GUARANTY
Dated as of November 22, 2000
between
CONSECO, INC.,
as Guarantor,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
AMENDED AND RESTATED GUARANTY
THIS GUARANTY (this "Guaranty") is entered into as of November
22, 2000 by CONSECO, INC., an Indiana corporation ("Guarantor"), in favor of THE
CHASE MANHATTAN BANK, as administrative agent (the "Administrative Agent") for
the financial institutions (the "Banks" and together with Administrative Agent,
collectively, the "Guaranteed Parties") who are or from time to time may become
party to the Credit Agreement (as hereinafter defined). Unless otherwise defined
herein, capitalized terms used herein shall have the meanings assigned to such
terms pursuant to Article I hereof.
W I T N E S S E T H:
-------------------
WHEREAS, certain individuals (each individually, an "Existing
Borrower" and collectively, the "Existing Borrowers") entered into that certain
Credit Agreement, dated as of May 30, 2000 (as was amended, supplemented,
restated, refinanced, refunded, renewed or otherwise modified from time to time,
the "Existing Credit Agreement"), among the Existing Borrowers, the Banks and
the Administrative Agent, whereby the parties thereto amended the provisions of
the term loans previously made to the Existing Borrowers (the "Existing Loans")
on the terms and subject to the conditions set forth in the Existing Credit
Agreement;
WHEREAS, as a condition to the Administrative Agent and the
Banks entering into the Existing Credit Agreement, Guarantor was required to and
did execute and deliver to the Administrative Agent that certain Guaranty, dated
as of May 30, 2000, which was amended and restated pursuant to an Amended and
Restated Guaranty dated as of September 22, 2000 (as amended, supplemented or
otherwise modified from time to time prior to the date hereof, the "Existing
Guaranty"), whereby Guarantor absolutely, unconditionally and irrevocably agreed
to pay in full all Obligations (as therein defined) of the Existing Borrowers
under the Existing Credit Agreement;
WHEREAS, Guarantor has established a program to allow for
certain of the Existing Borrowers to refinance the Existing Loans;
WHEREAS, the Administrative Agent and the Banks have agreed to
refinance the Existing Loans pursuant to that certain Credit Agreement, dated as
of November 22, 2000 (as amended, supplemented, restated, refinanced, refunded,
renewed or otherwise modified from time to time, the "Credit Agreement"), among
certain of the Existing Borrowers (the "Borrowers), the Banks and the
Administrative Agent, on the terms and subject to the conditions contained in
the Credit Agreement;
WHEREAS, as a condition precedent to the Banks executing and
delivering the Credit Agreement and making the Loans thereunder, Guarantor is
required to execute and deliver this Guaranty;
WHEREAS, Guarantor has been duly authorized to execute,
deliver and perform this Guaranty; and
WHEREAS, Guarantor will derive substantial direct and
indirect benefit from the Loans made to the Borrowers by the Banks pursuant to
the Credit Agreement;
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WHEREAS, to the extent any of the Existing Loans outstanding
on the date hereof are not refinanced pursuant to the Credit Agreement, such
Existing Loans will remain outstanding pursuant to the Existing Credit Agreement
and continue to be guaranteed pursuant to the Existing Guaranty;
NOW THEREFORE, for good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged and to induce the Banks to
refinance Existing Loans to the Borrowers pursuant to the Credit Agreement,
Guarantor agrees, for the benefit of each Guaranteed Party, as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Terms. Capitalized terms used herein,
unless otherwise defined herein, shall have the respective meanings assigned
thereto in the Credit Agreement; provided that such definitions shall survive
any termination of the Credit Agreement. In addition, when used herein the
following terms shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Administrative Agent" has the meaning set forth in the
Preamble.
"Appendix" shall mean the Appendix attached to the Revolving
Credit Agreement, which is hereby incorporated by reference.
"Banks" or "Bank" has the meaning set forth in the Preamble.
"Borrower" or "Borrowers" has the meaning set forth in the
fourth recital.
"Borrower Default" has the meaning set forth in Section
6.1(a).
"Credit Agreement" has the meaning set forth in the fourth
recital.
"Credit Documents" has the meaning set forth in Section
2.3(a).
"Existing Borrowers" has the meaning set forth in the first
recital.
"Existing Credit Agreement" has the meaning set forth in the
first recital.
"Existing Guaranty" has the meaning set forth in the second
recital.
"Existing Loans" has the meaning set forth in the first
recital.
"Guaranteed Party" has the meaning set forth in the Preamble.
"Guarantee Payment" has the meaning set forth in Section
6.1(a).
"Guarantor" has the meaning set forth in the Preamble.
"Guaranty" has the meaning set forth in the Preamble.
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"Indemnified Liabilities" has the meaning set forth in
Section 6.1(c).
"Indemnified Parties" has the meaning set forth in Section
7.2.
"Obligations" has the meaning set forth in Section 2.1.
"Permitted Liens" has the meaning set forth in the Appendix.
"Relevant Agent" shall have the meaning set forth in the
Appendix.
"Relevant Banks" shall have the meaning set forth in the
Appendix.
"Relevant Facility" shall have the meaning set forth in the
Appendix.
"Revolving Credit Agreement" shall mean the Five-Year Credit
Agreement dated as of September 25, 1998, between Guarantor, the financial
institutions party thereto and the Administrative Agent, as amended by the First
Amendment to the Five-Year Credit Agreement, dated as of September 22, 2000, as
the same may be further amended, modified or supplemented from time to time.
"September 22 2000 Agreement" shall mean that Agreement dated
as of September 22, 2000 among the Guarantor, the Administrative Agent and the
Banks, as the same may be amended, supplemented or otherwise modified from time
to time.
"Subrogation Rights" has the meaning set forth in Section 2.6.
"Termination Event" shall have the meaning set forth in the
September 22, 2000 Agreement; provided that for purposes of this Guaranty (i)
the term "Amended and Restated Guaranty" as used in each of clause (b) and
clause (e) of Section 8 of the September 22, 2000 Agreement shall be deemed to
also include this Guaranty (and, as a result, and without limiting the
generality of the foregoing, any event of default by Guarantor hereunder
(including, without limitation, any default under Section 4.4 hereof and any
Event of Default under Section 4.5 hereof) shall constitute a Termination Event
under clause (e) of Section 8 of the September 22, 2000 Agreement), (ii) the
term "CIHC Guaranty" as used in each of clause (b) and clause (f) of Section 8
of the September 22, 2000 Agreement, which originally related only to the
Existing CIHC Guaranty, shall be deemed to also include the CIHC Guaranty, (iii)
the term "Existing Credit Agreement" as used in clause (d) of the September 22,
2000 Agreement shall be deemed to also include the Credit Agreement, and (iv)
the term "Plan" as used in clause (e) of the September 22, 2000 Agreement shall
be deemed to also include the Plan.
ARTICLE II.
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. Guarantor hereby absolutely,
unconditionally and irrevocably:
(a) guaranties to the Guaranteed Parties the full and punctual
payment (i) of all obligations of each Borrower to the Guaranteed
Parties for the payment of principal upon the earlier to occur of (A)
December 31, 2003 and (B) the occurrence of a Termination Event, and
(ii) of all obligations other than principal of each Borrower to the
Guaranteed Parties when due,
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whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise and at all times thereafter, in each
case, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, or now or hereafter existing, or due
or to become due under the Credit Agreement, whether for principal,
interest, fees, expenses or otherwise (including all such amounts which
would become due but for the operation of the automatic stay provisions
under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
ss.362(a), and the operation of Sections 502(b) and 506(b) of the
United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)) (all
such obligations hereinafter collectively called the "Obligations");
and
(b) indemnifies and holds harmless each Guaranteed Party or
any holder of any Loan for any and all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) incurred
by such Guaranteed Party or such holder, as the case may be, in
enforcing any rights under this Guaranty;
This Guaranty constitutes a guaranty of payment (x) on or after the date set
forth in clause (a)(i) above with respect to principal and (y) of all other
amounts when due, and not of collection, and Guarantor specifically agrees that
it shall not be necessary or required that any Guaranteed Party or any holder of
any Loan exercise any right, assert any claim or demand or enforce any remedy
whatsoever against any Borrower or any other obligor (or any other Person)
before the performance of, or as a condition to, the obligations of Guarantor
hereunder.
SECTION 2.2. Acceleration of Guaranty. Guarantor agrees that,
in the event of the insolvency of Guarantor, or the inability or failure of
Guarantor to pay debts as they become due, or an assignment by Guarantor for the
benefit of creditors, or the commencement of any case or proceeding in respect
of any Borrower, any other obligor with respect to the Obligations of such
Borrower, or Guarantor under any bankruptcy, insolvency or similar federal or
state laws, and if such event shall occur at a time when any of the Obligations
of such Borrower or such other obligor may not then be due and payable,
Guarantor will pay to the Banks forthwith (a) if such event relates to such
Borrower or any other obligor with respect to the Obligations of such Borrower,
the full amount which would be payable hereunder by Guarantor if all Obligations
of such Borrower were then due and payable and (b) if such event relates to
Guarantor or any other obligor with respect to the obligations of Guarantor, the
full amount which would be payable hereunder by Guarantor if all the Obligations
of all Borrowers were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in
all respects be a continuing, absolute, unconditional and irrevocable guaranty
of payment, and shall remain in full force and effect until all Obligations of
the Borrowers and each other obligor have been paid in full and all obligations
of Guarantor hereunder shall have been paid in full. Guarantor guarantees that
the Obligations of the Borrowers and each other obligor and their respective
Subsidiaries, if any, will be paid strictly in accordance with the terms of the
Credit Agreement and each other Loan Document under which they arise, regardless
of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Guaranteed Party or any holder
of the Note(s) of any Borrower with respect thereto. Consistent with (but not in
limitation of) the other provisions of this Section 2.3, the liability of
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a) any lack of validity, legality or enforceability of the
Existing Credit Agreement, the Existing Guaranty, any other loan
document relating to the Existing Credit Agreement or the
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Existing Guaranty, the September 22, 2000 Agreement, the Plan, the
Credit Agreement, any Note or any other Loan Document (the "Credit
Documents");
(b) the failure of any Guaranteed Party or any holder of any
Note:
(i) to assert any claim or demand or to enforce any right
or remedy against any Borrower, any other obligor or any other Person
under the provisions of the Credit Documents or otherwise; or
(ii) to exercise any right or remedy against any other
guarantor of, or collateral securing, any Obligations of any Borrower
or any other obligor;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of any Borrower or
any other obligor, or any other extension, compromise or renewal of any
Obligations of any Borrower or any other obligor;
(d) any reduction, limitation, impairment or termination of
the Obligations of any Borrower or any other obligor for any reason,
including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to (and Guarantor hereby waives
any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, the Obligations of any
Borrower, any other obligor or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to any departure from, any of the terms
of the Credit Documents;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to any departure from, any other
guaranty, held by any Guaranteed Party or any holder of any note
securing any of the Obligations of any Borrower or any other obligor;
or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Borrower, any other obligor, any surety or any guarantor.
SECTION 2.4. Reinstatement, etc. Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by any Guaranteed Party or any holder of
any Note, upon the insolvency, bankruptcy or reorganization of any Borrower, any
other obligor or otherwise, all as though such payment had not been made.
SECTION 2.5. Waiver, etc. Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of the Borrower or any other obligor, and this Guaranty and any
requirement that the Administrative Agent, any other Guaranteed Party or any
holder of any Note protect, secure, perfect or insure any security interest or
Lien, or any property subject thereto, or exhaust any right or take any action
against any Borrower, any other obligor or any other Person (including any other
guarantor) or entity or any collateral securing the Obligations of any Borrower
or any other obligor, as the case may be.
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SECTION 2.6. Waiver of Subrogation; Subordination. Guarantor
hereby irrevocably waives with respect to any Borrower, until the prior
indefeasible payment in full in cash of all Obligations of such Borrower under
the Loan Documents, any claim or other rights which it may now or hereafter
acquire against such Borrower or any other obligor that arises from the
existence, payment, performance or enforcement of Guarantor's obligations under
this Guaranty or any other Loan Document (but not rights with respect to
Guarantor Loans), including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or remedy
of the Guaranteed Parties against such Borrower or any other obligor or any
collateral which the Administrative Agent now has or hereafter acquires, whether
or not such claim, remedy or right (all such claims, remedies and rights being
collectively called "Subrogation Rights") arises in equity, or under contract,
statute or common law, including the right to take or receive from such Borrower
or any other obligor, directly or indirectly, in cash or other property or by
set-off or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to Guarantor in violation of the preceding
sentence and the Obligations shall not have been paid in cash, in full, such
amount shall be deemed to have been paid to Guarantor for the benefit of, and
held in trust for, the Guaranteed Parties, and shall forthwith be paid to the
Guaranteed Parties to be credited and applied upon the Obligations of such
Borrower, whether matured or unmatured. Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Credit Agreement and that the waiver set forth in this
Section 2.6 is knowingly made in contemplation of such benefits.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of
Notes, etc. This Guaranty shall:
(a) be binding upon Guarantor, and its successors, transferees
and assigns; and
(b) inure to the benefit of and be enforceable by the
Administrative Agent and each other Guaranteed Party.
Without limiting the generality of clause (b), any Bank may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person,
and such other Person shall thereupon become vested with all rights and benefits
in respect thereof granted to such Bank under any Loan Document (including this
Guaranty) or otherwise. Notwithstanding anything contained in this Section 2.7
to the contrary, this Section 2.7 shall not be deemed to enlarge or create
additional rights with respect to any Bank's ability to assign any portion of
its Loans or rights under any Note or any other Loan Document pursuant to
Section 12 of the Credit Agreement, and this Section 2.7 is expressly made
subject thereto.
SECTION 2.8. Payments Free and Clear of Taxes, etc. Guarantor
hereby agrees that:
(a) any and all payments made by Guarantor hereunder shall be
made in accordance with Section 4.5 of the Credit Agreement free and
clear of, and without deduction for, any and all Charges, to the same
extent as if Guarantor were a Borrower;
(b) Guarantor hereby indemnifies and holds harmless each
Guaranteed Party and each holder of a Loan for the full amount of any
Charges paid by such Guaranteed Party or such holder, as the case may
be, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto; and
(c) without prejudice to the survival of any other agreement
of Guarantor hereunder, the agreements and obligations of Guarantor
contained in this Section 2.8 shall survive the payment in full of the
principal of and interest on the Loans.
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SECTION 2.9. Right of Offset. In addition to and not in
limitation of all rights of offset that any Guaranteed Party or other holder of
a Note may have under applicable law or any other Loan Document, subject to the
terms of the Credit Agreement, each Guaranteed Party or other holder of a Note
shall, during the continuance of any Termination Event and whether or not such
Guaranteed Party or such holder has made any demand or whether or not
Guarantor's obligations are matured, have the right to appropriate and apply to
the payment of Guarantor's obligations hereunder all deposits (general or
special, time or demand, provisional or final) then or thereafter held by, and
other indebtedness or property then or thereafter owing to, such Guaranteed
Party or other holder, whether or not related to this Guaranty or any
transaction hereunder.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES;
INCORPORATION BY REFERENCE
Guarantor represents and warrants to each Guaranteed Party
that:
SECTION 3.1. Organization, etc. Guarantor and each of its
Subsidiaries is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the laws of the
state of its incorporation or formation and each of Guarantor and its
Subsidiaries is duly qualified to transact business and in good standing as a
foreign corporation, partnership or limited liability company authorized to do
business in each jurisdiction where the nature of its business makes such
qualification necessary and failure to so qualify could reasonably be expected
to have a Material Adverse Effect.
SECTION 3.2. Authorization. Guarantor (a) has the power to
execute, deliver and perform this Guaranty and the other Loan Documents to which
it is a party, and (b) has taken all necessary action to authorize the
execution, delivery and performance by it of this Guaranty and the other Loan
Documents to which it is a party.
SECTION 3.3. No Conflict. The execution, delivery and
performance by Guarantor of this Guaranty and the other Loan Documents to which
it is a party does not and will not (a) contravene or conflict with any
provision of any law, statute, rule or regulation, (b) contravene or conflict
with, result in any breach of, or constitute a default under, any material
agreement or instrument binding on Guarantor or any of its Subsidiaries
(including, without limitation, any writ, judgment, injunction or other similar
court order), (c) result in the creation or imposition of or the obligation to
create or impose any Lien (except for Permitted Liens) upon any of the property
or assets of Guarantor or any of its Subsidiaries or (d) contravene or conflict
with any provision of the articles of incorporation or bylaws of Guarantor.
SECTION 3.4. Margin Regulations.
(a) None of the transactions contemplated hereunder or in
connection herewith will in any way violate, contravene or conflict
with any of the provisions of Regulation U;
(b) None of the obligations of any Borrower to Guarantor is or
will be directly or indirectly secured by "margin stock" (as defined in
Regulation U);
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(c) Neither Guarantor nor any third party acting on behalf of
Guarantor has taken or will take possession of any Borrower's "margin
stock" to secure, directly or indirectly, any of the Obligations of
such Borrower or the obligations of Guarantor under this Guaranty or
any of the Loan Documents;
(d) Guarantor does not and will not have any right to prohibit
any Borrower from selling, pledging, encumbering or otherwise disposing
of any margin stock owned by such Borrower so long as this Guaranty is
in effect or any of the Obligations of such Borrower or the obligations
of Guarantor under this Guaranty or any of the Loan Documents remain
outstanding;
(e) None of the Borrowers have granted or will grant Guarantor
or any third party acting on behalf of Guarantor the right to
accelerate repayment of any of the Obligations of such Borrower if any
of the margin stock owned by such Borrower is sold by such Borrower or
otherwise; and
(f) There is no agreement or other arrangement between any
Borrower and Guarantor or any third party acting on behalf of Guarantor
(and no such agreement or arrangement shall be entered into so long as
this Guaranty is in effect or any of the Obligations of such Borrower
or the obligations of Guarantor under this Guaranty or any of the Loan
Documents remain outstanding) under which the margin stock of such
Borrower would be made more readily available as security to Guarantor
than to other creditors of such Borrower.
SECTION 3.5. No Termination Event. No Termination Event has
occurred and is continuing.
ARTICLE IV.
COVENANTS AND EVENTS OF DEFAULT
SECTION 4.1. Covenants. Guarantor agrees that, on and after
the date hereof for so long thereafter as any of the Obligations remain unpaid
or outstanding, Guarantor will comply with the covenants set forth in Articles
II, III and IV of the Appendix and the terms and provisions set forth therein
shall be incorporated by reference in this Section 4.1 in their entirety as if
fully set forth herein with the same effect as if applied to this Section 4.1.
All capitalized terms set forth in Articles II, III and IV of the Appendix shall
have the meanings provided in the Appendix. Such covenants shall not be affected
in any manner by the termination of the Revolving Credit Agreement.
Notwithstanding the foregoing, if Articles II, III and IV of
the Appendix or any definitions set forth or used therein are amended or
modified in accordance with the terms of the Revolving Credit Agreement either
as the result of an amendment or modification to such section in the Appendix or
Guarantor's execution and delivery of a new credit facility in replacement,
restatement or substitution for the Revolving Credit Agreement, this Section 4.1
shall be deemed to be amended and modified to the extent set forth in the
Revolving Credit Agreement (as amended or modified) or any new credit facility
entered into in replacement, restatement or substitution for the Revolving
Credit Agreement.
