidiary and FLICA is an indirect subsidiary of Guarantor, and, through
an additional restructuring of FHC, FLICA shall become a direct subsidiary of
Guarantor; and
WHEREAS, the parties desire to further amend the Guaranty Agreement, as
more fully set forth herein to, among other things, provide for the
restructuring of FLICA.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the adequacy of which is hereby
acknowledged, and subject to the terms and conditions hereof, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, all capitalized terms
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shall have the meaning given to them in the Guaranty Agreement.
SECTION 2. AMENDMENTS TO GUARANTY AGREEMENT.
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2.1 The definition of "FLICA" in Section 1.2 of the Guaranty Agreement is
hereby deleted in its entirety and replaced by inserting the following in its
stead:
"FLICA" means Freedom Life Insurance Company of America, a Texas
corporation."
2.2 The definition of "NFL" in Section 1.2 of the Guaranty Agreement is
hereby deleted in its entirety and replaced by inserting the following in its
stead:
"NFL" means National Foundation Life Insurance Company, a Texas
corporation."
2.3 Section 6.6 of the Guaranty Agreement is hereby amended by deleting the
first sentence in its entirety and inserting the following in its stead:
"At any time that the Obligations remain outstanding, permit the RBC Ratio
of any Insurance Subsidiary (excluding NFIC) to be less than 105% of the
"Company Action Level RBC."
2.4 Schedule 6.8 of the Guaranty Agreement is hereby deleted in its
entirety and replaced by inserting the following in its stead:
" Minimum Statutory Surplus Requirements
(in Million $)
-------------------------------- ---------------------------------------
Insurance Subsidiary Minimum Statutory Surplus Requirement
-------------------------------- ---------------------------------------
NFL $5.2
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NFIC $1.4
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AIC $1.4
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FLICA $5.0
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SECTION 3. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon satisfaction of the following conditions precedent:
3.1 The Bank shall have received copies of this Amendment duly executed by the
Guarantor.
3.2 The Bank shall have received copies of the First Amendment to Pledge
Agreement duly executed by the Guarantor.
3.3 The Bank shall have received copies of the Third Amendment to Credit
Agreement duly executed by the Borrower.
3.4 The Bank shall have received such other documents, certificates and
assurances as it shall reasonably request, all of which have been delivered on
or prior to the date hereof.
SECTION 6. REAFFIRMATION OF THE GUARANTOR. The Guarantor hereby ratifies and
reaffirms that certain Guaranty Agreement and each of the terms and provisions
contained therein, and agrees that the Guaranty Agreement continues in full
force and effect following the execution and delivery of this Amendment. The
Guarantor represents and warrants to the Bank that the Guaranty Agreement was,
on the date of the execution and delivery thereof, and continues to be, the
valid and binding obligation of the Guarantor enforceable in accordance with its
terms and that the Guarantor has no claims or defenses to the enforcement of the
rights and remedies of the Bank under the Guaranty Agreement.
SECTION 7. COUNTERPARTS. This Amendment 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 document.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day and year specified above.
ASCENT ASSURANCE, INC.
By: /s/Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board and CEO
LASALLE BANK NATIONAL ASSOCIATION
By: /s/Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
