AMENDMENT NO. 1 TO THE GUARANTEE AND SECURITY AGREEMENT
Exhibit 10.4
AMENDMENT
NO. 1 TO THE
AMENDMENT
NO. 1 TO THE GUARANTEE AND SECURITY AGREEMENT (this “Amendment”), dated as of
February 2, 2010, by and among CONSECO, INC., a Delaware corporation (the “Borrower”), the lenders
signatory hereto and Wilmington Trust FSB, as administrative agent (the “Agent”) for the
Lenders.
PRELIMINARY
STATEMENTS:
(1) The
Borrower, the Subsidiary Guarantors referred to therein, the Lenders, the
Increasing Lenders, the Agent and JPMorgan Chase Bank, N.A., as syndication
agent, are parties to a Second Amended and Restated Credit Agreement dated as of
October 10, 2006, as amended by Amendment No. 1 to the Second Amended and
Restated Credit Agreement dated as of June 12, 2007, as further amended by
Amendment No. 2 to the Second Amended and Restated Credit Agreement dated as of
March 30, 2009, as further amended by Amendment No. 3 to the Second Amended and
Restated Credit Agreement dated as of December 8, 2009 (as amended, restated,
supplemented or otherwise modified through the date hereof, the “Credit
Agreement”).
(2) The
Borrower, the Subsidiary Guarantors and the Agent are parties to that certain
Guarantee and Security Agreement dated as of June 22, 2004 (the “Security
Agreement”).
(3)
Amendment No. 3 to the Second Amended and Restated Credit Agreement provides
that the Borrower, the Subsidiary Guarantors and the Agent shall enter into
certain amendments to the Security Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual agreements herein
contained and for other good and valuable consideration, the sufficiency and
receipt of all of which is hereby acknowledged, the parties hereto hereby agree
as follows:
SECTION
1. Definitions. Any
capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Security Agreement.
SECTION
2. Amendments to Security
Agreement. The Security Agreement is hereby amended as
follows:
(a) Section 1
is hereby amended by adding in the appropriate alphabetical order the following
definition:
“Amendment No. 3 Effective
Date” means January 7, 2010.
(b) Section
11 is hereby amended as follows:
(i) The first
paragraph in Section 11(c) is hereby amended to state in its entirety as
follows:
“(c) Security
Entitlements. (i) All Security Entitlements owned
by each Lien Grantor shall be held, upon or promptly after receipt thereof, in
one of more Controlled Securities Accounts; provided, that this Section
11(c)(i) shall not apply to any Security Entitlements maintained in (x) any
Securities Account to the extent that the aggregate value of the Security
Entitlements held in such Securities Account does not exceed $5,000,000; and
provided further that
the aggregate value of all Securities Entitlements owned by all Lien Grantors
and held in all Securities Accounts (other than Securities Accounts that satisfy
the applicable conditions set forth in clauses (E), (F) and (G) of the proviso
at the end of Section 3(a)) that are not Controlled Securities Accounts shall
not at any time be in excess of $10,000,000 and (y) any Securities Accounts that
satisfy the applicable conditions set forth in clauses (E), (F) and (G) of the
proviso at the end of Section 3(a). The provisions of this subsection
are subject to Section 14(c).”
(ii) Section
11(c)(iii) is hereby amended to state in its entirety as follows:
“(iii) Each
Lien Grantor represents, warrants and covenants that (x) Schedule 6 lists, as
of the Amendment No. 3 Effective Date, all Controlled Securities Accounts, (y)
each Controlled Securities Account will be operated as provided in Section 13,
and (z) it will provide the Agent with prompt written notice that any Account
meets the requirements of a Controlled Securities Account, any such notice shall
be deemed an automatic amendment to Schedule 6 hereto to
include such Account, and such Lien Grantor shall enter into an Account Control
Agreement with respect to such Account.”
(iii) Section
11(d)(i) is hereby amended to state in its entirety as follows:
“(i) All
Commodity Contracts owned by each Lien Grantor shall be held, upon or promptly
after receipt thereof, in one or more Controlled Commodity Accounts; provided, that this Section
11(d)(i) shall not apply to any Commodity Contracts maintained in (x) any
Commodities Account to the extent that the aggregate value of the Commodity
Contracts held in such Commodities Account, does not exceed $5,000,000; and
provided further that
the aggregate value of all Commodity Contracts held by all Lien Grantors in all
Commodity Accounts (other than Commodity Accounts that are trust accounts) that
are not Controlled Commodity Accounts shall not at any time be in excess of
$10,000,000 and (y) any Commodities Account that is a trust account, so long as
such Commodities Account is maintained as a trust account.”
(iv) Section
11(d)(iii) is hereby amended to state in its entirety as follows:
“(iii) Each
Lien Grantor represents, warrants and covenants that (x) Schedule 6 lists, as
of the Amendment No. 3 Effective Date, all Controlled Commodity Accounts, (y)
each Controlled Commodity Account will be operated as provided in Section 13,
and (z) it will provide the Agent with prompt written notice that any Account
meets the requirements of a Controlled Commodity Account, any such notice shall
be deemed an automatic amendment to Schedule 6
hereto to include such Account, and such Lien Grantor shall enter into an
Account Control Agreement with respect to such Account.”