SECTION 4.2. Margin Regulations. Guarantor shall take such
actions and execute and deliver such instruments or documents from time to time
as the Administrative Agent shall reasonably request to maintain continuous
compliance with Regulation U.
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SECTION 4.3. Limitation on Additional Purpose Credit.
Notwithstanding any other provision of this Guaranty, the Credit Agreement or
the Revolving Credit Agreement to the contrary, Guarantor will not, and will not
permit any of its Wholly-Owned Subsidiaries and/or Significant Subsidiaries to
incur or assume any Indebtedness which constitutes "purpose credit" secured
"directly or indirectly" (as defined in Regulation U) by Margin Stock.
SECTION 4.4. Provision of Collateral Ratio Information.
Guarantor shall provide to the Administrative Agent and the Banks such
information as may be reasonably requested from time to time by the
Administrative Agent or the Required Banks to permit the Administrative Agent or
the Required Banks, as the case may be, to determine the "maximum good faith
loan value" (as defined in Regulation U) of the Indirect Collateral and do such
other acts and execute such other documentation to continue to comply with
Regulation U.
SECTION 4.5. Events of Default. The Events of Default set
forth in Section 5.01 of the Appendix are hereby incorporated by this reference.
ARTICLE V.
CONDITIONS
The obligation of the Banks to make the Loans is (in addition
to the conditions precedent set forth in Section 9 of the Credit Agreement)
subject to the performance by Guarantor of all of the obligations under this
Guaranty and to the satisfaction of the following conditions precedent:
SECTION 5.1. Consent and Loans. Prior to or concurrent with
the making of the Loans under the Credit Agreement, the Administrative Agent
shall have received all of the following, each, except to the extent otherwise
specified below, duly executed and delivered by a Responsible Officer of
Guarantor, dated the date of the Loans, in form and substance satisfactory to
the Administrative Agent, each in sufficient number of signed counterparts or
copies to provide one for each Bank and the Administrative Agent:
5.1.1. An opinion of Xxxxx X. Xxxxxx, counsel of Guarantor and
its Subsidiaries, addressing such legal matters as the Administrative
Agent may reasonably require;
5.1.2. An opinion of Weil, Gotshal & Xxxxxx LLP, outside
counsel to Guarantor and its Subsidiaries, addressing such legal
matters as the Administrative Agent may reasonably require;
5.1.3. An officer's certificate of Guarantor, dated as of the
Closing Date, signed by a Responsible Officer of Guarantor, and
attested to by the secretary thereof, together with certified copies of
Guarantor's articles of incorporation, bylaws and directors'
resolutions;
5.1.4. Evidence of the good standing or certificate of
compliance of Guarantor in the jurisdiction in which Guarantor was
incorporated as of the Closing Date;
5.1.5. Evidence that Guarantor paid to the Administrative
Agent the fees and expenses provided for herein;
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5.1.6. Evidence reasonably satisfactory to the Administrative
Agent of compliance by Guarantor with Regulation U; and
5.1.7. Such other information and documents as may reasonably
be required by the Administrative Agent and the Administrative Agent's
counsel.
ARTICLE VI.
CERTAIN REMEDIAL AND PAYMENT MATTERS
SECTION 6.1. Sale of Pledged Shares. (a) The Administrative
Agent agrees that after the occurrence and during the continuance any Event of
Default with respect to any Borrower, the effect of which is to cause the
Obligations of such Borrower to be due and payable under the Credit Agreement (a
"Borrower Default"), subject to the provisions of Section 2.1 and Section 6.3
below, it will provide Guarantor the opportunity to purchase the Pledged Shares
pledged by such Borrower at a price reasonably satisfactory to the
Administrative Agent, and any payment for such Pledged Shares made by Guarantor
on or prior to the date on which any payment (a "Guarantee Payment") is required
to be made by Guarantor pursuant to Article II shall be credited against such
Guarantee Payment.
(b) Guarantor agrees that in any such sale of any of the
Pledged Shares, the Administrative Agent is authorized to comply with any
limitation or restriction in connection with such sale as counsel may advise the
Administrative Agent is necessary, in the reasonable opinion of such counsel, in
order to avoid any violation of applicable law.
(c) Guarantor further agrees to indemnify and hold harmless
the Administrative Agent and the Banks and each of their respective officers,
directors, employees, agents, successors and assigns, and any Person in control
of any thereof, from and against any loss, liability, claim, damage and expense,
including, without limitation, reasonable attorneys' fees actually incurred (in
this paragraph collectively called the "Indemnified Liabilities"), under federal
and state securities laws or otherwise resulting from the action or failure to
act by Guarantor or any Borrower; provided, that no such Person shall have the
right to be indemnified hereunder for its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
Section 6.2. Release of Pledged Shares. The Administrative
Agent agrees that it shall not release any of the Pledged Shares of any Borrower
from the Lien granted under the Pledge Agreement until the payment in full of
all obligations of such Borrower. Notwithstanding the foregoing, the
Administrative Agent shall be entitled to (i) release the Pledged Shares of such
Borrower if such Pledged Shares are replaced by additional common stock of
Guarantor and (ii) sell the Pledged Shares pursuant to Section 6.1 hereof or the
Pledge Agreement.
SECTION 6.3. Borrower Termination Event. Guarantor hereby
acknowledges and agrees that Sections 6.1 and 6.2 shall not apply to any
Termination Event relating to Guarantor or any of its Subsidiaries and, upon the
occurrence of a Termination Event relating to Guarantor or any of its
Subsidiaries, the Administrative Agent expressly reserves its rights and
remedies under this Guaranty to demand payment hereunder to satisfy the
Obligations of all Borrowers and the obligations of Guarantor hereunder whether
or not the Administrative Agent has sold or attempted to sell the Pledged Shares
of any Borrower or otherwise exercised its rights and remedies under the Pledge
Agreement or any other Loan Document. Furthermore nothing contained herein shall
be deemed to prohibit or limit in any way whatsoever the Administrative Agent's
or any Bank's right or ability to receive its portion of the assets of
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Guarantor upon the exercise by any other Relevant Agent or any other Relevant
Banks of their rights and remedies under any other Relevant Facility or any
other creditor of Guarantor.
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1. Costs and Expenses. Guarantor agrees to pay on
demand all reasonable expenses of the Administrative Agent (including the
non-duplicative fees and reasonable expenses of counsel (including expenses of
in-house counsel) and of local counsel, if any, who may be retained by such
counsel) in connection with:
(i) the negotiation, preparation, execution, syndication
and delivery of the Credit Agreement, this Guaranty and the other Loan
Documents, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to the Credit
Agreement, this Guaranty or the other Loan Documents as may from time
to time hereafter be required, whether or not the transactions
contemplated hereby or thereby are consummated; and
(ii) the preparation and/or review of the form of any
document or instrument relevant to the Credit Agreement, this Guaranty
or any other Loan Document.
Guarantor further agrees to pay, and to save the Administrative Agent and the
Banks, and their respective Affiliates, harmless from all liability for, any
stamp or other Taxes (other than income taxes of the Administrative Agent or the
Banks) which may be payable in connection with the execution or delivery of the
Credit Agreement, any Borrowing thereunder, the issuance of the Notes, if any,
this Guaranty or any other Loan Document. Guarantor also agrees to reimburse the
Administrative Agent and each Bank upon demand for all reasonable expenses
(including attorneys' fees and legal expenses) incurred by the Administrative
Agent or such Bank in connection with the enforcement of any Obligations or
obligations hereunder and the consideration of legal issues relevant hereto and
thereto whether or not such expenses are incurred by the Administrative Agent on
its own behalf or on behalf of the Banks. All obligations of Guarantor provided
for in this Section 7.1 shall survive termination of this Agreement.
Notwithstanding the foregoing, the Administrative Agent or a Bank shall not have
the right to reimbursement under this Section 7.1 for amounts determined by a
court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of the Administrative Agent or a Bank.
SECTION 7.2. Indemnity. Guarantor agrees to indemnify the
Administrative Agent, each Bank, their Affiliates and their respective
directors, officers, employees, persons controlling or controlled by any of them
or their respective agents, consultants, attorneys and advisors (the
"Indemnified Parties") and hold each Indemnified Party harmless from and against
any and all liabilities, losses, claims, damages, costs and expenses of any kind
to which any of the Indemnified Parties may become subject, whether directly or
indirectly (including, without limitation, the reasonable fees and disbursements
of counsel for any Indemnified Party), relating to or arising out of the Credit
Agreement, this Guaranty, the other Loan Documents, or any actual or proposed
use of the proceeds of the Loans hereunder; provided, that no Indemnified Party
shall have the right to be indemnified hereunder for its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction. All
obligations of the Guarantor provided for in this Section 7.2 shall survive
termination of the Credit Agreement and this Guaranty.
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SECTION 7.3. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile or similar writing) and shall be given to such party at its
address, facsimile or telex number set forth on the signature or acknowledgment
pages hereof or such other address, facsimile or telex number as such party may
hereafter specify for the purpose by written notice to the Administrative Agent
and Guarantor. Each such notice, request or other communication shall be
effective (a) if given by facsimile or telex, when such facsimile or telex is
transmitted to the facsimile or telex number specified in this Section 7.3 and,
in each case, the appropriate answerback or other confirmation is received, (b)
if given by mail, seventy-two (72) hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (c) if
given by any other means, when delivered at the address specified in this
Section 7.3.
SECTION 7.4. Successors and Assigns. This Guaranty, and the
terms, covenants and conditions hereof, shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns,
except Guarantor shall not be permitted to assign this Guaranty nor any interest
herein nor in the Collateral, nor any part thereof, except in accordance with
the terms of the Credit Agreement.
SECTION 7.5. SUBMISSION TO JURISDICTION, ETC. EACH OF THE
GUARANTOR AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING
IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, AND EACH OF GUARANTOR AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR
TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. EACH OF GUARANTOR AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY
ACTION OR PROCEEDING (WHETHER BROUGHT BY GUARANTOR, ANY OF ITS SUBSIDIARIES, THE
ADMINISTRATIVE AGENT, ANY BANK OR OTHERWISE) IN ANY COURT HEREIN ABOVE SPECIFIED
IN THIS SECTION 7.5 AS WELL AS ANY RIGHT IT MAY NOW OR HEREAFTER HAVE TO REMOVE
ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED, TO ANOTHER COURT ON THE GROUNDS
OF FORUM NON CONVENIENS OR OTHERWISE. EACH OF GUARANTOR AND THE ADMINISTRATIVE
AGENT AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.
SECTION 7.6. Amendments and Release. Notwithstanding anything
to the contrary contained in the Credit Agreement, the provisions of this
Guaranty may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by Guarantor
and by the Administrative Agent (with the consent of the Required Banks), and
then any such amendment, modification, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided
that no such amendment, modification or waiver which would permit the release or
termination of all or a substantial portion of Guarantor's obligations under
this Guaranty shall be effective without the consent of each Bank.
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SECTION 7.7. Section Headings. The section headings in this
Guaranty are inserted for convenience of reference and shall not be considered a
part of this Guaranty or used in its interpretation.
SECTION 7.8. Acknowledgments. No action of the Administrative
Agent permitted hereunder shall in any way affect or impair the rights of the
Administrative Agent and the obligations of Guarantor under this Guaranty.
Guarantor hereby acknowledges that there are no conditions to the effectiveness
of this Guaranty. Guarantor hereby acknowledes and agrees to make such
deliveries as are required of it and comply with the other provisions applicable
to it pursuant to the provisions of the Credit Agreement.
SECTION 7.9. Obligations Not Limited. All obligations of
Guarantor and rights of the Administrative Agent or obligation expressed in this
Guaranty shall be in addition to and not in limitation of those provided in
applicable law or in any other written instrument or agreement relating to any
of the Obligations.
SECTION 7.10. GOVERNING LAW. THIS GUARANTY SHALL BE A CONTRACT
MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. ALL OBLIGATIONS OF
THE BORROWERS AND GUARANTOR AND RIGHTS OF THE ADMINISTRATIVE AGENT AND THE BANKS
IN RESPECT OF THE OBLIGATIONS AND THE OBLIGATIONS OF GUARANTOR EXPRESSED HEREIN
OR IN THE OTHER LOAN DOCUMENTS SHALL BE IN ADDITION TO AND NOT IN LIMITATION OF
THOSE PROVIDED BY APPLICABLE LAW.
SECTION 7.11. Counterparts. This Guaranty may be executed in
any number of counterparts (including by facsimile transmission), each of which
shall for all purposes be deemed an original, but all such counterparts shall
constitute but one and the same agreement. Guarantor hereby acknowledges receipt
of a true, correct and complete counterpart of this Guaranty.
SECTION 7.12. Agent. The Administrative Agent acts herein as
agent for itself, the Banks and any and all future holders of the Obligations.
SECTION 7.13. WAIVER OF TRIAL BY JURY. EACH OF GUARANTOR AND
THE ADMINISTRATIVE AGENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
CONCERNING ANY RIGHTS UNDER THIS GUARANTY, ANY OTHER LOAN DOCUMENT OR ANY OTHER
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY BANKING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS GUARANTY AND AGREES THAT ANY SUCH ACTION,
PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY;
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS
GUARANTY.
SECTION 7.14. No Limitation on Remedies. No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Bank, any right, remedy, power or privilege hereunder or under the other
Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
CONSECO, INC.
By:/s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Acting Chief Financial
Officer
GUARANTY AND SUBORDINATION AGREEMENT
Dated as of November 22, 2000
made by
CIHC, INCORPORATED,
as Guarantor and Subordinated Borrower,
and
CONSECO, INC.,
as Obligor and Subordinated Lender,
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
under the Credit Agreement, dated as of November 22, 2000
GUARANTY AND SUBORDINATION AGREEMENT
This Guaranty and Subordination Agreement (this "Agreement")
is entered into as of November 22, 2000 by CIHC, INCORPORATED and CONSECO, INC.
in favor of THE CHASE MANHATTAN BANK, as administrative agent (in such capacity,
the "Agent") for the financial institutions (the "Banks" and together with the
Agent, collectively, the "Guarantied Parties") who are or from time to time may
become party to the Credit Agreement, dated as of November 22, 2000 (as the same
may be amended, supplemented, restated or otherwise modified from time to time,
the "Credit Agreement"), among the individual borrowers party thereto, the Banks
and the Agent. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to such terms pursuant to Article I hereof.
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to an Agreement, dated as of September 22,
2000 (the "Restructuring Document") relating to the 1999 Director & Officer Loan
Agreement with respect to the Existing Credit Agreement (as such term is defined
in the Restructuring Document) and the existing guaranty of Conseco, Inc.,
executed and delivered as a condition to the effectiveness of the Existing
Credit Agreement (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the "Existing Conseco Guaranty"), the
Banks agreed, among other things, to refrain from exercising certain remedies in
respect of the Existing Conseco Guaranty;
WHEREAS, it was a condition precedent to the obligation of the
Banks to enter into the Restructuring Document that the Agreement Parties
execute and deliver, and the Agreement Parties did execute and deliver, that
certain Guaranty and Subordination Agreement, dated as of September 22, 2000
(the "Existing Agreement");
WHEREAS, Conseco has established a program to allow for
certain of the Borrowers to refinance the Existing Loans;
WHEREAS, the Administrative Agent and the Banks have agreed to
refinance the Existing Loans pursuant to the Credit Agreement on the terms and
subject to the conditions contained in the Credit Agreement;
WHEREAS, as a condition precedent to the Administrative Agent
and the Banks executing delivering the Credit Agreement and making the Loans
thereunder, Conseco is required to execute and deliver a Guaranty of the
obligations of the Borrowers thereunder (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the "Conseco
Guaranty");
WHEREAS, as a condition precedent to the Banks executing and
delivering the Credit Agreement and making the Loans thereunder, the Agreement
Parties are required to execute and deliver this Agreement;
WHEREAS, the Agreement Parties have been duly authorized to
execute, deliver and perform this Agreement; and
WHEREAS, the Agreement Parties will derive substantial direct
and indirect benefits from the Loans made to the Borrowers by the Banks pursuant
to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged and to induce the Administrative
Agent and the Banks to enter into the
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Credit Agreement and accept the Conseco Guaranty in connection therewith, each
Agreement Party agrees, for the benefit of each Guarantied Party, as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Terms . Capitalized terms used herein,
unless otherwise defined herein, shall have the respective meanings assigned
thereto in the Credit Agreement or the Conseco Guaranty Documents; provided that
such definitions shall survive any termination of the Credit Agreement or any
Conseco Guaranty Document. In the event that any such capitalized term is
defined both in the Appendix and any other document referred to above, the
definition contained in the Appendix shall govern. In addition, when used herein
the following terms shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Agent" has the meaning set forth the in Preamble.
"Agreement" has the meaning set forth in the Preamble.
"Agreement Party" means each of Obligor, Guarantor, Subordinated
Lender and Subordinated Borrower.
"Appendix" has the meaning assigned to such term in the Conseco
Guaranty.
"Banks" has the meaning set forth in the Preamble.
"Charges" has the meaning assigned to such term in the Credit
Agreement.
"CIHC Guaranty" means each of (a) this Agreement, (b) the Guaranty
and Subordination Agreements dated as of the date hereof by CIHC and
Conseco relating to (i) the Guaranty of Conseco dated as of the date
hereof with respect to a credit agreement dated as of the date hereof
refinancing obligations under an Amended and Restated Credit Agreement
dated as of August 26, 1997 and (ii) the Guaranty of Conseco dated as
of the date hereof with respect to a credit agreement dated as of the
date hereof refinancing obligations under a Credit Agreement dated as
of August 21, 1998, and (c) the Guaranty and Subordination Agreements
dated September 22, 2000 by CIHC and Conseco relating to the
obligations of Conseco in respect of (i) the Five-Year Credit Agreement
dated as of September 25, 1998 among Conseco, certain financial
institutions and Bank of America, N.A., as agent, as amended, (ii) the
364-Day Credit Agreement dated as of September 25, 1998 among Conseco,
certain financial institutions and Bank of America, N.A., as agent, as
amended, (iii) the Senior Secured Revolving Credit Agreement, dated as
of May 30, 2000 among Conseco, certain financial institutions and The
Chase Manhattan Bank, as administrative agent, as amended, (iv) the
Amended and Restated Guaranty dated August 26, 1997 by Conseco with
respect to an Amended and Restated Credit Agreement, dated as of August
26, 1997, among certain individual borrowers, certain financial
institutions and Bank of America, N.A., as administrative agent, as
amended, (v) the Guaranty dated as of August 21, 1998 by Conseco with
respect to the Credit Agreement, dated as of August 21, 1998, among
certain financial institutions and Bank of America, N.A., as
administrative agent, as amended, and (vi) the Amended and Restated
Guaranty, dated as of September 22, 2000 by Conseco with respect to the
Existing Credit Agreement, as amended, as each of the foregoing may be
amended, modified or supplemented from time to time.
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"Conseco" means Conseco, Inc.
"Conseco Guaranty" has the meaning set forth in the fifth Recital.
"Conseco Guaranty Documents" means the collective reference to the
Conseco Guaranty and any other agreement entered into by Obligor in
connection therewith.
"Credit Agreement" has the meaning set forth in the Preamble.
"Default" has the meaning assigned to such term in the Appendix.
"Event of Default" has the meaning assigned to such term in the
Appendix.
"Existing Agreement" shall have the meaning set forth in the second
Recital.
"Existing Conseco Guaranty" shall have the meaning set forth in the
first Recital.
"Existing Conseco Guaranty Documents" means the collective
reference to the Existing Conseco Guaranty, the Restructuring Document
and any other agreement entered into by Obligor in connection
therewith.
"Existing Credit Agreement" shall have the meaning set forth
in the first Recital.
"Existing Loans" shall have the meaning assigned to such term
in the Credit Agreement.
"Guarantied Obligations" has the meaning set forth in Section
2.1.
"Guarantied Parties" has the meaning set forth in the Preamble.
"Guarantor" means CIHC, Incorporated, in its capacity as guarantor
of the Guarantied Obligations.
"Indemnified Parties" has the meaning set forth in Section 5.1.
"Investment Grade Status" has the meaning assigned to such term in
the Appendix.
"Xxxxxx Agreement" has the meaning assigned to such term in the
Appendix.
"Near-Term Facilities Termination Date" has the meaning assigned to
such term in the Appendix.
"Obligations" means all debts, liabilities, obligations, covenants
and duties for the payment of money owing by Obligor pursuant to any
Conseco Guaranty Document, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising.
"Obligor" means Conseco, Inc., in its capacity as obligor in
respect of the Obligations.
"Reorganization" has the meaning set forth in Section 3.2(a).
"Restructuring Document" has the meaning set forth in the first
Recital.
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"Senior Creditors" means any holder or beneficiary of any Senior
Debt, or any authorized representative thereof.
"Senior Debt" means (a) all obligations of Guarantor under Article
II, (b) all "Senior Debt" under and as defined in any other CIHC
Guaranty, (c) all "Senior Debt" under and as defined in the Guaranty
and Subordination Agreement entered into in connection with the Xxxxxx
Agreement and (d) all other "Senior Debt" (or comparable concept) under
and as defined in any subordination provision or agreement relating to
or entered into in connection with any Contingent Obligation of CIHC
pursuant to Section 4.01(d)(i) or (d)(iv) of the Appendix.
"Subordinated Borrower" means CIHC, Incorporated, in its capacity
as obligor in respect of the Subordinated Debt.
"Subordinated Debt" means the principal amount of any Indebtedness
owing by Subordinated Borrower to Subordinated Lender from time to time
outstanding and unpaid, together with accrued and unpaid interest
thereon.
"Subordinated Lender" means Conseco, Inc., in its capacity as
holder of the Subordinated Debt.
"Subrogation Rights" has the meaning set forth in Section 2.6.
ARTICLE II.
GUARANTY PROVISIONS
SECTION 2.1. Guaranty . Guarantor hereby absolutely,
unconditionally and irrevocably:
(a) guaranties to the Guarantied Parties the full and punctual
payment when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, and at all times
thereafter, of all Obligations (including all such amounts which would
become due but for the operation of the automatic stay provisions under
Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
ss.362(a), and the operation of Sections 502(b) and 506(b) of the
United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)) (all
such Obligations collectively called the "Guarantied Obligations"); and
(b) indemnifies and holds harmless each Guarantied Party or
any other holder of any Guarantied Obligations for any and all costs
and expenses (including, without limitation, reasonable attorneys' fees
and expenses) incurred by such Guarantied Party or such holder, as the
case may be, in enforcing any rights under this Agreement;
The guaranty set forth in this Article II constitutes a guaranty of payment when
due and not of collection, and Guarantor specifically agrees that it shall not
be necessary or required that any Guarantied Party or any other holder of any
Guarantied Obligations exercise any right, assert any claim or demand or enforce
any remedy whatsoever against Obligor or any other Person before the performance
of, or as a condition to, the obligations of Guarantor hereunder. Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of Guarantor hereunder shall in no event exceed the amount
which can be guaranteed by Guarantor under applicable federal and state laws
relating to the insolvency of debtors.
5
SECTION 2.2. Acceleration of Guaranty . Guarantor agrees that,
in the event of the insolvency of Guarantor, or the inability or failure of
Guarantor to pay debts as they become due, or an assignment by Guarantor for the
benefit of creditors, or the commencement of any case or proceeding in respect
of Obligor or Guarantor under any bankruptcy, insolvency or similar federal or
state laws, and if such event shall occur at a time when any of the Guarantied
Obligations may not then be due and payable, Guarantor will pay to the Banks
forthwith the full amount which would be payable hereunder by Guarantor if all
the Guarantied Obligations were then due and payable.
SECTION 2.3. Guaranty Absolute, etc . This Agreement shall in
all respects be a continuing, absolute, unconditional and irrevocable guaranty
of payment, and shall remain in full force and effect until all Guarantied
Obligations have been paid in full and all obligations of Guarantor hereunder
shall have been paid in full. Guarantor guarantees that the Guarantied
Obligations will be paid strictly in accordance with the terms of the Conseco
Guaranty Documents and each other Loan Document under which they arise,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Guarantied Party
or any holder of any Guarantied Obligations. The liability of Guarantor under
this Agreement shall be absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the
Restructuring Document, the Existing Credit Agreement, any Existing
Conseco Guaranty Document, the Existing Agreement, the Credit
Agreement, any Conseco Guaranty Document or any other Loan Document;
(b) the failure of any Guarantied Party:
(i) to assert any claim or demand or to enforce any right
or remedy against Obligor or any other Person under the provisions of
the Credit Agreement, any Conseco Guaranty Document, any other Loan
Document or otherwise; or
(ii) to exercise any right or remedy against any other
guarantor of, or collateral securing, any Guarantied Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guarantied Obligations, or any
other extension, compromise or renewal of any Guarantied Obligations;
(d) any reduction, limitation, impairment or termination of
the Guarantied Obligations for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be
subject to (and Guarantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, the Guarantied Obligations;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to any departure from, any of the terms
of the Credit Agreement, any Conseco Guaranty Document or any other
Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to any departure from, any other
guaranty held by any Guarantied Party or any other holder of the
Guarantied Obligations; or
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(g) any other circumstance which might otherwise constitute
a defense available to, or a legal or equitable discharge of, Obligor,
any surety or any guarantor.
SECTION 2.4. Reinstatement, etc . Guarantor agrees that this
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment (in whole or in part) of any of the Guarantied
Obligations is rescinded or must otherwise be restored by any Guarantied Party
or any other holder of any Guarantied Obligations, upon the insolvency,
bankruptcy or reorganization of Obligor, all as though such payment had not been
made.
SECTION 2.5. Waiver, etc. Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guarantied Obligations, and this Agreement and any requirement that the Agent,
any other Guarantied Party or any other holder of Guarantied Obligations
protect, secure, perfect or insure any security interest or Lien, or any
property subject thereto, or exhaust any right or take any action against
Obligor or any other Person (including any other guarantor) or entity or any
collateral securing the Guarantied Obligations.
SECTION 2.6. Waiver of Subrogation; Subordination .
Guarantor hereby irrevocably waives with respect to Obligor, until the prior
indefeasible payment in full in cash of all Guarantied Obligations, any claim or
other rights which it may now or hereafter acquire against Obligor that arises
from the existence, payment, performance or enforcement of Guarantor's
obligations under this Article II, including any right of subrogation,
reimbursement, exoneration, or indemnification, any right to participate in any
claim or remedy of the Guarantied Parties against Obligor or any collateral
which the Agent now has or hereafter acquires, whether or not such claim, remedy
or right (all such claims, remedies and rights being collectively called
"Subrogation Rights") arises in equity, or under contract, statute or common
law, including the right to take or receive from Obligor, directly or
indirectly, in cash or other property or by set-off or in any manner, payment or
security on account of such claim or other rights. If any amount shall be paid
to Guarantor in violation of the preceding sentence and the Guarantied
Obligations shall not have been paid in cash, in full, such amount shall be
deemed to have been paid to Guarantor for the benefit of, and held in trust for,
the Guarantied Parties, and shall forthwith be paid to the Guarantied Parties to
be credited and applied upon the Guarantied Obligations, whether matured or
unmatured. Guarantor acknowledges that it will receive direct and indirect
benefits from the Restructuring Document, the Conseco Guaranty, and the Credit
Agreement and that the waiver set forth in this Section 2.6 is knowingly made in
contemplation of such benefits.
SECTION 2.7. Successors, Transferees and Assigns; Transfers
of Guarantied Obligations, etc . This Agreement shall:
(a) be binding upon Guarantor, and its successors,
transferees and assigns; and
(b) inure to the benefit of and be enforceable by the Agent
and each other Guarantied Party.
Without limiting the generality of clause (b), any Bank may assign or otherwise
transfer (in whole or in part) any Guarantied Obligation held by it to any other
Person upon the terms and conditions set forth in the Credit Agreement, and such
other Person shall thereupon become vested with all rights and benefits in
respect thereof granted to such Bank under any Loan Document (including this
Agreement) or otherwise.
SECTION 2.8. Payments Free and Clear of Taxes, etc . Guarantor
hereby agrees that:
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(a) any and all payments made by Guarantor hereunder shall be
made in accordance with Section 4.5 of the Credit Agreement free and
clear of, and without deduction for, any and all Charges, to the same
extent as if Guarantor were a "Borrower" thereunder;
(b) Guarantor hereby indemnifies and holds harmless each
Guarantied Party and each other holder of any Guarantied Obligation for
the full amount of any Charges paid by such Guarantied Party or such
holder, as the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto; and
(c) without prejudice to the survival of any other agreement
of Guarantor hereunder, the agreements and obligations of Guarantor
contained in this Section 2.8 shall survive the payment in full of the
Guarantied Obligations.
SECTION 2.9. Right of Offset . In addition to and not in
limitation of all rights of offset that any Guarantied Party or any other holder
of any Guarantied Obligation may have under applicable law or any other Loan
Document, subject to the terms of the Credit Agreement, each Guarantied Party or
other holder of any Guarantied Obligation shall, during the continuance of any
Event of Default and whether or not such Guarantied Party or such holder has
made any demand or whether or not Guarantor's obligations are matured, have the
right to appropriate and apply to the payment of Guarantor's obligations
hereunder all deposits (general or special, time or demand, provisional or
final) then or thereafter held by, and other indebtedness or property then or
thereafter owing to, such Guarantied Party or other holder, whether or not
related to this Agreement or any transaction hereunder.
ARTICLE III.
SUBORDINATION
SECTION 3.1. Payments on Subordinated Debt. Notwithstanding
anything to the contrary in the terms or arrangements governing the Subordinated
Debt, no payment or prepayment of principal of or interest on the Subordinated
Debt may be made, directly or indirectly, at any time after (a) (i) any
Guarantied Party has made a claim under the Conseco Guaranty in respect of the
principal amount of any of the Loans under the Credit Agreement or (ii)
Obligor's obligations under the Conseco Guaranty shall have been accelerated
(including, without limitation, pursuant to the provision in the Conseco
Guaranty that is the equivalent of Section 2.2 of this Agreement) or (b) a
Reorganization (including any proceeding in respect thereof) shall have been
commenced.
SECTION 3.2. Subordination. (a) Subject to Section 3.1,
payment of the Subordinated Debt is and shall be expressly subordinate and
junior in right of payment to the prior payment in full in cash of the Senior
Debt to the extent and in the manner set forth herein, and the Subordinated Debt
is hereby so subordinated as a claim against Subordinated Borrower or any of the
assets of Subordinated Borrower, whether such claim be (i) in the event of any
distribution of the assets of Subordinated Borrower upon any voluntary or
involuntary dissolution, winding-up, total or partial liquidation or
reorganization, or bankruptcy, insolvency, receivership or other statutory or
common law proceedings or arrangements involving Subordinated Borrower or the
readjustment of its liabilities or any assignment for the benefit of creditors
or any marshaling of its assets or liabilities (collectively called a
"Reorganization"), or (ii) other than in connection with a Reorganization, to
the prior payment in full in cash of the Senior Debt.
(b) If Subordinated Lender shall receive any payment in
violation of the terms hereof, it shall hold such payment in trust for
the benefit of the Senior Creditors and forthwith pay it over to
8
the Senior Creditors, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Debt, for application to and
payment of the Senior Debt.
(c) In the event of any Reorganization relative to
Subordinated Borrower or its properties, then all of the Senior Debt
shall first be paid in full in cash before any payment is made upon the
Subordinated Debt, and in any such proceedings any payment or
distribution of any kind or character, whether in cash or property or
securities, which may be payable or deliverable in respect of the
Subordinated Debt shall be paid or delivered directly to the Senior
Creditors, ratably according to the aggregate amounts remaining unpaid
on account of the Senior Debt, for application in payment of the Senior
Debt, unless and until all the Senior Debt is paid in full in cash, and
Subordinated Lender hereby irrevocably authorizes the Agent, as
attorney-in-fact for Subordinated Lender, to vote any claim or proof of
claim in such proceedings in respect of the Subordinated Debt, to file
or prove any claim in such proceedings in respect of the Subordinated
Debt, to demand, xxx for, collect and receive any such payment or
distribution, to apply such payment or distribution to the payment of
the Senior Debt, and to take such other action (including acceptance or
rejection of any plan of Reorganization) in the name of Subordinated
Lender or of the relevant Senior Creditors as the Agent may deem
necessary or advisable for the enforcement of the provisions hereof.
Subordinated Lender shall execute and deliver such other and further
powers of attorney, assignments, proofs of claim or other instruments,
and take such other actions, as may be requested by the Agent in order
to enable the Agent to accomplish any of the foregoing, but only with
respect to Subordinated Lender's capacity as a holder hereof and not in
respect of any other relationship between Subordinated Lender and
Subordinated Borrower. Consistent with, but not in limitation of, the
foregoing, in such an event, the Agent shall be deemed to be the
assigned (and thus the holder) of such claims or proof of claims and
shall have the right to assert and vote such claims in any
Reorganization, including, without limitation, through the filing of
any proof of claim therein and the casting of any ballots to accept or
reject any plan of reorganization proposed by, for, or with respect to
any such Reorganization.
(d) In the event that, notwithstanding the foregoing, upon any
such Reorganization, any payment or distribution of the assets of
Subordinated Borrower of any kind or character, whether in cash,
property or securities, shall be received by Subordinated Lender in
respect of the Subordinated Debt before all Senior Debt is paid in full
in cash, such payment or distribution shall be held in trust for the
Senior Creditors and shall forthwith be paid over to the Senior
Creditors, ratably according to the aggregate amounts remaining unpaid
on account of the Senior Debt, for application to the payment of the
Senior Debt until all Senior Debt shall have been paid in full in cash.
been paid in full in cash, except as expressly provided by Section 3.1,
it will not take, demand or receive, or take any action to accelerate
or collect, any payment of all or any part of the Subordinated Debt.
(f) The Senior Creditors, or any of them, may, at any time and
from time to time, without the consent of or notice to Subordinated
Lender, without incurring any responsibility to Subordinated Lender,
and without impairing or releasing any of the rights of any Senior
Creditor, or any of the obligations of Subordinated Lender:
(i) change the amount or terms of or renew or extend any
Senior Debt or enter into or amend in any manner any agreement relating
to any Senior Debt;
(ii) sell, exchange, release or otherwise deal with any
property at any time pledged or mortgaged to secure any Senior Debt;
9
(iii) release anyone liable in any manner for the payment
or collection of any Senior Debt; and
(iv) exercise or refrain from exercising any rights
against Subordinated Borrower and others (including Subordinated
Lender).
(g) Subordinated Lender hereby waives notice of or proof of
reliance by any Senior Creditor upon the provisions hereof, and the
Senior Debt shall conclusively be deemed to have been created,
contracted, incurred or maintained in reliance upon the provisions
hereof.
(h) Each Senior Creditor shall be a third-party beneficiary of
the provisions of this Section 3.2.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Each Agreement Party represents and warrants to each Guarantied Party
that:
SECTION 4.1. Authorization. Such Agreement Party (a) has the
power to execute, deliver and perform this Agreement and (b) has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement.
SECTION 4.2. No Conflict. The execution, delivery and
performance by such Agreement Party of this Agreement does not and will not (a)
contravene or conflict with any provision of any law, statute, rule or
regulation, (b) contravene or conflict with, result in any breach of, or
constitute a default under, any material agreement or instrument binding on such
Agreement Party or any of its Subsidiaries (including, without limitation, any
writ, judgment, injunction or other similar court order), (c) result in the
creation or imposition of or the obligation to create or impose any Lien upon
any of the property or assets of such Agreement Party or any of its Subsidiaries
or (d) contravene or conflict with any provision of the articles of
incorporation or bylaws of such Agreement Party.
SECTION 4.3. Binding Effect . This Agreement constitutes the
legal, valid and binding obligations of such Agreement Party, enforceable
against such Agreement Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
SECTION 4.4. Solvent . After giving effect to this Agreement,
Guarantor and its Subsidiaries, taken as a whole, are Solvent. As used in this
Section 4.4, "Solvent" shall mean, with respect to any Person on a particular
date, that on such date: (a) the fair value of the property of such Person is
greater than the amount of such Person's liabilities (including disputed,
contingent and unliquidated liabilities) as such value is established and
liabilities evaluated for purposes of Section 101(31) of the Bankruptcy Code
and, in the alternative, for purposes of the Uniform Fraudulent Transfer Act or
Uniform Fraudulent Conveyance Act; (b) the present fair saleable value of the
property of such Person is not less than the amount that will be required to pay
the probably liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize is able to realize upon its property
and pay its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of business; (d)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
10
mature; and (e) such Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
ARTICLE V.
MISCELLANEOUS
SECTION 5.1. Indemnity. Each Agreement Party agrees to
indemnify the Agent, each Bank, their Affiliates and their respective directors,
officers, employees, persons controlling or controlled by any of them or their
respective agents, consultants, attorneys and advisors (the "Indemnified
Parties") and hold each Indemnified Party harmless from and against any and all
liabilities, losses, claims, damages, costs and expenses of any kind to which
any of the Indemnified Parties may become subject, whether directly or
indirectly (including, without limitation, the reasonable fees and disbursements
of counsel for any Indemnified Party), relating to or arising out of this
Agreement; provided, that no Indemnified Party shall have the right to be
indemnified hereunder for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction. All obligations of each
Agreement Party provided for in this Section 5.1 shall survive termination of
the Credit Agreement, any Conseco Guaranty Document and this Agreement.
SECTION 5.2. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party at its address or facsimile
number set forth on the signature pages hereof or such other address or
facsimile number as such party may hereafter specify for the purpose by written
notice to the Agent. Each such notice, request or other communication shall be
effective (a) if given by facsimile, when such facsimile is transmitted to the
facsimile number specified in this Section 5.2, (b) if given by mail,
seventy-two (72) hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (c) if given by any other
means, when delivered at the address specified in this Section 5.2.
SECTION 5.3. Successors and Assigns. This Agreement, and
the terms, covenants and conditions hereof, shall be binding upon and inure to
the benefit of the parties hereto, and their respective successors and assigns,
except no Agreement Party shall be permitted to assign this Agreement nor any
interest or obligation herein without the consent of the Agent.