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(c) Section
12 is hereby amended as follows:
(i) The
introductory sentence of Section 12 is hereby amended in its entirety to state
as follows: “Controlled Deposit
Accounts. Each Lien Grantor represents, warrants and covenants
as follows:”
(ii) Section
12(a) is hereby amended to state in its entirety as follows:
“(a) All
cash owned by each Lien Grantor shall be deposited, upon or promptly after the
receipt thereof, in one or more Controlled Deposit Accounts; provided that this Section
12(a) shall not apply to any cash maintained in (i) any Deposit Account to the
extent that the average daily balance of cash held in such Deposit Account, as
determined on a monthly basis, does not exceed $5,000,000; and provided further that the
aggregate amount of cash maintained by all Lien Grantors in all Deposit Accounts
(other than Deposit Accounts that satisfy the applicable conditions set forth in
clauses (E), (F) and (G) of the proviso at the end of Section 3(a)) that are not
Controlled Deposit Accounts shall not at any time be in excess of $10,000,000
and (ii) any Deposit Account that satisfies the applicable conditions set forth
in clauses (E), (F) and (G) of the proviso at the end of Section
3(a).”
(iii) Section
12(b) is hereby amended to state in its entirety as follows:
“(b) (i)
Schedule 6
lists, as of the Amendment No. 3 Effective Date, all Controlled Deposit
Accounts, (ii) each Controlled Deposit Account will be operated as provided in
Section 13, and (iii) it will provide the Agent with prompt written notice that
any Account meets the requirements of a Controlled Deposit Account, any such
notice shall be deemed an automatic amendment to Schedule 6
hereto to include such Account, and such Lien Grantor shall enter into an
Account Control Agreement with respect to such Account.”
(iv) Section
12(c) is hereby amended to state in its entirety as follows:
“(c) [Reserved].”
(v) Section
12(f) of the Security Agreement is hereby amended by replacing the word “It” at
the beginning of such section with the words “Each Lien Grantor”.
(d) Schedule 3 of the
Security Agreement shall be replaced by Schedule 3 as
attached to this Amendment.
(e) Schedule 6 of the
Security Agreement shall be replaced by Schedule 6 as
attached to this Amendment.
SECTION
3. Conditions to
Effectiveness. This Amendment shall become effective as of the
date hereof upon each party hereto having executed and delivered this Amendment
to the Agent.
SECTION
4. Representation and
Warranties. In order to induce the Agent to enter into this
Amendment, the Company and each Subsidiary Guarantor hereby represent and
warrant that:
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(a) (i)
They have all requisite power and authority to execute and deliver this
Amendment and to consummate the transactions and execute any documents or
instruments contemplated hereby and (ii) have taken all action necessary and
appropriate to authorized the execution and delivery of this Amendment and the
transactions contemplated hereby, including, without limitation, entering into
such Account Control Agreements as may be required.
(b) This
Amendment has been duly executed and delivered and constitutes the legal, valid
and binding obligation of each Lien Grantor and is enforceable against each of
them in accordance with its terms and applicable law.
SECTION
5. Reference to and Effect on
the Credit Agreement, Security Agreement and Other Loan Documents. (a) On
and after the effectiveness of this Amendment, each reference in the Security
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Security Agreement, and each reference in the Notes and each of
the other Loan Documents to “the Security Agreement”, “thereunder”, “thereof” or
words of like import referring to the Security Agreement, shall mean and be a
reference to the Security Agreement, as amended by this Amendment.
(b) The
Credit Agreement, the Security Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment (and as contemplated to be
amended, modified, supplemented, restated, substituted or replaced by this
Amendment) are and shall continue to be in full force and
effect. Without limiting the generality of the foregoing, the
Security Documents and all of the Collateral described therein do and shall
continue to secure the payment of all Obligations of the Obligors under the Loan
Documents, in each case, as amended by this Amendment.
(c) The
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of any Lender, any Issuing Bank or the
Agent under any of the Loan Documents, nor constitute a waiver of any provision
of any of the Loan Documents.
(d) Each Lien
Grantor hereby ratifies and confirms all of their respective Obligations to the
Lenders and the Agent and hereby affirms its absolute and unconditional promise
to pay to the Lenders the Loans, the Obligations, and all other amounts due
under the Credit Agreement and the Security Agreement, as amended hereby, the
Notes, and the other Loan Documents, as applicable, at the times and in the
amounts provided for therein and subject to the terms hereof.