SECTION 5.4. SUBMISSION TO JURISDICTION, ETC . EACH AGREEMENT
PARTY AND THE AGENT HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND EACH
AGREEMENT PARTY AND THE AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE OR TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. EACH AGREEMENT
PARTY AND THE AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY
ACTION OR PROCEEDING (WHETHER BROUGHT BY ANY AGREEMENT PARTY OR ANY OF THEIR
RESPECTIVE SUBSIDIARIES, THE AGENT, ANY BANK OR OTHERWISE) IN ANY COURT HEREIN
ABOVE SPECIFIED IN THIS SECTION 5.4 AS WELL AS ANY RIGHT IT MAY NOW OR HEREAFTER
HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED, TO ANOTHER COURT
ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. EACH AGREEMENT PARTY AND
THE AGENT AGREES THAT A FINAL
11
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
SECTION 5.5. Amendments; Release . Notwithstanding anything to
the contrary contained in the Credit Agreement, the provisions of this Agreement
may from time to time be amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by each affected Agreement
Party and the Agent (with the consent of the Required Banks), and then any such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that,
except as set forth in Section 5.14 of this Agreement, no such amendment,
modification or waiver which would permit the release or termination of all or a
material portion of Guarantor's obligations under this Agreement shall be
effective without the consent of each Bank.
SECTION 5.6. Section Headings . The section headings in this
Agreement are inserted for convenience of reference and shall not be considered
a part of this Agreement or used in its interpretation.
SECTION 5.7. Acknowledgments . No action of the Agent
permitted hereunder shall in any way affect or impair the rights of the Agent
and the obligations of each Agreement Party under this Agreement. Each Agreement
Party hereby acknowledges that there are no conditions to the effectiveness of
this Agreement. Each Agreement Party hereby further acknowledges and agrees to
make such deliveries as are required of it and comply with the other provisions
applicable to it pursuant to the provisions of the Credit Agreement.
SECTION 5.8. Obligations Not Limited . All obligations of the
Guarantor and rights of the Guarantied Parties in respect of the Guarantied
Obligations expressed in this Agreement shall be in addition to and not in
limitation of those provided in applicable law or in any other written
instrument or agreement relating to any of the Guarantied Obligations.
SECTION 5.9. GOVERNING LAW . THIS AGREEMENT SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 5.10. Counterparts . This Agreement may be executed in
any number of counterparts, each of which shall for all purposes be deemed an
original, but all such counterparts shall constitute but one and the same
agreement. Each Agreement Party hereby acknowledges receipt of a true, correct
and complete counterpart of this Agreement.
SECTION 5.11. Agent . The Agent acts herein as agent for
itself, the Banks and any and all future holders of the Guarantied Obligations.
SECTION 5.12. WAIVER OF TRIAL BY JURY . EACH AGREEMENT PARTY
AND THE AGENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY
RIGHTS UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT AND AGREES THAT
ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY; THIS PROVISION IS A MATERIAL
12
INDUCEMENT FOR THE GUARANTIED PARTIES ENTERING INTO THE RESTRUCTURING DOCUMENT.
SECTION 5.13. No Limitation on Remedies . No failure to
exercise and no delay in exercising, on the part of the Agent or any other
Guarantied Party, any right, remedy, power or privilege hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
SECTION 5.14. Release of This Agreement . This Agreement shall
be terminated and Guarantor shall be released from all of its obligations
hereunder on the first date after the Near-Term Facilities Termination Date on
which Conseco, Inc. has Investment Grade Ratings Status, as long as no Default
or Event of Default shall have occurred and be continuing on such date.
IN WITNESS WHEREOF, each Agreement Party has caused this Guaranty and
Subordination Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.
CIHC, INCORPORATED, as Guarantor and
Subordinated Borrower
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Address for Notices:
00000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax: 000-000-0000
CONSECO, INC., as Obligor and Subordinated Lender
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and Acting
Chief Financial Officer
Address for Notices:
00000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax: 000-000-0000
COLLATERAL AGREEMENT
made by
CONSECO, INC.
and
CIHC, INCORPORATED
in favor of
THE CHASE MANHATTAN BANK,
as Collateral Agent
Dated as of May 30, 2000
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS....................................................................................1
1.1 Definitions........................................................................................1
1.2 Other Definitonal Provisions.......................................................................5
SECTION 2. GRANT OF SECURITY INTEREST .......................................................................5
SECTION 3. REPRESENTATIONS AND WARRANTIES...................................................................6
3.1 Title; No Other Liens..............................................................................6
3.2 Perfected First Priority Liens.....................................................................6
3.3 Investment Property................................................................................6
SECTION 4. COVENANTS........................................................................................7
4.1 Delivery of Instruments and Certificated Securities................................................7
4.2 Payment of Obligations.............................................................................7
4.3 Maintenance of Perfected Security Interest; Further Documentation..................................7
4.4 Investment Property................................................................................7
SECTION 5. REMEDIAL PROVISIONS..............................................................................9
5.1 Investment Property................................................................................9
5.2 Proceeds to be Turned Over To Collateral Agent.....................................................10
5.3 Application of Proceeds............................................................................10
5.4 Code and Other Remedies............................................................................11
5.5 Registration Rights................................................................................11
5.6 Waiver; Deficiency.................................................................................12
SECTION 6. THE COLLATERAL AGENT.............................................................................13
6.1 Collateral Agent's Appointment as Attorney-in-Fact, etc............................................13
6.2 Duty of Collateral Agent...........................................................................14
6.3 Execution of Financing Statements..................................................................15
6.4 Authority of Collateral Agent......................................................................15
SECTION 7. MISCELLANEOUS....................................................................................15
7.1 Amendments.........................................................................................15
7.2 Notices............................................................................................15
7.3 No Waiver by Course of Conduct; Cumulative Remedies................................................16
7.4 Enforcement Expenses; Indemnification..............................................................16
7.5 Successors and Assigns.............................................................................16
7.6 Counterparts.......................................................................................17
7.7 Severability.......................................................................................17
7.8 Section Headings...................................................................................17
7.9 Integration........................................................................................17
7.10 GOVERNING LAW......................................................................................17
7.11 Acknowledgments....................................................................................17
i
Page
----
7.12 Releases..........................................................................................17
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
ii
COLLATERAL AGREEMENT
COLLATERAL AGREEMENT, dated as of May 30, 2000, made by each
of the signatories hereto (together with any other entity that may become a
party hereto as provided herein, the "Grantors"), in favor of THE CHASE
MANHATTAN BANK, as collateral agent (in such capacity, the "Collateral Agent")
for the Secured Parties (as defined below).
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to the Credit Agreement, dated as of May 30,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the individual borrowers thereunder (the
"Borrowers"), the banks and other financial institutions (the "Lenders") from
time to time party thereto, and The Chase Manhattan Bank, as Administrative
Agent (in such capacity, the "Administrative Agent"), the Lenders extended the
maturity date of term loans made to the Borrowers thereunder;
WHEREAS, pursuant to the Senior Secured Revolving Credit
Agreement (the "May 2000 Credit Agreement"), dated as of May 30, 2000, among
Conseco, Inc. ("Conseco"), the banks and other financial institutions (the "May
2000 Lenders") from time to time party thereto, and The Chase Manhattan Bank, as
administrative agent (in such capacity, the "May 2000 Administrative Agent"),
the May 2000 Lenders have agreed to make revolving credit loans to Conseco on
the terms and conditions set forth therein;
WHEREAS, each Grantor will derive substantial direct and
indirect benefit from the Credit Agreement and the May 2000 Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to enter into the Credit Agreement and the May 2000 Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Collateral Agent for the ratable benefit of the Secured Parties; and
WHEREAS, it is a requirement under each of the Indentures that
the assets in which a security interest is created hereunder must secure the
Public Debt Securities issued thereunder equally and ratably with all other
obligations secured hereby;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
the May 2000 Credit Agreement and to satisfy the requirement referred to in the
preceding paragraph, each Grantor hereby agrees with the Collateral Agent, for
the ratable benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and
2
the following terms are used herein as defined in the New York UCC: Certificated
Security and Instruments.
(b) The following terms shall have the following meanings:
"Agreement": this Collateral Agreement, as the same may be
amended,supplemented or otherwise modified from time to time.
"Capital Stock": any and all Shares, interests, participations
or other equivalent (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase any of the foregoing.
"CIHC": CIHC, Incorporated, a Delaware corporation, and a
direct wholly owned Subsidiary of Conseco.
"Collateral": as defined in Section 2.
"Collateral Account": any collateral account established by
the Collateral Agent as provided in Section 5.2.
"Default" as defined in either the Credit Agreement or the May
2000 Credit Agreement.
"D & O Grantor Obligations": with respect to any Grantor, all
obligations and liabilities of such Grantor which may arise under or in
connection with Guaranty, this Agreement or any other Loan Document to
which such Grantor is a party, in each case whether on account of
guarantee obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Collateral Agent, the Administrative Agent or the Lenders that
are required to be paid by such Grantor pursuant to the terms of this
Agreement or any other Loan Document).
"Event of Default" as defined in the Credit Agreement or the
May 2000 Credit Agreement.
"Grantor Obligations" collectively, (i) the D & O Grantor
Obligations and (ii) the May 2000 Grantor Obligations.
"Holder Representative": (i) in respect of the D & O Grantor
Obligations, the Administrative Agent, (ii) in respect of the May 2000
Grantor Obligations, the May 2000 Administrative Agent, (iii) in
respect of the 1993 Indenture Obligations, the 1993 Indenture Trustee
and (iv) in respect of the 1994 Indenture Obligations, the 1994
Indenture Trustee.
3
"Holders": collectively, (i) the holders of the 1993 Indenture
Obligations (including, when the context permits, the 1993 Indenture
Trustee acting on behalf of such holders) and (ii) the holders of the
1994 Indenture Obligations (including, when the context permits, the
1994 Indenture Trustee acting on behalf of such holders).
"Indentures": the collective reference to the 1993 Indenture
and the 1994 Indenture.
"Investment Property": the collective reference to all Pledged
Obligations and all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property.
"May 2000 Grantor Obligations": with respect to any Grantor,
all obligations and liabilities of such Grantor which may arise under
or in connection with the May 2000 Credit Agreement or any other Loan
Document (as defined in the May 2000 Credit Agreement) to which such
Grantor is a party, in each case whether on account of guarantee
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Collateral Agent, the May 2000 Administrative Agent or the May
0000 Xxxxxxx that are required to be paid by such Grantor pursuant to
the terms of the May 2000 Credit Agreement or any other Loan Document
(as defined in the May 2000 Credit Agreement)).
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Pledged Obligations": all pledged notes listed on Schedule 2,
and Indebtedness owing by CIHC to any Grantor together with any
interest, fees and other amounts owing by CIHC to such Grantor in
respect thereof.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options
or rights of any nature whatsoever in respect of the Capital Stock of
CIHC, Conseco Finance or Conseco Capital Management, Inc. that may be
issued or granted to, or directly held by, any Grantor while this
Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.
"Public Debt Securities": collectively, (i) the 1993 Indenture
Securities and (ii) the 1994 Indenture Securities.
4
"Public Debt Trustees": collectively, (i) the 1993 Indenture
Trustee and (ii) the 1994 Indenture Trustee.
"Secured Obligations": the collective reference to (a) the
Grantor Obligations of each Grantor, (b) the 0000 Xxxxxxxxx
Obligations, (c) the 1994 Indenture Obligations and (d) the Collateral
Agent Fees (as defined in the Collateral Sharing Agreement).
"Secured Parties": the collective reference to (a) the
Lenders, (b) the May 2000 Lenders, (c) the Holders, (d) the
Administrative Agent, (e) the May 2000 Administrative Agent and (f) the
Collateral Agent.
"Securities Act": the Securities Act of 1933, as amended.
"Shared Collateral" shall mean the collective reference to (i)
"Collateral" under and as defined in this Agreement and (ii) unless
otherwise expressly provided therein, all other collateral under any
other Shared Collateral Security Document.
"Shared Collateral Security Documents" shall mean (i) this
Agreement and (ii) any other security document entered into by any
Grantor in favor of the Collateral Agent that expressly provides that
all or any portion of the collateral thereunder shall constitute
"Shared Collateral" for the purposes of this Agreement.
"1993 Indenture Obligations": the unpaid principal of, and
premium, if any, and interest on, the 1993 Indenture Securities
(including, without limitation, interest accruing at the then
applicable rate provided in the instruments governing the 1993
Indenture Securities after the maturity of the 1993 Indenture
Securities and interest accruing at the then applicable rate provided
in such instruments after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding).
"1993 Indenture Securities": the securities issued pursuant to
the 1993 Indenture.
"1993 Indenture Trustee": Shawmut Bank Connecticut, National
Association, in its capacity as trustee under the 1993 Indenture, and
any successor trustee appointed under the 1993 Indenture.
"1994 Indenture Obligations": the unpaid principal of, and
premium, if any, and interest on, the 1994 Indenture Securities
(including, without limitation, interest accruing at the then
applicable rate provided in the instruments governing the 1994
Indenture Securities after the maturity of the 1994 Indenture
Securities and interest accruing at the then applicable rate provided
in such instruments after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
5
whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding).
"1994 Indenture Securities": the securities issued pursuant to
the 1994 Indenture.
"1994 Indenture Trustee": The Bank of New York (who assumed
the responsibilities of LTCB Trust Company as of June 1, 1999), in its
capacity as trustee under the 1994 Indenture, and any successor trustee
appointed under the Indenture.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Collateral
Agent, and hereby grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a security interest in, all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:
(a) all Investment Prtoperty;
(b) all books and records pertaining to the Collateral
referred to in clauses (a) and (c) of this paragraph; and
(c) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
6
SECTION 3. REPRESENTATIONS AND WARRANTIES
Each Grantor hereby represents and warrants to the Collateral
Agent that:
3.1 Title; No Other Liens. Except for the security interest
granted to the Collateral Agent for the ratable benefit of the Secured Parties
pursuant to this Agreement, such Grantor owns each item of the Collateral free
and clear of any and all Liens or claims of others. No financing statement or
other public notice with respect to all or any part of the Collateral is on file
or of record in any public office, except such as have been filed in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, pursuant
to this Agreement.
3.2 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the Collateral
Agent in completed and duly executed form) will constitute valid perfected
security interests in all of the Collateral in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, as collateral security for the
Secured Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof.
3.3 Investment Property. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by the Grantor.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Obligations constitutes the legal,
valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
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SECTION 4. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent
that, from and after the date of this Agreement until the Grantor Obligations
shall have been paid in full:
4.1 Delivery of Instruments and Certificated Securities. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument or Certificated Security, such Instrument or
Certificated Security shall be immediately delivered to the Collateral Agent,
duly indorsed in a manner satisfactory to the Collateral Agent, to be held as
Collateral pursuant to this Agreement.
4.2 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without limitation,
claims for labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount or validity
thereof is currently being contested in good faith by appropriate proceedings,
reserves in conformity with GAAP with respect thereto have been provided on the
books of such Grantor and such proceedings could not reasonably be expected to
result in a Material Adverse Effect.
4.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having the priority described in
Section 3.2 and shall defend such security interest against the claims and
demands of all Persons whomsoever.
(b) At any time and from time to time, upon the written
request of the Collateral Agent, and at the sole expense of such Grantor, such
Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the
Collateral Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) filing any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property and any other
relevant Collateral, taking any actions necessary to enable the Collateral Agent
to obtain "control" (within the meaning of the applicable Uniform Commercial
Code) with respect thereto.
4.4 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor
8
shall accept the same as the agent of the Collateral Agent and the other Secured
Parties, hold the same in trust for the Collateral Agent and the other Secured
Parties and deliver the same forthwith to the Collateral Agent in the exact form
received, duly indorsed by such Grantor to the Collateral Agent, if required,
together with an undated stock power covering such certificate duly executed in
blank by such Grantor and with, if the Collateral Agent so requests, signature
guaranteed, to be held by the Collateral Agent, subject to the terms hereof, as
additional collateral security for the Secured Obligations. Any sums paid upon
or in respect of the Investment Property upon the liquidation or dissolution of
any Issuer shall be paid over to the Collateral Agent to be held by it hereunder
as additional collateral security for the Secured Obligations, and in case any
distribution of capital shall be made on or in respect of the Investment
Property or any property shall be distributed upon or with respect to the
Investment Property pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Collateral Agent, be delivered to the Collateral Agent to be held
by it hereunder as additional collateral security for the Secured Obligations.
If any sums of money or property so paid or distributed in respect of the
Investment Property shall be received by such Grantor, such Grantor shall, until
such money or property is paid or delivered to the Collateral Agent, hold such
money or property in trust for the Collateral Agent and the other Secured
Parties, segregated from other funds of such Grantor, as additional collateral
security for the Secured Obligations.
(b) Without the prior written consent of the Collateral Agent,
such Grantor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
excluding any issuance (A) for fair value as determined by the Board of
Directors of such Grantor and (B) pursuant to the warrant issued on May 11, 2000
to Xxxxxx Brothers Holdings Inc. in respect of up to 5% of the common stock of
Conseco Finance, (ii) sell, assign, transfer, exchange, or otherwise dispose of,
or grant any option or waive any rights with respect to, the Investment Property
or Proceeds thereof (except pursuant to a transaction expressly permitted by the
Loan Documents or pursuant to the warrant issued on May 11, 2000 to Xxxxxx
Brothers Holdings Inc. in respect of up to 5% of the common stock of Conseco
Finance), (iii) create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with respect to, any of the Investment Property or
Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or any security interest securing additional
indebtedness of Conseco or any of its Subsidiaries sharing equally and ratably
in the Shared Collateral at the request of Conseco and consented to by the
Collateral Agent in accordance with Section 6.3 of the Collateral Sharing
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Collateral Agent to sell, assign or transfer
any of the Investment Property or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Investment Property issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the
9
Collateral Agent promptly in writing of the occurrence of any of the events
described in Section 4.4(a) with respect to the Investment Property issued by it
and (iii) the terms of Sections 5.1(c) and 5.5 shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it pursuant to
Section 5.1(c) or 5.5 with respect to the Investment Property issued by it.
SECTION 5. REMEDIAL PROVISIONS
5.1 Investment Property. (a) Unless an Event of Default shall
have occurred and be continuing and the Collateral Agent shall have given notice
to the Grantor of the Collateral Agent's intent to exercise its corresponding
rights pursuant to Section 5.1(b), each Grantor shall be permitted to receive
all cash dividends paid in respect of the Pledged Stock and all payments (other
than payments or prepayments of principal) made in respect of the Pledged
Obligations, in each case paid in the normal course of business of the relevant
Issuer, to the extent permitted by the Loan Documents and the Loan Documents (as
defined in the May 2000 Credit Agreement) (any such dividends or payments,
"Excluded Payments"), and to exercise all voting and corporate rights with
respect to the Investment Property; provided, however, that no vote shall be
cast or corporate right exercised or other action taken which could reasonably
be expected to impair the Collateral or which would be inconsistent with or
result in any violation of any provision of this Agreement or any other Loan
Document or the Loan Documents (as defined in the May 2000 Credit Agreement).
(b) If an Event of Default shall occur and be continuing and
the Collateral Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Collateral Agent shall have the right
to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Investment Property and make application thereof to the Secured
Obligations in the order specified in the Collateral Sharing Agreement, and (ii)
any or all of the Investment Property shall be registered in the name of the
Collateral Agent or its nominee, and the Collateral Agent or its nominee may
thereafter exercise (x) (if, in addition, all of the Liabilities shall be due
and payable) all voting, corporate and other rights pertaining to such
Investment Property at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Investment Property as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the
Investment Property upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by any Grantor or the Collateral Agent of any
right, privilege or option pertaining to such Investment Property, and in
connection therewith, the right to deposit and deliver any and all of the
Investment Property with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Collateral Agent
may determine), all without liability except to account for property actually
received by it, but the Collateral Agent shall have no duty to any Grantor to
exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing.