SECTION
6. Expenses. The
Borrower agrees that all reasonable out-of-pocket expenses incurred by the Agent
and the Steering Committee (as defined in the Credit Agreement) in connection
with the preparation, execution, delivery and administration, modification and
amendment of this Amendment and the other instruments and documents to be
delivered hereunder or in connection herewith (including, without limitation,
the reasonable fees, charges and disbursements of counsel for the Agent and the
Steering Committee and reasonable fees and expenses of the financial advisor
retained by the Agent and/or Steering Committee), are expenses that the Borrower
is required to pay or reimburse pursuant to Section 10.04 of the
Credit Agreement and the Fee Agreement (as defined in Section 6.16 of the Credit
Agreement).
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SECTION
7. Releases.
(a) In
consideration of the agreements of the Agent, the Steering Committee and the
Lenders contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Lien Grantor
(collectively, the “Releasing
Parties”), on behalf of the Releasing Party and each of their respective
successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably releases, remises and forever discharges the
Agent, the Steering Committee and each of the Lenders and their respective
successors and assigns, and their respective present and former shareholders,
affiliates, subsidiaries, divisions, predecessors, directors, officers,
attorneys, financial advisors, employees, agents and other representatives (the
Agent, the Lenders and all such other Persons being hereinafter referred to
collectively as the “Releasees” and individually
as a “Releasee”), of and
from all demands, actions, causes of action, suits, covenants, contracts,
controversies, agreements, promises, sums of money, accounts, bills, reckonings,
damages and any and all other claims, counterclaims, defenses, rights of set
off, demands and liabilities whatsoever (individually, a “Claim” and collectively,
“Claims”) of every name
and nature, known or unknown, suspected or unsuspected, both at law and in
equity, which such Releasing Party or any of its successors, assigns, or other
legal representatives may now or hereafter own, hold, have or claim to have
against the Releasees or any of them for, upon, or by reason of any
circumstance, action, cause or thing whatsoever which arises at any time on or
prior to the day and date of this Amendment for or on account of, or in relation
to, or in any way in connection with the Credit Agreement, the Security
Agreement, this Amendment or any related documents or transactions thereunder or
related thereto.
(b) Each
Releasing Party understands, acknowledges and agrees that the release set forth
above may be pleaded as a full and complete defense and may be used as a basis
for an injunction against any action, suit or other proceeding which may be
instituted, prosecuted or attempted in breach of the provisions of such
release.
(c) Each
Releasing Party agrees that no fact, event, circumstance, evidence or
transaction which could now be asserted or which may hereafter be discovered
shall affect in any manner the final, absolute and unconditional nature of the
release set forth above. Each Releasing Party acknowledges and agrees
that the Releasees have fully performed all obligations and undertakings owed to
the Releasing Parties under or in any way in connection with the Credit
Agreement, the Security Agreement, this Amendment or any related documents or
transactions thereunder or related thereto as of the date hereof.
(d) Each
Releasing Party, on behalf of itself and its successors, assigns, and other
legal representatives, hereby absolutely, unconditionally and irrevocably,
covenants and agrees with and in favor of each Releasee that it will not xxx (at
law, in equity, in any regulatory proceeding or otherwise) any Releasee on the
basis of any Claim released, remised and discharged by such Releasing Party
pursuant to this Section 7. If any Releasing Party or any of their
successors, assigns or other legal representatives violates the foregoing
covenant, such Person, for itself and its successors, assigns and legal
representatives, agrees to pay, in addition to such other damages as any
Releasee may sustain as a result of such violation, all attorneys’ fees and
costs incurred by any Releasee as a result of such violation.
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SECTION
8. Execution in
Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement. Delivery of
an executed counterpart of a signature page to this Amendment by telecopier or
electronic transmission (e.g., .pdf or .tif
file) shall be effective as delivery of a manually executed counterpart of this
Amendment.
SECTION
9. Governing Law. This
Amendment shall be governed by, and construed in accordance with, the laws of
the State of New York.
[The remainder of this page is
intentionally left blank. Signature pages
follow.]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
CONSECO,
INC., as Borrower
By
/s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
SVP & Treasurer
WILMINGTON
TRUST FSB, as
Agent
By /s/ Xxxxxx X.
Xxxx
Name:
Xxxxxx X. Xxxx
Title:
Vice President
Subsidiary
Guarantors:
|
|
AMERICAN
LIFE AND CASUALTY MARKETING DIVISION
CO.
|
CDOC, INC.
|
|
CONSECO
MANAGEMENT SERVICES COMPANY
|
By /s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
SVP & Treasurer
CODELINKS,
LLC
By:
CDOC, Inc., its Manager
By /s/ Xxxx X.
Xxxxxx
Name: Xxxx X. Xxxxxx
Title: SVP & Treasurer
40|86
ADVISORS, INC.
40|86
MORTGAGE CAPITAL, INC.
By /s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
SVP & Treasurer
|
|
PERFORMANCE
MATTERS ASSOCIATES, INC.
|
|
|
PERFORMANCE
MATTERS ASSOCIATES OF TEXAS, INC.
|
By /s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
SVP & Treasurer
CONSECO
SERVICES, LLC
By /s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
SVP & Treasurer