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(c) Each Grantor hereby authorizes and instructs each Issuer
of any Investment Property pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Collateral Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Investment Property directly to the Collateral Agent.
(d) Notwithstanding the foregoing, neither Collateral Agent
nor its nominee may exercise any voting, corporate or other rights of control
pertaining to such Investment Property at any meeting of shareholders of the
relevant Issuer or Issuers (or any of their respective Subsidiaries or
affiliates) or otherwise (i) unless and until it has received any and all
material consents or approvals required for such exercise from any regulatory or
governmental agency (including, but not limited to, insurance, banking and
gaming commissions or agencies) having jurisdiction with respect to the Grantor
or the Issuer (or any of their respective Subsidiaries or affiliates) or (ii) if
to do so would violate any material statute, law, rule or regulation governing
the ownership, change of ownership, control, or change of control of such
Grantor or Issuer (or any of their respective Subsidiaries or affiliates).
5.2 Proceeds to be Turned Over To Collateral Agent. If an
Event of Default shall occur and be continuing or, in the case of any Proceeds
other than Excluded Payments (without duplication of any funds used to purchase
loans pursuant to Section 6.4(b) of the Guaranty or prepay loans pursuant to
Section 2.6(b)(ii) of the May 2000 Credit Agreement), whether or not an Event of
Default shall have occurred and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and other near-cash items shall be held by
such Grantor in trust for the Collateral Agent and the other Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Collateral Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Collateral Agent,
if required). All Proceeds received by the Collateral Agent hereunder shall be
held by the Collateral Agent in a Collateral Account maintained under its sole
dominion and control. All Proceeds while held by the Collateral Agent in a
Collateral Account (or by such Grantor in trust for the Collateral Agent and the
other Secured Parties) shall continue to be held as collateral security for all
the Secured Obligations and shall not constitute payment thereof until applied
as provided in Section 5.3.
5.3 Application of Proceeds. At such intervals as may be
agreed upon by Conseco and the Collateral Agent, the Collateral Agent may, or,
if an Event of Default shall have occurred and be continuing or in connection
with a mandatory purchase of Loans pursuant to Section 6.4(a) or 6.4(b) of the
Guaranty, the Collateral Agent shall, promptly apply all or any part of Proceeds
held in any Collateral Account in payment of the Secured Obligations in the
order specified in the Collateral Sharing Agreement.
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5.4 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Collateral Agent, on behalf of the Secured Parties,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the New York UCC or any other applicable law. Without limiting the
generality of the foregoing, the Collateral Agent, without demand of performance
or other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon any Grantor or
any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Collateral Agent or any
other Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Collateral Agent or
any other Secured Party shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in any Grantor, which right or equity is hereby waived and
released. Each Grantor further agrees, at the Collateral Agent's request, to
assemble the Collateral and make it available to the Collateral Agent at places
which the Collateral Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Collateral Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 5.4, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Collateral Agent and the other Secured
Parties hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Secured Obligations, in
the order specified in the Collateral Sharing Agreement, and only after such
application and after the payment by the Collateral Agent of any other amount
required by any provision of law, including, without limitation, Section
9-504(1)(c) of the New York UCC, need the Collateral Agent account for the
surplus, if any, to any Grantor. To the extent permitted by applicable law, each
Grantor waives all claims, damages and demands it may acquire against the
Collateral Agent or any other Secured Party arising out of the exercise by them
of any rights hereunder. A notice of a proposed sale or other disposition of a
substantial portion of the Collateral shall be required, and such notice shall
be deemed reasonable and proper if given at least 20 days before such sale or
other disposition.
5.5 Registration Rights. (a) If the Collateral Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 5.4, and if in the opinion of the Collateral Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such
12
other acts as may be, in the opinion of the Collateral Agent, necessary or
advisable to register the Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) use its best efforts to cause
the registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Collateral Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Collateral Agent shall designate and
to make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 5.5 valid and
binding and in compliance with any and all other applicable laws, rules or
regulations. Each Grantor further agrees that a breach of any of the covenants
contained in this Section 5.5 will cause irreparable injury to the Collateral
Agent and the other Secured Parties, that the Collateral Agent and the other
Secured Parties have no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 5.5 shall
be specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants. In exercising its rights hereunder, the Collateral Agent will
make a good faith effort to share access to the books and records that
constitute Collateral with the applicable Grantor to the extent necessary to
enable the Grantor to continue to conduct its business.
5.6 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of the
New York UCC. The obligors under the Loan Documents and the Loan Documents (as
defined under the May 2000 Credit
13
Agreement) shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay the Secured
Obligations and the fees and disbursements of any attorneys employed by the
Collateral Agent or any other Secured Party to collect such deficiency.
SECTION 6. THE COLLATERAL AGENT
6.1 Collateral Agent's Appointment as Attorney-in-Fact, etc.
(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due with
respect to any Collateral and file any claim or take any other action
or proceeding in any court of law or equity or otherwise deemed
appropriate by the Collateral Agent for the purpose of collecting any
and all such moneys due with respect to any Collateral whenever
payable;
(ii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(iii) execute, in connection with any sale provided for in
Section 5.4 or 5.5, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(iv) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Collateral Agent or as the Collateral
Agent shall direct; (2) ask or demand for, collect, and receive payment
of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any
Collateral; (3) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (4) defend any suit, action
or proceeding brought against such Grantor with respect to any
Collateral; (5) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or
releases as the
14
Collateral Agent may deem appropriate; and (7) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Collateral Agent were the absolute owner thereof for all purposes, and
do, at the Collateral Agent's option and such Grantor's expense, at any
time, or from time to time, all acts and things which the Collateral
Agent deems necessary to protect, preserve or realize upon the
Collateral and the Collateral Agent's and the other Secured Parties'
security interests therein and to effect the intent of this Agreement,
all as fully and effectively as such Grantor might do.
Anything in this Section 6.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 6.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral Agent, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in
connection with actions undertaken as provided in this Section 6.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Base Rate Loans under the Credit
Agreement, from the date of payment by the Collateral Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
6.2 Duty of Collateral Agent. The Collateral Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9- 207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral Agent
deals with similar property for its own account. Neither the Collateral Agent,
any other Secured Party nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the
Collateral Agent and the other Secured Parties hereunder are solely to protect
the Collateral Agent's and the other Secured Parties' interests in the
Collateral and shall not impose any duty upon the Collateral Agent or any other
Secured Party to exercise any such powers. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be
15
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct. The Collateral Agent will act
in good faith towards each of the Holder Representatives in carrying out its
duties and responsibilities under this Agreement and any Shared Collateral
Security Document, including executing and delivering any documents reasonably
requested to be so executed and delivered pursuant to either Indenture.
6.3 Execution of Financing Statements. Pursuant to Section
9-402 of the New York UCC and any other applicable law, each Grantor authorizes
the Collateral Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Collateral
Agent determines appropriate to perfect the security interests of the Collateral
Agent under this Agreement. A photographic or other reproduction of this
Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.
6.4 Authority of Collateral Agent. Each Grantor and each
Secured Party by accepting the benefits of this Agreement acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the other
Secured Parties, be governed by the Credit Agreement, the May 2000 Credit
Agreement, the Collateral Sharing Agreement and such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Collateral Agent and the Grantors, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and no Grantor or Secured Party
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.
SECTION 7. MISCELLANEOUS
7.1 Amendments. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 6.3 of the Collateral Sharing Agreement.
7.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 6.1 of the Collateral Sharing Agreement; provided that
any such notice, request or demand to or upon any Grantor shall be addressed to
such Grantor at its notice address set forth on Schedule 1 and that any such
notice, request or demand to or upon the Collateral Agent shall be addressed to
the Collateral Agent at its notice address set forth in the Collateral Sharing
Agreement.
16
7.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Collateral Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 7.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default. No failure to exercise,
nor any delay in exercising, on the part of the Collateral Agent or any other
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Collateral Agent or any
other Secured Party of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Collateral Agent or
such Secured Party would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
7.4 Enforcement Expenses; Indemnification. (a) Each Grantor
agrees to pay or reimburse the Collateral Agent for all its costs and expenses
incurred in enforcing or preserving any rights under this Agreement and the
other Loan Documents to which such Grantor is a party, including, without
limitation, the fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to the Collateral Agent.
(b) Each Grantor agrees to pay, and to save the Collateral
Agent and the other Secured Parties harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
(c) Each Grantor agrees to pay, and to save the Collateral
Agent and the other Secured Parties harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement to the extent provided in Sections 7.1 and 7.2 of the Guaranty.
(d) The agreements in this Section 7.4 shall survive repayment
of the Secured Obligations and all other amounts payable under (i) the Credit
Agreement and the other Loan Documents and (ii) the May 2000 Credit Agreement
and the Loan Documents (as defined therein).
7.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Collateral Agent and the other Secured Parties and their successors and
assigns; provided that no Grantor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Collateral Agent.
17
7.6 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
7.7 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7.8 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
7.9 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Collateral Agent and the other
Secured Parties with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the Collateral
Agent or any other Secured Party relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in the other Loan Documents as
defined in each of the Credit Agreement and the May 2000 Credit Agreement.
7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
7.11 Acknowledgments. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
(b) neither the Collateral Agent nor any other Secured Party
has any fiduciary relationship with or duty to any Grantor arising out
of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand,
and the Collateral Agent and the other Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Grantors and
the Secured Parties.
7.12 Releases. (a) At such time as (i) Guarantor has delivered
to the Collateral Agent a written request to do so and Guarantor or a designee
shall have purchased all of the Loans and all Liabilities owed to the Lenders
(excluding Guarantor or its designee) have been
18
paid in full in cash and the "Obligations" (as defined in the May 2000 Credit
Agreement) have been paid in full in cash and the commitments under the May 2000
Credit Agreement have been terminated or (ii) the Grantor Obligations and any
fees and other amounts owed to the Collateral Agent shall have been paid in full
in cash (so long as at such time (A) the payment of any of the other Secured
Obligations has not been accelerated and (B) a payment default in respect of the
principal or interest of such Secured Obligations shall not have occurred and be
continuing are not due and payable), and (1) the Administrative Agent on behalf
of the Lenders and (2) the May 2000 Administrative Agent on behalf of the May
2000 Lenders, in each case has so instructed the Collateral Agent in writing,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Collateral Agent and each Grantor hereunder shall terminate,
all without delivery of any instrument or performance of any act by any party,
and all rights to the Collateral shall revert to the Grantors. At the request
and sole expense of any Grantor following any such termination, the Collateral
Agent shall deliver to such Grantor any Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination. In addition, the
Collateral Agent shall release the Collateral upon directions from the
Administrative Agent and the May 2000 Administrative Agent as provided in
Section 6.9 of the Collateral Sharing Agreement.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Loan
Documents and the Loan Documents (as defined in the May 2000 Credit Agreement),
then the Collateral Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral.
(c) The Collateral Agent will, at any time, upon the written
instruction of the Administrative Agent and the May 2000 Administrative Agent,
at the sole expense of the relevant Grantor, execute and deliver to the relevant
Grantor all releases or other documents reasonably necessary or desirable for
the release of the Liens created hereby on the Collateral specified by the
Administrative Agents in such instruction.
(d) By acceptance of the benefits hereof, each Secured Party
acknowledges and consents to the provisions of this Section 7.13, agrees that
the Collateral Agent shall incur no liability whatsoever to any Secured Party
for any release effected by the Collateral Agent in accordance with this Section
7.13 and agrees that the Administrative Agent and the May 2000 Administrative
Agent shall incur no liability whatsoever to any Secured Party for any release
directed or consented to by it, other than as otherwise expressly agreed to in
writing.
IN WITNESS WHEREOF, each of the undersigned has caused this
Collateral Agreement to be duly executed and delivered as of the date first
above written.
CONSECO, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Title: Senior Vice President and
Acting Chief Financial
Officer
STATE OF INDIANA )
) ss:
COUNTY OF XXXXXXXX )
On the __ day of May in the year 2000, before me, the
undersigned, personally appeared ______________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
______________________________
Notary Public
My Commission Expires:
CIHC, INCORPORATED
By: /s/ Xxxxx X. Xxxx
------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
STATE OF )
) ss:
COUNTY OF )
On the __ day of May in the year 2000, before me, the
undersigned, personally appeared ______________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
Notary Public
My Commission Expires:
Schedule 2
----------
DESCRIPTION OF INVESTMENT PROPERTY
Pledged Stock:
Stock Number Percent of
Class of Certificate of Outstanding
Issuer Holder Stock Number Shares Shares
----------------------- ---------------- ----------------- ------------- ------ ----------
CIHC, Incorporated Conseco Inc. Common 2 1,000 99.9%
1994 Series 002 963.61 .9%
Preferred 007 125.269 .1%
$2.32 P-2 940,000 78%
Redeemable
Cumulative
Preferred
Conseco Finance CIHC, Common 005 1.5 1.5%
Corp. Incorporated 006 101.5 98.5%
Conseco Capital
Management, Inc. Conseco Inc. Common 2 100 100%
Pledged Obligations:
Stated Principal Approximate
Amount of Amount
Payor Payee Note Outstanding Date of Note
----- ----- --------------------- ----------- ------------
CIHC, Incorporated (as Conseco, Inc. $400,000,000 $365,000,000 Nov. 27, 1996
successor to Bankers
Life Holding
Corporation)
CIHC, Incorporated (as Conseco, Inc. $79,798,865.71 $74,600,000 Jan. 1, 1998
successor to American
Life Holding Company)
CIHC, Incorporated (as Conseco, Inc. $36,000,000 $36,000,000 May 26, 2000
successor to American
Life Holding Company)
CIHC, Incorporated Conseco, Inc. $4,000,000,000 $1,961,200,000 May 26, 2000
Conseco Finance Corp. Conseco, Inc. $1,750,799,080 $1,750,799,080 May 26, 2000
Schedule 3
-----------
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Actions with respect to Pledged Stock and Pledged Obligations
-------------------------------------------------------------
By (i) delivery of any certificates in respect of the Pledged Stock and
Pledged Obligations together with undated stock powers, in respect of the
Pledged Stock, and, note powers, in respect of the Pledged Obligations, in each
case, undated and executed in blank and (ii) possession by the Administrative
Agent of the same.
UCC filings:
Conseco, Inc.
Secretary of State, Indiana
CIHC, Incorporated
------------------
Secretary of State, Delaware
FIRST AMENDMENT TO COLLATERAL AGREEMENT
THIS FIRST AMENDMENT TO THE COLLATERAL AGREEMENT, dated as of
September 22, 2000 (this "Amendment"), is made by Conseco, Inc., an Indiana
corporation ("Conseco"), and CIHC, Incorporated, a Delaware corporation ("CIHC";
together with Conseco, the "Grantors"), in favor of The Chase Manhattan Bank, as
collateral agent (the "Collateral Agent") for the Secured Parties (as defined in
the Collateral Agreement referred to below).
W I T N E S S E T H:
WHEREAS, Conseco, the banks and other financial institutions
from time to time party thereto, and The Chase Manhattan Bank, as administrative
agent, are party to that certain Senior Secured Revolving Credit Agreement,
dated as of May 30, 2000 (as amended, the "May 2000 Credit Agreement");
WHEREAS, certain individuals listed as borrowers on the
signature pages thereto, the banks and other financial institutions from time to
time party thereto, and The Chase Manhattan Bank, as administrative agent, are
party to that certain Credit Agreement, dated as of May 30, 2000 (the "Credit
Agreement");
WHEREAS, as a condition precedent to the obligation of the
banks to enter into the May 2000 Credit Agreement and the Credit Agreement, the
Grantors executed and delivered the Collateral Agreement, dated as of May 30,
2000 (the "Collateral Agreement"), to the Collateral Agent for the benefit of
the Secured Parties;
WHEREAS, (i) the parties thereto have agreed to amend the May
2000 Credit Agreement on the terms and conditions set forth in the Second
Amendment, dated as of the date hereof (the "Second Amendment"), and (ii) the
parties thereto have entered into an Agreement relating to the Credit Agreement,
dated as of the date hereof (the "D&O Agreement"); and
WHEREAS, in connection with the Second Amendment and the D&O
Agreement, the Grantors and the Collateral Agent have agreed to amend the
Collateral Agreement on the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises, the parties
hereto hereby agree as follows:
2
1. Definitions. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Collateral
Agreement.
2. Amendments to Collateral Agreement. The Collateral
Agreement is hereby amended by (i) adding the words "or Conseco Finance" after
each of the references to "CIHC" in the definition of "Pledged Obligations" and
(ii) replacing Schedule 2 thereto with the form of Schedule 2 attached hereto as
Annex I (and hereinafter, all Pledged Obligations and Pledged Stock referred to
on such revised Schedule 2 shall include all replacements, substitutions and
refinancings of the Investment Property described therein). It is understood
that any capitalized terms used in the Collateral Agreement or the Collateral
Sharing Agreement that are defined by reference to the May 2000 Credit Agreement
or the Credit Agreement shall be supplemented or (to the extent of any conflict)
replaced, as applicable, by the definitions assigned to such terms in the
Appendix delivered in connection with the Second Amendment or the D&O Agreement,
as the case may be.
3. Conditions to Effectiveness of this Amendment. This
Amendment shall become effective upon the (i) receipt by the Collateral Agent of
duly executed counterparts of this Amendment from the parties hereto, (ii)
effectiveness of the Second Amendment in accordance with the terms thereof,
(iii) effectiveness of the D&O Agreement in accordance with the terms thereof,
(iv) execution of UCC-3 filings to provide for the amendment to the Collateral
under the Collateral Agreement set forth herein and (v) delivery to the
Collateral Agent of the Investment Property referred to on revised Schedule 2
not previously delivered to the Collateral Agent, together with corresponding
executed and undated stock powers and note powers, as applicable.
4. Certain Representations and Warranties by the Grantors. In
order to induce the Collateral Agent to enter into this Amendment, the Grantors
represent and warrant that as of the date hereof and after giving effect to this
Amendment (a) the representations and warranties made by each of the Grantors in
the Collateral Agreement are true and correct in all material respects (except
to the extent that such representations and warranties are expressly stated to
relate to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date) and (b) no Default or Event of Default has occurred and is
continuing as of the date hereof; provided, that each reference to the Agreement
therein shall be deemed to be a reference to the Agreement after giving effect
to this Amendment.
5. Miscellaneous. The parties hereto hereby further agree as
follows:
5.1. Further Assurances. Each of the parties hereto hereby
agrees to do such further acts and things and to execute, deliver and
acknowledge such additional agreements, powers and instruments as the Collateral
Agent may reasonably request which are required to carry into effect the
purposes of this Amendment and the Collateral Agreement, as amended hereby.
5.2.Payment of Costs and Expenses. Conseco agrees to pay on
demand all expenses of the Collateral Agent (including the fees and
out-of-pocket expenses of counsel to the Collateral Agent) in connection with
the negotiation, preparation, execution and delivery of this Amendment.
5.3. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
3
5.4. Counterparts. This Amendment may be executed in one or
more counterparts (including by facsimile transmission), each of which, when
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same document
with the same force and effect as if the signatures of all of the parties were
on a single counterpart, and it shall not be necessary in making proof of this
Amendment to produce more than one such counterpart.
5.5. Headings. Headings used in this Amendment are for
convenience of reference only and shall not affect the construction of this
Amendment.
5.6. Effect of Amendment. The parties hereto acknowledge and
agree that the Liens and security interests as granted under the Collateral
Agreement are in all respects continuing and in full force and effect and secure
the Secured Obligations.
IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered as of the date first above written.
CONSECO, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Title: Senior Vice President and
Acting Chief Financial Officer
CIHC, INCORPORATED
By: /s/ Xxxxx X. Xxxx
-------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK, as Collateral
Agent
By: /s/
--------------------------------
Title:
Consented to:
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Bank
By: /s/
----------------------
Title:
BANK OF AMERICA, N.A., as a Bank
By: /s/
----------------------
Title:
Annex I
Schedule 2
DESCRIPTION OF INVESTMENT PROPERTY
Pledged Stock:
Stock Percent of
Class of Certificate Number of Outstanding
Issuer Holder Stock Number Shares Shares
------ ------ ----- ------ ------ ------
CIHC, Incorporated Conseco, Common 2 1,000 99.9%
Inc.
1994 Series 002 963.61 .9%
Preferred 007 125.269 .1%
$2.32 P-2 940,000 78%
Redeemable
Cumulative
Preferred
Conseco Finance CIHC, Common 005 1.5 1.5%
Corp. Incorporated 006 101.5 98.5%
Conseco Capital Conseco, Common 2 100 100%
Management, Inc. Inc.
Conseco Finance Conseco, 9% 1A 750 100%
Corp. Inc. Redeemable
Cumulative
Preferred
Annex I
Schedule 2
Pledged Obligations:
Approximate
Stated Principal Amount
Payor Payee Amount of Note Outstanding Date of Note
----- ----- -------------- ----------- ------------
CIHC, Incorporated Conseco, Inc. $400,000,000 $365,000,000 Nov. 27, 1996
(as successor to
Bankers Life Holding
Corporation)
CIHC, Incorporated Conseco, Inc. $79,798,865.71 $74,600,000 Jan. 1, 1998
(as successor to
American Life
Holding Company)
CIHC, Incorporated Conseco, Inc. $36,000,000 $36,000,000 May 26, 2000
(as successor to
American Life
Holding Company)
CIHC, Incorporated Conseco, Inc. $4,000,000,000 $1,961,200,000 May 26, 2000
Conseco Finance CIHC, $1,460,799,080 $1,460,799,080 Sept. 22, 2000
Corp. Incorporated
SECOND AMENDMENT TO COLLATERAL AGREEMENT
THIS SECOND AMENDMENT, dated as of November 22, 2000 (this
"Amendment"), to the Collateral Agreement, dated as of May 30, 2000 (the
"Collateral Agreement") among Conseco, Inc., an Indiana corporation ("Conseco"),
and CIHC, Incorporated, a Delaware corporation ("CIHC"; together with Conseco,
the "Grantors"), in favor of The Chase Manhattan Bank, as collateral agent (the
"Collateral Agent") for the Secured Parties (as defined in the Collateral
Agreement).
W I T N E S S E T H:
WHEREAS, pursuant to the Termination and Replacement
Agreement, dated as of May 30, 2000 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the individual
borrowers thereunder (the "Borrowers"), the banks and other financial
institutions (the "Lenders") from time to time party thereto, and The Chase
Manhattan Bank, as Administrative Agent (in such capacity, the "Administrative
Agent"), the Lenders extended the maturity date of term loans made to the
Borrowers under the Credit Agreement dated as of September 30, 1999 among the
Borrowers, the Lenders and the Administrative Agent;
WHEREAS, pursuant to the Senior Secured Revolving Credit
Agreement (the "May 2000 Credit Agreement"), dated as of May 30, 2000, among
Conseco, Inc. ("Conseco"), the banks and other financial institutions (the "May
2000 Lenders") from time to time party thereto, and The Chase Manhattan Bank, as
administrative agent (in such capacity, the "May 2000 Administrative Agent"),
the May 2000 Lenders agreed to make revolving credit loans to Conseco on the
terms and conditions set forth therein;
WHEREAS, pursuant to the Credit Agreement (the "November 2000
Credit Agreement"), dated as of November 22, 2000, among some or all of the
Borrowers, the banks and other financial institutions from time to time party
thereto (the "November 2000 Lenders") and The Chase Manhattan Bank, as
administrative agent (in such capacity, the "November 2000 Administrative
Agent"), the November 2000 Lenders have agreed to refinance the outstanding
loans to some or all of the Borrowers under the Credit Agreement;
WHEREAS, as a condition precedent to the obligation of the
November 0000 Xxxxxxx to enter into the November 2000 Credit Agreement, the
Grantors and the Collateral Agent have agreed to amend the Collateral Agreement
on the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises, the parties
hereto hereby agree as follows:
2
1. Definitions. Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Collateral
Agreement.
2. Amendments to Section 1.1. Section 1.1 of the Collateral
Agreement is hereby amended as follows:
2.1. The definition of "Default" is hereby deleted in its entirety,
and the following new definition is substituted in lieu thereof:
"'Default' either (i) a "Default" as defined in the May 2000 Credit
Agreement, (ii) any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied during such
time) constitute a "Termination Event" as defined in the Existing Conseco
Guaranty (as defined in the November 2000 Credit Agreement) or (iii) any event
or circumstance which, with the giving of notice, the lapse of time, or both,
would (if not cured or otherwise remedied during such time) constitute a
"Termination Event" as defined in the November Guaranty."
2.2. The definition of "D & O Grantor Obligations" is hereby
amended by inserting the following after the language "this Agreement" in the
third line thereof: ", the Existing CIHC Guaranty (as defined in the November
2000 Credit Agreement), the Existing Conseco Guaranty (as defined in the
November 2000 Credit Agreement)".
2.3. The definition of "Event of Default" is hereby deleted in its
entirety, and the following new definition is substituted in lieu thereof:
"'Event of Default' either (i) an "Event of Default" as defined in
the May 2000 Credit Agreement, (ii) a "Termination Event" as defined in the
Existing Conseco Guaranty (as defined in the November 2000 Credit Agreement) or
(iii) a "Termination Event" as defined in the November Guaranty."
2.4. The definition of "Grantor Obligations" is hereby deleted in
its entirety, and the following new definition is substituted in lieu thereof:
"'Grantor Obligations' collectively, (i) the D & O Grantor
Obligations, (ii) the May 2000 Grantor Obligations and (iii) the November 2000
Grantor Obligations."
2.5. The definition of "Holder Representative" is hereby deleted in
its entirety, and the following new definition is substituted in lieu thereof:
"'Holder Representative': (i) in respect of the D & O Grantor
Obligations, the Administrative Agent, (ii) in respect of the May 2000 Grantor
Obligations, the May 2000 Administrative Agent, (iii) in respect of the November
2000 Grantor Obligations, the November 2000 Administrative Agent, (iv) in
respect of the 1993 Indenture Obligations, the 1993 Indenture Trustee and (v) in
respect of the 1994 Indenture Obligations, the 1994 Indenture Trustee."
3
2.6. The definition of "May 2000 Grantor Obligations" is hereby
amended by inserting the following after the language "May 2000 Credit
Agreement" in the third line thereof: ", the Existing CIHC Guaranty (as defined
in the November 2000 Credit Agreement)".
2.7. The definition of "Secured Parties" is hereby deleted in its
entirety, and the following new definition is substituted in lieu thereof:
"'Secured Parties': the collective reference to (a) the Lenders,
(b) the May 2000 Lenders, (c) the November 2000 Lenders, (d) the Administrative
Agent, (e) the May 2000 Administrative Agent, (f) the November 2000
Administrative Agent and (g) the Collateral Agent."
3. Additions to Section 1.1. The following definitions are hereby
added to Section 1.1 in the appropriate alphabetical order:
"'November Guaranty' shall mean the Guaranty, dated as of November
22, 2000, between Conseco, Inc., as Guarantor, and The Chase Manhattan Bank, as
Administrative Agent as amended, supplemented or otherwise modified from time to
time.
'November 2000 Administrative Agent' as defined in the second
whereas clause in the Second Amendment, dated as of November 22, 2000, to this
Agreement.
'November 2000 Credit Agreement' as defined in the second whereas
clause in the Second Amendment, dated as of November 22, 2000, to this
Agreement.
'November 2000 Grantor Obligations': with respect to any Grantor,
all obligations and liabilities of such Grantor which may arise under or in
connection with the November Guaranty, this Agreement, the CIHC Guaranty (as
defined in the November 2000 Credit Agreement) or any other Loan Document (as
defined in the November 2000 Credit Agreement) to which such Grantor is a party,
in each case whether on account of guarantee obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Collateral Agent, the November 2000
Administrative Agent or the November 0000 Xxxxxxx that are required to be paid
by such Grantor pursuant to the terms of the November 2000 Credit Agreement or
any other Loan Document (as defined in the November 2000 Credit Agreement)).
'November 2000 Lenders' as defined in the second whereas clause in
the Second Amendment, dated as of November 22, 2000, to this Agreement."
4
4. Amendment to Section 5.1(a). Section 5.1(a) is hereby amended by
(i) inserting the following language after the language "(as defined in the May
2000 Credit Agreement)" in the seventh line thereof: "and the Loan Documents (as
defined in the November 2000 Credit Agreement)" and (ii) inserting the following
language before the period at the end thereof: "or the Loan Documents (as
defined in the November 2000 Credit Agreement)".
5. Amendment to Section 5.2. Section 5.2 is hereby amended by
deleting the following language from line three therein: "purchase loans
pursuant to Section 6.4(b) of the Guaranty or".
6. Amendment to Section 5.3. Section 5.3 is hereby amended by
deleting the following language on the third and fourth lines thereof "or in
connection with a mandatory purchase of Loans pursuant to Section 6.4(a) or
6.4(b) of the Guaranty".
7. Amendment to Section 5.6. Section 5.6 is hereby amended by
inserting the following language after the language "(as defined under the May
2000 Credit Agreement)" in the fourth line thereof: "and the Loan Documents (as
defined in the November 2000 Credit Agreement)".
8. Amendment to Section 6.4. Section 6.4 is hereby amended by
inserting the following language after the language "the May 2000 Credit
Agreement," in the seventh line thereof: "the November 2000 Credit Agreement,".
9. Amendments to Section 7.4.
9.1. Section 7.4(a) is hereby amended by (i) deleting the word
"and" after the language "any rights under this Agreement" in the third line
thereof and substituting in lieu thereof the following: "," and (ii) inserting
the following language after the language "Loan Documents" in the third line
thereof: ", the Loan Documents (as defined in the May 2000 Credit Agreement) and
the Loan Documents (as defined in the November 2000 Credit Agreement)".
9.2. Section 7.4(d) is hereby deleted in its entirety, and the
following new section is substituted in lieu thereof:
"(d) The agreements in this Section 7.4 shall survive repayment of
the Secured Obligations and all other amounts payable under (i) the Credit
Agreement and the other Loan Documents, (ii) the May 2000 Credit Agreement and
the Loan Documents (as defined therein) and (iii) the November 2000 Credit
Agreement and the Loan Documents (as defined therein)."
10. Amendment to Section 7.9. Section 7.9 is hereby amended by
adding the following language before the period at the end thereof: "and the
November 2000 Credit Agreement".
11. Amendments to Section 7.11.
11.1. Section 7.11(a) is hereby deleted in its entirety and the
following new section is substituted in lieu thereof:
5
"(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement, the other Loan Documents, the Loan Documents (as
defined in the May 2000 Credit Agreement) and the Loan Documents (as defined in
the November 2000 Credit Agreement) to which it is party;"
11.2. Section 7.11(b) is hereby amended by (i) deleting the word
"or" after the language "in connection with this Agreement" in the third line
thereof and substituting in lieu thereof the following: "," and (ii) inserting
the following after the language "Loan Documents" in the third line thereof: ",
the Loan Documents (as defined in the May 2000 Credit Agreement) or the Loan
Documents (as defined in the November 2000 Credit Agreement)".
11.3. Section 7.11(c) is hereby deleted in its entirety and the
following new section is substituted in lieu thereof:
"(c) no joint venture is created hereby, by the other Loan
Documents, the Loan Documents (as defined in the May 2000 Credit Agreement) or
the Loan Documents (as defined in the November 2000 Credit Agreement) or
otherwise exists by virtue of the transactions contemplated hereby or thereby
among the Secured Parties or among the Grantors and the Secured Parties."
12. Amendments to Section 7.12.
12.1. Section 7.12(a) is hereby amended by (A) inserting the
following new clause after the language "(2) the May 2000 Administrative Agent
on behalf of the May 2000 Lenders" in clause (ii)(B) thereof: "and (3) the
November 2000 Administrative Agent on behalf of the November 0000 Xxxxxxx,"; and
(B) inserting the following language after the language "and the May 2000
Administrative Agent" in the last sentence thereof: "and the November 2000
Administrative Agent".
12.2. Section 7.12(b) is hereby amended by inserting the following
language after the language "(as defined in the May 2000 Credit Agreement)"
therein: "and the Loan Documents (as defined in the November 2000 Credit
Agreement)".
12.3. Section 7.12(c) is hereby amended by inserting the following
language after the language "the May 2000 Administrative Agent" therein: "and
the November 2000 Administrative Agent".
12.4. Section 7.12(d) is hereby amended by inserting the following
language after the language "the May 2000 Administrative Agent" therein: "and
the November 2000 Administrative Agent".
6
13. Conditions to Effectiveness of this Amendment. This Amendment
shall become effective upon the (i) receipt by the Collateral Agent of duly
executed counterparts of this Amendment from the parties hereto, (ii)
effectiveness of the November 2000 Credit Agreement in accordance with the terms
thereof, and (iii) execution of UCC-3 filings to provide for the amendment to
the Collateral under the Collateral Agreement set forth herein.
14. Certain Representations and Warranties by the Grantors. In
order to induce the Collateral Agent to enter into this Amendment, the Grantors
represent and warrant that as of the date hereof and after giving effect to this
Amendment (a) the representations and warranties made by each of the Grantors in
the Collateral Agreement are true and correct in all material respects (except
to the extent that such representations and warranties are expressly stated to
relate to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date) and (b) no Default or Event of Default has occurred and is
continuing as of the date hereof; provided, that each reference to the Agreement
therein shall be deemed to be a reference to the Agreement after giving effect
to this Amendment.
15. Miscellaneous. The parties hereto hereby further agree as
follows:
15.1. Further Assurances. Each of the parties hereto hereby agrees
to do such further acts and things and to execute, deliver and acknowledge such
additional agreements, powers and instruments as the Collateral Agent may
reasonably request which are required to carry into effect the purposes of this
Amendment and the Collateral Agreement, as amended hereby.
15.2. Payment of Costs and Expenses. Conseco agrees to pay on
demand all expenses of the Collateral Agent (including the reasonable fees and
out-of-pocket expenses of counsel to the Collateral Agent) in connection with
the negotiation, preparation, execution and delivery of this Amendment.
15.3. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
15.4. Counterparts. This Amendment may be executed in one or more
counterparts (including by facsimile transmission), each of which, when executed
and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same document with the same
force and effect as if the signatures of all of the parties were on a single
counterpart, and it shall not be necessary in making proof of this Amendment to
produce more than one such counterpart.
15.5. Headings. Headings used in this Amendment are for convenience
of reference only and shall not affect the construction of this Amendment.
15.6. Effect of Amendment. The parties hereto acknowledge and agree
that the Liens and security interests as granted under the Collateral Agreement
are in all respects continuing and in full force and effect and secure the
Secured Obligations.
IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered as of the date first above written.
CONSECO, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Title: Senior Vice President and Acting
Chief Financial Officer
CIHC, INCORPORATED
By: /s/ Xxxxx X. Xxxx
--------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK, as Collateral
Agent
By: /s/
---------------------------------
Title:
Consented to:
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Bank
By: /s/
-------------------------
Title:
BANK OF AMERICA, N.A., as a Bank
By: /s/
-------------------------
Title:
CREDIT AGREEMENT
Dated as of November 22, 2000
among
THE PERSONS LISTED ON THE SIGNATURE PAGES HERETO,
as Borrowers,
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
and
THE CHASE MANHATTAN BANK
as Administrative Agent
(Relating to Refinancing of certain Loans under that certain
Credit Agreement, dated as of September 15, 1999, as terminated and
replaced by that certain Termination and Replacement Agreement, dated
as of May 30, 2000)
The following Table of Contents has been inserted for convenience only and does
not constitute a part of this Agreement.
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS...........................................................1
SECTION 1.1 Certain Defined Terms......................................................................1
SECTION 1.2 Other Definitional Provisions.............................................................14
SECTION 1.3 Accounting and Financial Determinations...................................................14
SECTION 2. THE COMMITMENTS AND THE LOANS.............................................................15
SECTION 2.1 Commitment................................................................................15
SECTION 2.2 Procedure for Borrowings..................................................................15
SECTION 2.3 Conversion and Continuation Elections.....................................................16
SECTION 2.4 Repayment of Loans........................................................................17
SECTION 2.5 Loan Accounts; Record Keeping.............................................................17
SECTION 3. INTEREST AND FEES.........................................................................17
SECTION 3.1 Interest Rates............................................................................17
SECTION 3.2 Default Interest Rate.....................................................................18
SECTION 3.3 Interest Payment Dates....................................................................18
SECTION 3.4 Setting and Notice of Rates...............................................................18
SECTION 3.5 Computation of Interest and Fees..........................................................18
SECTION 4. PAYMENTS AND PREPAYMENTS..................................................................18
SECTION 4.1 Prepayments...............................................................................18
SECTION 4.2 Payments by the Borrowers.................................................................19
SECTION 4.3 Sharing of Payments.......................................................................20
SECTION 4.4 Setoff....................................................................................20
SECTION 4.5 Net Payments..............................................................................20
SECTION 5. CHANGES IN CIRCUMSTANCES..................................................................22
SECTION 5.1 Increased Costs...........................................................................22
SECTION 5.2 Change in Rate of Return..................................................................23
SECTION 5.3 Basis for Determining Interest Rate Inadequate or Unfair..................................23
SECTION 5.4 Changes in Law Rendering Certain Loans Unlawful...........................................24
SECTION 5.5 Funding Losses............................................................................24
SECTION 5.6 Right of Banks to Fund Through Other Offices..............................................24
SECTION 5.7 Discretion of Banks as to Manner of Funding...............................................25
SECTION 5.8 Replacement of Banks......................................................................25
SECTION 5.9 Conclusiveness of Statements; Survival of Provisions......................................25
SECTION 5.10 Avoidance of Certain Costs................................................................26
SECTION 6. COLLATERAL AND OTHER SECURITY.............................................................26
i
SECTION 6.1 Collateral Documents......................................................................26
SECTION 6.2 Pledge of Additional Collateral...........................................................27
SECTION 6.3 Application of Proceeds from Collateral...................................................27
SECTION 6.4 Further Assurances........................................................................28
SECTION 7. REPRESENTATIONS AND WARRANTIES OF BORROWERS...............................................28
SECTION 7.1 No Conflict...............................................................................28
SECTION 7.2 Validity..................................................................................29
SECTION 7.3 Litigation and Contingent Obligations.....................................................29
SECTION 7.4 Liens.....................................................................................29
SECTION 7.5 Taxes.....................................................................................29
SECTION 7.6 Accuracy of Information...................................................................29
SECTION 7.7 Proceeds..................................................................................29
SECTION 7.8 Securities Laws...........................................................................29
SECTION 7.9 No Default................................................................................30
SECTION 7.10 Organization, etc.........................................................................30
SECTION 7.11 Authorization.............................................................................30
SECTION 7.12 Margin Regulations........................................................................30
SECTION 7.13 Principal Residence.......................................................................31
SECTION 7.14 No Default or Event of Default............................................................31
SECTION 8. COVENANTS OF BORROWERS....................................................................31
SECTION 8.1 Reports, Certificates and Other Information...............................................31
8.1.1 Borrower Financials.......................................................................31
8.1.2 Tax Returns and Reports...................................................................31
8.1.3 Notice of Default and Litigation..........................................................31
8.1.4 Collateral Ratio..........................................................................31
8.1.5 Other Information.........................................................................32
SECTION 8.2 Taxes and Liabilities.....................................................................32
SECTION 8.3 Compliance with Laws......................................................................32
SECTION 8.4 Other Agreements..........................................................................32
SECTION 9. CONDITIONS AND EFFECTIVENESS OF THIS AGREEMENT............................................32
SECTION 9.1 Receipt of Documents......................................................................32
SECTION 9.2 Additional Conditions.....................................................................34
SECTION 10. EVENTS OF DEFAULT AND THEIR EFFECT........................................................35
SECTION 10.1 Events of Default.........................................................................35
10.1.1 NonPayment of Loans, etc..................................................................35
10.1.2 Bankruptcy, Insolvency, etc...............................................................35
10.1.3 Defaults Under this Agreement.............................................................36
10.1.4 Representations and Warranties............................................................36
10.1.5 Collateral Ratio..........................................................................36
10.1.6 Defaults under the Conseco Guaranty.......................................................36
10.1.7 Defaults Under Any of the Other D&O Agreements............................................36
SECTION 10.2 Effect of Event of Default................................................................36
ii
Page
SECTION 11. THE AGENT.................................................................................37
SECTION 11.1 Authorization and Action..................................................................37
SECTION 11.2 Liability of the Administrative Agent.....................................................37
SECTION 11.3 Administrative Agent and Affiliates.......................................................38
SECTION 11.4 Bank Credit Decision......................................................................38
SECTION 11.5 Indemnification...........................................................................38
SECTION 11.6 Successor Agent...........................................................................38
SECTION 12. ASSIGNMENTS AND PARTICIPATIONS............................................................39
SECTION 12.1 Assignments...............................................................................39
SECTION 12.2 Participations............................................................................40
SECTION 12.3 Disclosure of Information.................................................................41
SECTION 12.4 Foreign Transferees.......................................................................41
SECTION 13. MISCELLANEOUS.............................................................................42
SECTION 13.1 Waivers and Amendments....................................................................42
SECTION 13.2 Failure to Consent........................................................................43
SECTION 13.3 Notices...................................................................................43
SECTION 13.4 Indemnity.................................................................................44
SECTION 13.5 D&O Agreements............................................................................44
SECTION 13.6 Subsidiary References.....................................................................44
SECTION 13.7 Captions..................................................................................44
SECTION 13.8 GOVERNING LAW.............................................................................44
SECTION 13.9 Counterparts..............................................................................45
SECTION 13.10 SUBMISSION TO JURISDICTION; WAIVER OF VENUE...............................................45
SECTION 13.11 Successors and Assigns....................................................................45
SECTION 13.12 Power of Attorney.........................................................................46
SECTION 13.13 No Waiver; Cumulative Remedies............................................................46
SECTION 13.14 WAIVER OF JURY TRIAL......................................................................46
SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1.1 Existing Litigation
SCHEDULE 2.1 Banks and Percentages
SCHEDULE 2.2 Borrower Loan Percentage
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Notice of Borrowing
EXHIBIT C Form of Notice of Conversion/Continuation
EXHIBIT D Form of Pledge Agreement
EXHIBIT E Form of Conseco Guaranty
EXHIBIT F - 1 Form of Opinion of Xxxxx X. Xxxxxx, counsel to Conseco
iii
EXHIBIT F - 2 Form of Opinion of Weil, Gotshal & Xxxxxx LLP, outside counsel to
Conseco
EXHIBIT G Form of Confidentiality Letter
EXHIBIT H Form of Assignment Agreement
EXHIBIT I Funding Loss Formula
EXHIBIT J Form of CIHC Guaranty
EXHIBIT K Form of Pledge Agreement (Additional Collateral)
EXHIBIT L Second Amendment to Collateral Agreement
EXHIBIT M Form of Subordinated Pledge Agreement Re 1997 Shares
EXHIBIT N Form of Borrower Acknowledgment and Release
EXHIBIT O Form of Conseco Officer's Certificate
EXHIBIT P Form of Subordinated Pledge Agreement Re 1998 Shares
EXHIBIT Q First Amendment to Collateral Sharing Agreement
iv
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of November 22, 2000,
among the persons listed as borrowers on the signature pages hereto (herein,
collectively called the "Borrowers" and each individually, a "Borrower"), the
several financial institutions from time to time party to this Agreement
(herein, together with any Eligible Assignees thereof, collectively called the
"Banks" and each individually, a "Bank"), and THE CHASE MANHATTAN BANK
("Chase"), as administrative agent for the Banks (herein in such capacity,
together with any successors thereto in such capacity, called the
"Administrative Agent").
Background
WHEREAS, the Borrowers, certain other borrowers, the Banks and
the Administrative Agent are parties to that certain Credit Agreement, dated as
of September 15, 1999, as terminated and replaced by that certain Termination
and Replacement Agreement, dated as of May 30, 2000 (as amended or modified
through the date hereof, the "Existing Credit Agreement"), whereby the Banks
party thereto continued term loans to the borrowers party thereto (including the
Borrowers), on the terms and subject to the conditions set forth in the Existing
Credit Agreement;
WHEREAS, the Borrowers have requested that the Banks agree to
make term loans in the principal amount for each Borrower set forth on Schedule
2.2 hereto to refinance the outstanding loans to the Borrowers under the
Existing Credit Agreement; and
WHEREAS, the Banks are willing, on the terms and conditions
hereinafter set forth, to make the term loans to the Borrowers;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1.DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms . As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"AC Collateral Agent" shall mean BofA (and its successors) as
collateral agent under the AC Pledge Agreement.
"AC Pledge Agreement" shall mean the Pledge Agreement
(Additional Collateral), substantially in the form of Exhibit K, as the
same may be amended, modified, or supplemented from time to time.
"AC Pledge Borrowers" shall mean the Borrowers, if any, who
have elected to pledge Additional Collateral pursuant to the terms of
the Plan.
2
"Additional Collateral" shall mean, for any Borrower,
marketable securities pledged by such Borrower to secure the repayment
of such Borrower's obligations under the New Credit Agreements Re D&O
Loans as required by Conseco pursuant to the Plan.
"Administrative Agent" - see Preamble.
"Administrative Agent's Office" shall mean 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or such other address designated by the
Administrative Agent (or any successor agent) to the Borrowers and the
Banks from time to time.
"Affected Bank" - see Section 5.4.
"Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, owns, holds, controls, is controlled by
or is under common control with such Person (including all beneficial
control as a trustee, guardian or other fiduciary). A Person shall be
deemed to be "controlled by" any other Person if such other Person
possesses, directly or indirectly, power (a) to vote 10% or more of the
securities (on a fully diluted basis) having ordinary voting power for
the election of directors, managing general partners or managers; or
(b) to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities,
membership interests, by contract or otherwise.
"Agent Related Persons" shall mean Chase in any agent capacity
or any successor agent arising under Section 11.6, together with its
respective Affiliates (including, in the case of Chase, the Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.
"Agreement" shall mean this Credit Agreement, as amended,
modified or supplemented from time to time.
"Appendix" means the Appendix attached to the Revolving Credit
Agreement which is hereby incorporated by reference.
"Arranger" shall mean Chase Securities Inc., solely in its
capacity as arranger.
"Assignment Agreement" - see Section 12.1(a).
"Bank" or "Banks" - see Preamble.
"Base Rate" for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Rate for such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by Chase as its
prime rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged
by Chase in connection with extensions of credit to debtors); "Base CD
Rate" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which
3
is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board of Governors of the Federal Reserve System
(the "Board") through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate
shall not be so reported on such day or such next preceding Business
Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by it; and "Federal Funds Rate" shall mean, for any day, the
rate at which U.S. Dollar deposits with an overnight maturity are
offered by Chase in the Federal funds market at 11:00 a.m., New York
City time, on such day. Any change in the Base Rate due to a change in
the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate, the Three-Month Secondary CD Rate
or the Federal Funds Rate, respectively.
"Base Rate Loan" shall mean a Loan bearing interest at the Base
Rate.
"BofA" shall mean Bank of America, N.A.
"Borrower" or "Borrowers" - see Preamble.
"Borrower Acknowledgment and Release" shall mean an Acknowledgment
and Release executed and delivered by each Borrower in favor of the
Administrative Agent and the Banks, substantially in the form of
Exhibit N.
"Borrower Collateral Percentage" shall mean, as to any Borrower, a
fraction, the numerator of which is equal to the principal amount of
the Loans to such Borrower then outstanding hereunder and the
denominator of which is equal to the aggregate principal amount of the
Loans to all Borrowers then outstanding hereunder.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago, New York City or San
Francisco are authorized or required by law to close and, if the
applicable Business Day relates to any Offshore Rate Loan, means such a
day on which dealings are carried on in the applicable offshore dollar
interbank market.
"Capitalized Lease Liabilities" shall mean, with respect to any
Person, all monetary obligations of such Person under any leasing or
similar arrangement which, in accordance with GAAP, would be classified
as a capitalized lease, and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the
date of
4
the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee
without payment of a penalty.
"C/D Assessment Rate" for any day as applied to any Base Rate
Loan, the annual assessment rate in effect on such day which is payable
by a member of the Bank Insurance Fund maintained by the Federal
Deposit Insurance Corporation (the "FDIC") classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12
C.F.R. ss. 327.4 (or any successor provision) to the FDIC (or any
successor) for the FDIC's (or such successor's) insuring time deposits
at offices of such institution in the United States.
"C/D Reserve Percentage" for any day as applied to any Base
Rate Loan, that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal time deposits
in Dollars having a maturity of 30 days or more.
"Charges" - see Section 4.5.
"Chase" - see Preamble.
"CIHC" shall mean CIHC, Incorporated, a Delaware corporation,
and a direct wholly owned Subsidiary of Conseco.
"CIHC Guaranty" shall mean the Guaranty and Subordination
Agreement, dated as of the date hereof, executed and delivered by CIHC
and Conseco in favor of the Administrative Agent, for the benefit of
the Banks, in substantially the form of Exhibit J, as the same may be
amended, modified, or supplemented from time to time.
"Closing Date" shall mean the date on which all conditions
precedent set forth in Section 9 are satisfied or waived by all Banks
or, with respect to any payment to be made hereunder, waived by the
Person entitled to receive such payment.
"Collateral Agent" see the preamble to the Collateral
Agreement.
"Collateral Agreement" shall mean the Collateral Agreement,
dated as of May 30, 2000, made by Conseco and CIHC in favor of the
Collateral Agent, as amended, supplemented or otherwise modified from
time to time.
"Collateral Ratio" shall mean, as to any Borrower, the ratio
of (a) the sum of the Loan Value of Direct Collateral of such Borrower
plus the Borrower Collateral Percentage of the Loan Value of Indirect
Collateral to (b) the aggregate principal amount of the Loans of such
Borrower then outstanding.
"Collateral Sharing Agreement" shall mean the Collateral
Sharing Agreement, dated as of May 30, 2000, among Conseco, CIHC and
the Collateral Agent, as amended, supplemented or otherwise modified
from time to time.
5
"Conseco" shall mean Conseco, Inc., an Indiana corporation.
"Conseco Guaranty" shall mean the Guaranty of Conseco, dated
as of the date hereof, executed and delivered in favor of the
Administrative Agent, for the benefit of the Banks, in substantially
the form of Exhibit E, as the same may be amended, modified or
supplemented from time to time.
"Contingent Obligation" shall mean, without duplication, any
agreement, undertaking or arrangement by which any Person guarantees,
endorses or otherwise becomes or is contingently liable upon (by direct
or indirect agreement, contingent or otherwise, to provide funds for
payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the debt, obligation or
other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of
dividends or other distributions upon the shares of any other Person.
The amount of any Person's liability with respect to any Contingent
Obligation shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount (or maximum outstanding
principal amount, if larger) of the debt, obligation or other liability
outstanding thereunder or, if not stated or if indeterminable, the
maximum reasonably anticipated liability in respect thereof at the time
of determination.
"Conversion/Continuation Date" shall mean any date on which,
under Section 2.3, Conseco (on behalf of the Borrowers) (a) converts
Loans of one Type to another Type, or (b) continues as Loans of the
same Type, but with a new Interest Period, Loans having Interest
Periods expiring on such date.
"D&O Agreements" shall mean the Existing Credit Agreement, the
1997 D&O Credit Agreement, the September 22, 2000 Agreements, the 1998
D&O Credit Agreement, the New Credit Agreements Re D&O Loans, all other
agreements or documents (including, without limitation, guaranties such
as (without limitation) the Existing Conseco Guaranty, the Existing
CIHC Guaranty, the Conseco Guaranty and the CIHC Guaranty) relating to
any of the foregoing, and any reaffirmed, amended, modified or
supplemented version of any of the foregoing.
"Default"shall mean any condition or event which constitutes
an Event of Default or which with the giving of notice or lapse of time
or both would, unless cured or waived, become an Event of Default.
"Direct Collateral" shall mean, with respect to any Borrower,
all property, assets and/or rights on or in which a Lien is now or
hereafter granted by such Borrower to the Administrative Agent (or to
any agent, trustee or other party acting on behalf of the
Administrative Agent) for the benefit of the Banks, pursuant to the
Pledge Agreement, the AC Pledge Agreement, the Subordinated Pledge
Agreement Re 1997 Shares, the Subordinated Pledge Agreement Re 1998
Shares, and any other instruments or documents provided for herein or
therein or delivered hereunder or thereunder or in connection herewith
or therewith.
6
"Dollars"and the sign "$" shall mean lawful money of the
United States of America.
"Eligible Assignee" shall mean any bank, pension fund, mutual
fund, investment fund or other financial institution (other than an
insurance company or any Affiliate of an insurance company except those
to which the Borrowers consent).
"Eurodollar Reserve Percentage" has the meaning specified in
the definition of "Offshore Rate."
"Event of Default" - see Section 10.1.
"Existing CIHC Guaranty" shall mean the Guaranty and
Subordination Agreement entered into by CIHC and Conseco dated
September 22, 2000 in respect of the Existing Credit Agreement.
"Existing Conseco Guaranty" shall mean the Amended and
Restated Guaranty dated September 22, 2000 of Conseco with respect to
the Existing Credit Agreement.
"Existing Credit Agreement" - see first recital.
"Existing Litigation" shall mean the litigation described in
Schedule 1.1 hereto.
"Existing Loans" shall mean loans extended to a Borrower by
the Banks under the Existing Credit Agreement.
"FRB" shall mean the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"First Amendment to the Collateral Sharing Agreement" shall
mean the First Amendment to the Collateral Sharing Agreement, dated as
of the date hereof, executed and delivered in favor of the
Administrative Agent, for the benefit of the Banks, in substantially
the form of Exhibit Q, as the same may be amended, modified or
supplemented from time to time.
"Funding Loss Formula" has the meaning set forth on Exhibit I.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances
as of the date of determination.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, and any entity
exercising executive, legislative, judicial, regulatory or
7
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Hedging Obligations" shall mean obligations in respect of any
agreement (including any master agreement and any agreement, whether or
not in writing, relating to any single transaction) that is an interest
rate swap agreement, basis swap, forward rate agreement, commodity
swap, commodity option, equity or equity index swap or option, bond
option, interest rate option, forward foreign exchange agreement, rate
cap, collar or floor agreement, currency swap agreement, cross-currency
rate swap agreement, swaption, currency option or any other, similar
agreement (including any option to enter into any of the foregoing).
"IBOR" has the meaning set forth in the definition of Offshore
Rate.
"Indebtedness" shall mean, with respect to any Person at any
date, without duplication: (a) all obligations of such Person for
borrowed money or in respect of loans or advances; (b) all obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments; (c) all obligations in respect of letters of credit,
whether or not drawn, and bankers' acceptances issued for the account
or upon the application or request of such Person; (d) all Capitalized
Lease Liabilities of such Person; (e) all Hedging Obligations of such
Person; (f) all obligations of such Person to pay the deferred purchase
price of property or services which are included as liabilities in
accordance with GAAP (other than trade payables entered into in the
ordinary course of business on ordinary terms), and all obligations
secured by a Lien on property owned or being purchased by such Person
(including Indebtedness arising under conditional sales or other title
retention agreements); (g) any obligations described in clauses (a)
through (f) above or clause (h) immediately following this clause (g)
of a partnership in which such Person is a general partner; and (h) all
Contingent Obligations of such Person in connection with the foregoing.
"Indemnified Parties" - see Section 13.4.
"IndirectCollateral" shall mean any assets of Conseco or CIHC
which, as determined by the Administrative Agent in its sole discretion
exercised in good faith, shall be deemed to "indirectly secure" the
Liabilities pursuant to Regulation U as a result of the negative pledge
agreement and/or other covenants of Conseco and CIHC set forth in the
Conseco Guaranty.
"InterestPayment Date" shall mean, as to any Offshore Rate
Loan, the last day of each Interest Period applicable to such Loan and,
as to any Base Rate Loan, the last Business Day of each calendar
quarter and each date such Loan is converted into another Type of Loan,
provided, however, that if any Interest Period for an Offshore Rate
Loan exceeds three months, the date that falls three months (as the
case may be) after the beginning of such Interest Period and after each
Interest Payment Date thereafter is also an Interest Payment Date.
8
"InterestPeriod" shall mean, as to any Offshore Rate Loan, the
period commencing on the date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by Conseco (on behalf of the
Borrowers) in its Notice of Borrowing or Notice of
Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a day
that is not a Business Day, that Interest Period shall be extended to
the following Business Day unless, in the case of an Offshore Rate
Loan, the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate
Loan that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
(c) no Interest Period for any Loan shall extend beyond
the Termination Date.
"Lending Office" shall mean, with respect to any Bank, any
office designated by such Bank in its sole discretion beneath its
signature hereto (or in an Assignment Agreement) or otherwise from time
to time by written notice to the Borrowers and the Administrative
Agent, as a Lending Office for purposes hereunder. A Bank may designate
separate Lending Offices for the purposes of making and maintaining
Loans.
"Liabilities" shall mean, as to any Borrower, all obligations
of such Borrower to the Banks or the Administrative Agent, howsoever
created, arising or evidenced, whether direct or indirect, joint or
several, absolute or contingent, or now or hereafter existing, or due
or to become due, which arise out of or in connection with this
Agreement, the Notes, if any, or the other Loan Documents.
"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other) or other priority or preferential arrangement of
any kind or nature whatsoever.
"Litigation" shall mean any litigation (including, without
limitation, any governmental proceeding or arbitration proceeding), tax
audit or investigative proceeding, claim, lawsuit, and/or investigation
pending or threatened against or involving any Borrower, or Conseco or
any of its Subsidiaries or any of its or their businesses or
operations.
"Loan(s)"shall have the meaning set forth in Section 2.1 and
may be a Base Rate Loan or an Offshore Rate Loan (each, a "Type of
Loan").
9
"Loan Documents" shall mean, collectively, this Agreement, the
Notes, if any, the Conseco Guaranty, the Pledge Agreement, the
Collateral Agreement, the Collateral Sharing Agreement, the
Subordinated Pledge Agreement Re 1997 Shares, the Subordinated Pledge
Agreement Re 1998 Shares, the AC Pledge Agreement, the Borrower
Acknowledgment and Release, the CIHC Guaranty and any and all other
documents or instruments furnished or required to be furnished in
connection with any of the foregoing, as the same may be amended or
modified in accordance with this Agreement.
"Loan Value of Direct Collateral" shall mean, with respect to
any Borrower, (a) the current market value of the common stock of
Conseco pledged by such Borrower to the Administrative Agent, for the
benefit of the Banks, under the Pledge Agreement, plus (b) without
duplication, the current market value of any other Direct Collateral
constituting Margin Stock pledged by such Borrower to the
Administrative Agent, for the benefit of the Banks, under any Loan
Document, plus (c) without duplication, the maximum loan value of all
Direct Collateral of such Borrower not constituting Margin Stock, it
being understood that the maximum loan value of Direct Collateral shall
be its good faith loan value (i.e., the value of such Direct Collateral
as determined from time to time by the Administrative Agent (with the
concurrence of the Required Lenders) exercising sound banking judgment)
without regard to such Borrower's assets securing any unrelated
transactions. The Administrative Agent and/or the Required Lenders
shall have the right at any time in their sole discretion to recompute
the Loan Value of Direct Collateral.
"Loan Value of Indirect Collateral" shall mean, with respect
to any Borrower, the sum of the maximum loan value of Indirect
Collateral under Regulation U, after taking into account any other
Indebtedness of Conseco directly or "indirectly secured" (as set forth
in Regulation U and the interpretations thereof) by the assets of
Conseco and CIHC, it being understood that (a) the maximum loan value
of Indirect Collateral constituting Margin Stock shall be 50% of its
current market value and (b) the maximum loan value of Indirect
Collateral not constituting Margin Stock shall be its good faith loan
value (i.e., the value of such Indirect Collateral as determined from
time to time by the Administrative Agent (with the concurrence of the
Required Lenders) exercising sound banking judgment), in each case
without regard to Conseco's assets securing any unrelated transactions.
Until further notice from the Administrative Agent to the Borrower, the
Loan Value of Indirect Collateral shall be deemed to be $478,600,000,
it being understood that the Administrative Agent and/or the Required
Lenders shall have the right at any time in their sole discretion to
recompute the Loan Value of Indirect Collateral.
"Margin Stock" shall mean "margin stock" as such term is
defined in Regulation U.
"Material Adverse Change" or "Material Adverse Effect" shall
mean any change, event, action, condition or effect which individually
or in the aggregate (a) impairs the validity or enforceability of this
Agreement or any other Loan Document, or (b) materially and adversely
affects the consolidated business, operations, financial prospects
10
or condition of Conseco and its Subsidiaries taken as a whole, or (c)
materially and adversely impairs the ability of any Borrower or Conseco
to perform his, hers or its obligations under this Agreement or any of
the other Loan Documents to which he, she or it is a party, or (d)
materially and adversely affects the perfection or priority of any Lien
granted under any of the Loan Documents.
"Material Litigation" or "Material Litigation Development"
shall mean any Litigation, or development in any Litigation, as the
case may be, which (a) seeks to enjoin, prohibit, discontinue or
otherwise impacts the validity or enforceability of this Agreement or
any of the other Loan Documents or other transactions contemplated
hereby or thereby, or (b) could be reasonably expected to have a
Material Adverse Effect.
"New Credit Agreements Re D&O Loans" shall mean, collectively,
this Agreement, the New Credit Agreement Re 1997 D&O Loans, and the New
Credit Agreement Re 1998 D&O Loans.
"New Credit Agreement Re 1997 D&O Loans" shall mean that
certain credit agreement dated as of the date hereof with certain
borrowers, certain banks, and BofA, as administrative agent,
refinancing certain of the loans under the 1997 D&O Credit Agreement,
as the same may be amended, modified or supplemented from time to time.
"New Credit Agreement Re 1998 D&O Loans" shall mean that
certain credit agreement dated as of the date hereof with certain
borrowers, certain banks, and BofA, as administrative agent,
refinancing certain of the loans under the 1998 D&O Credit Agreement,
as the same may be amended, modified or supplemented from time to time.
"1997 D&O Credit Agreement" shall mean the Amended and
Restated Credit Agreement, dated as of August 26, 1997, among certain
borrowers, certain banks, and BofA, as administrative agent.
"1998 D&O Credit Agreement" shall mean the Credit Agreement,
dated as of August 21, 1998, among certain borrowers, certain banks,
and BofA, as administrative agent.
"Non-Consenting Bank" - see Section 13.2.
"Note" shall mean a promissory note, substantially in the form
of Exhibit A with blanks appropriately completed in conformity
herewith, evidencing the aggregate Loans of the Banks, or any
promissory note or promissory notes issued in substitution or
replacement therefor.
"Notice of Borrowing" shall mean a notice in substantially the
form of Exhibit B.
"Notice of Conversion/Continuation" shall mean a notice in
substantially the form of Exhibit C.
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"Offshore Rate" shall mean, for any Interest Period, with
respect to Offshore Rate Loans comprising part of the same Borrowing,
the rate of interest per annum (rounded upward to the next 1/100th of
1%) determined by the Administrative Agent as follows:
Offshore Rate = _______________IBOR_______________
1.00 Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect
on such day (whether or not applicable to any Bank) under
regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"IBOR" shall mean the rate of interest per annum
(computed for the actual number of days elapsed on the basis
of a 360-day year) appearing on Page 3750 of the Telerate
Service (or any successor or substitute page of such Service,
or any successor to or substitute to such Service, providing
rate quotations comparable to those currently provided on such
page of such Service, as determined by the Administrative
Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 A.M. (London time)
two (2) Business Days prior to the commencement of such
Interest Period, provided that, for Interest Periods shorter
than one month, IBOR shall be derived from such source as the
Administrative Agent shall reasonably determine.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"OffshoreRate Loan" shall mean a Loan that bears interest
based on the Offshore Rate.
"Other D&O Agreements" shall mean any D&O Agreement other than
this Agreement.
"Percentage" shall mean, relative to any Bank, the percentage
set forth opposite such Bank's name on Schedule 2.1 (or set forth in an
Assignment Agreement), as such Percentage may be adjusted from time to
time pursuant to Assignment Agreement(s) executed by such Bank and its
Eligible Assignee and delivered pursuant to Section 12.1.
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"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" shall mean a plan made available to certain Borrowers
by Conseco substantially in the form to be attached as an appendix to
the certificate to be delivered pursuant to Section 9.1.15 hereof, as
amended, modified or supplemented from time to time, but only to the
extent permitted pursuant to the provisions of the pertinent D & O
Agreements.
"Plan Rights" shall mean any Borrower's rights and interests
in and to payments of "Bonus Points" (or any amended or successor
payment concept) under the Plan, but expressly excluding any amounts
dedicated under the Plan to the payment of any related tax obligations
owing or to be owing by such Borrower.
"Pledge Agreement" shall mean the Borrower Pledge Agreement,
dated as of the date hereof, substantially in the form of Exhibit D, as
the same may be amended, modified or supplemented from time to time.
"Pledged Shares" shall have the meaning as assigned to such
term in the Pledge Agreement.
"Reaffirmation of Existing CIHC Guaranty" shall mean a writing
reaffirming the Existing CIHC Guaranty in form and substance
satisfactory to the Administrative Agent, dated as of the date hereof,
as the same may be amended, modified, or supplemented from time to
time. "Reaffirmation of Existing Conseco Guaranty" shall mean a writing
reaffirming the Existing Conseco Guaranty in form and substance
satisfactory to the Administrative Agent, dated as of the date hereof,
as the same may be amended, modified, or supplemented from time to
time.
"Regulation "D" and "U" shall mean Regulation D and Regulation
U, respectively, or any successor regulation thereto, promulgated by
the FRB as from time to time in effect.
"Replaced Bank" - see Section 5.8.
"Replacement Bank" - see Section 5.8.
"Required Banks" shall mean Banks having more than 50% of the
aggregate principal amount of the Loans outstanding at such time.
"Responsible Officer" shall mean, in the case of any Person,
any of the following officers of such Person: the chief executive
officer; the president; the chief financial officer; the chief
operating officer; the chief investment officer; the general counsel;
the secretary; the treasurer or any senior or executive vice president;
or, in the case of each such officer, the individual designated by such
officer to act on its behalf hereunder. If
13
any of the titles of the preceding officers of such corporate Person
are changed after the date hereof, the term "Responsible Officer" shall
thereafter mean any officer performing substantially the same functions
as are presently performed by one or more of the officers listed in the
first sentence of this definition.
"Revolving Credit Agreement" shall mean that certain Five-Year
Credit Agreement, dated as of September 25, 1998, among Conseco,
certain financial institutions, BofA, as agent, First Union National
Bank and The Chase Manhattan Bank, as syndication agents, and Xxxxxx
Guaranty Trust Company of New York, as documentation agent, as amended
by the First Amendment to Five-Year Credit Agreement, dated as of
September 22, 2000, as the same may be hereafter amended, modified, or
supplemented from time to time.
"Second Amendment to the Collateral Agreement" shall mean the
Second Amendment to the Collateral Agreement, dated as of the date
hereof, executed and delivered in favor of the Administrative Agent,
for the benefit of the Banks, in substantially the form of Exhibit L,
as the same may be amended, modified or supplemented from time to time.
"September 22, 2000 Agreements" shall mean, collectively, that
certain Agreement, dated as of September 22, 2000, among Conseco,
certain banks, and BofA as administrative agent, relating to the 1997
D&O Credit Agreement, that certain Agreement, dated as of September 22,
2000, among Conseco, certain banks, and BofA as administrative agent,
relating to the 1998 D&O Credit Agreement, and that certain Agreement,
dated as of September 22, 2000, among Conseco, certain banks, and Chase
as administrative agent, relating to the Existing Credit Agreement, as
any of the foregoing may be amended, modified or supplemented from time
to time.
"Significant Subsidiary" shall have the meaning provided in
the Revolving Credit Agreement as in effect on the Closing Date.
"Subordinated Pledge Agreement Re 1997 Shares" shall mean a
Subordinated Pledge Agreement Re 1997 Shares substantially in the form
attached as Exhibit M hereto, as the same may be amended, modified or
supplemented from time to time.
"Subordinated Pledge Agreement Re 1998 Shares" shall mean a
Subordinated Pledge Agreement Re 1998 Shares substantially in the form
attached as Exhibit P hereto, as the same may be amended, modified or
supplemented from time to time.
"Subsidiary" shall have the meaning provided in the Revolving
Credit Agreement as in effect on the Closing Date.
"Substitute Bank" - see Section 13.2.
"Taxes" or "Tax" shall mean all taxes of any nature whatsoever
and howsoever denominated, including, without limitation, retaliatory,
income, premium, withholding, guaranty fund or similar assessments,
excise, import, governmental fees, duties and all
14
other charges, as well as additions to tax, penalties and interest
thereon, imposed by any Governmental Authority.
"Termination Date" shall mean December 31, 2003.
"Termination Event" shall have the meaning as assigned to such
term in the pertinent September 22, 2000 Agreement.
"Transferee" - see Section 12.3.
"Type" or "Type of Loan" has the meaning specified in the
definition of "Loan."
"UCC" shall mean the Uniform Commercial Code or comparable
statute or any successor statutes thereto, as in effect from time to
time in the relevant jurisdiction.
"United States" and "U.S." each means the United States of
America.
SECTION 1.2 Other Definitional Provisions . (a) All terms
defined in this Agreement shall have the above defined meanings when used in any
Loan Document, or any certificate, report or other document made or delivered
pursuant to this Agreement, unless the context therein shall clearly otherwise
require.
(b) The words "hereof," "herein," "hereunder" and similar
terms when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and subsection, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(c) The words "amended or modified" when used in any Loan
Document shall mean with respect to such Loan Document as from time to time, in
whole or in part, amended, modified, supplemented, restated, refinanced,
refunded or renewed.
(d) In the computation of periods of time in this Agreement
from a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
(e) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Administrative
Agent, the Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Administrative
Agent merely because of the Administrative Agent's or Banks' involvement in
their preparation.
SECTION 1.3 Accounting and Financial Determinations . For
purposes of this Agreement, unless otherwise specified or the context otherwise
requires, all accounting terms used in any Loan Document shall be interpreted,
all accounting determinations and computations hereunder or thereunder shall be
made, and all financial statements required to be delivered hereunder or
thereunder shall be prepared, in accordance with GAAP.
15
SECTION 2.THE COMMITMENTS AND THE LOANS
Subject to the terms and conditions of this Agreement and
relying on the representations and warranties herein set forth:
SECTION 2.1 Commitment . Each of the Banks, severally and for
itself alone, agrees, on the terms and conditions set forth herein, to make term
loans (herein collectively called the "Loans" and individually called a "Loan")
to each of the Borrowers in its Percentage of the amounts set forth on Schedule
2.2 on the Closing Date for the sole purpose of refinancing the Existing Loans.
The Loans to any Borrower shall be disbursed in accordance with Section 2.2 and
once repaid may not thereafter be reborrowed.
SECTION 2.2 Procedure for Borrowings . (a) The Loans shall be
deemed to have been made to each Borrower upon irrevocable written notice (or by
telephone promptly confirmed in writing) of Conseco (on behalf of the Borrowers)
delivered to the Administrative Agent in the form of a Notice of Borrowing
(which notice must be received by the Administrative Agent prior to 12:00 Noon
(New York City time) (i) three Business Days prior to the Closing Date, in the
case of Offshore Rate Loans and (ii) on the Closing Date, in the case of Base
Rate Loans, specifying:
(i) the Closing Date, which shall be a Business Day and the
same Business Day for each Borrower;
(ii) the amount of the Loans deemed to have been made to each
Borrower, which shall not exceed the aggregate amount set forth on
Schedule 2.2 for such Borrower;
(iii) the Type of Loans being requested; and
(iv) with respect to the Loans, if comprised of Offshore Rate
Loans, the duration of the Interest Period applicable to such Offshore
Rate Loan included in such notice. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Loans comprised of
Offshore Rate Loans, such Interest Period shall be three (3) months.
(b) The Administrative Agent will promptly notify each Bank of
its receipt of the Notice of Borrowing and of the amount of such Bank's
Percentage of the related Loans.
(c) Each Bank will make the amount of its Percentage of the
Loans available to the Administrative Agent for the account of each Borrower
requesting a Loan at the Administrative Agent's Office by 2:00 P.M. (New York
City time) on the Closing Date in funds immediately available to the
Administrative Agent. The proceeds of each such Loan will be applied to repay in
full each Borrower's Existing Loans, notwithstanding receipt by the
Administrative Agent of any other directions to the contrary, and such repayment
is intended to, and shall, occur simultaneously with the making of the Loans.
(d) There may not be more than five (5) Interest Periods in
effect for all Loans then outstanding.
16
SECTION 2.3 Conversion and Continuation Elections . (a)
Conseco (on behalf of the Borrowers) may, upon irrevocable written notice to the
Agent in accordance with Section 2.3(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the
case of Offshore Rate Loans, to convert any such Loans into Loans of
any other Type; or
(ii) elect as of the last day of the applicable Interest
Period, to continue any Offshore Rate Loans having Interest Periods
expiring on such day;
provided, that if at any time the aggregate amount of Offshore Rate Loans to all
Borrowers is reduced, by payment or prepayment, to be less than $5,000,000, such
Offshore Rate Loans shall automatically convert into Base Rate Loans, and on and
after such date the right of Conseco (on behalf of the Borrowers) to continue
such Loans as, or convert such as into, Offshore Rate Loans, as the case may be,
shall terminate.
(b) Conseco (on behalf of the Borrowers) shall deliver a
Notice of Conversion/Continuation to be received by the Agent not later than
12:00 Noon (New York City time) at least (i) three Business Days in advance of
the Conversion/Continuation Date, if the Loans are to be converted into or
continued as Offshore Rate Loans; and (ii) one Business Day in advance of the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the Type of Loans resulting from the proposed conversion
or continuation; and
(D) in the case of conversions into Offshore Rate Loans, the
duration of the requested Interest Period.
(c) If, upon the expiration of any Interest Period applicable
to Offshore Rate Loans, Conseco (on behalf of the Borrowers) has failed to
select timely a new Interest Period to be applicable to such Offshore Rate Loans
(and if no Default or Event of Default relating to Conseco is then continuing),
Conseco (on behalf of the Borrowers) shall be deemed to have selected the
continuation of such Offshore Rate Loans, with the new Interest Period to be
identical in length to the expired period. If, upon the expiration of any
Interest Period applicable to Offshore Rate Loans, any Default or Event of
Default relating to Conseco is then continuing, Conseco (on behalf of the
Borrowers) shall be deemed to have elected to convert such Offshore Rate Loans
into Base Rate Loans effective as of the expiration date of such Interest
Period.
(d) The Administrative Agent will promptly notify each Bank of
its receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by Conseco (on behalf of the Borrowers), the Administrative Agent will
promptly notify each Bank of the details of any automatic conversion. All
conversions and continuations shall be made ratably according to the
17
respective outstanding principal amounts of the Loans with respect to which the
notice was given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the
continuance of a Default or Event of Default relating to Conseco, Conseco (on
behalf of the Borrowers) may not elect to have a Loan converted into or
continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, unless the Administrative Agent shall otherwise consent, there may not be
more than five (5) Interest Periods in effect for all Loans hereunder.
SECTION 2.4 Repayment of Loans . Subject to the provisions of
Sections 4.1 and 10.2, the Loans of each Bank shall be payable in full (and each
Borrower agrees to pay such Loans) on the Termination Date.
SECTION 2.5 Loan Accounts; Record Keeping . (a) The Loans made
by each Bank shall be evidenced by one or more loan accounts or records
maintained by such Bank in the ordinary course of business and the
Administrative Agent. The loan accounts or records maintained by the
Administrative Agent and each Bank shall be conclusive absent manifest error of
the amount of the Loans made by the Banks to the Borrowers and the interest and
payments thereon; provided, that in the event of a conflict between information
recorded by the Administrative Agent and any Bank as to such Bank's Loans, the
records of the Administrative Agent absent manifest error shall control. Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligations of any Borrower hereunder or to pay any amount
owing with respect to the Loans.
(b) The Loans made by the Banks to each Borrower shall, upon
the request of the Administrative Agent, be evidenced by a Note executed and
delivered by such Borrower payable to the Administrative Agent, for the benefit
of the Banks, in an aggregate principal amount equal to the aggregate Loans to
such Borrower instead of or in addition to loan accounts. The Administrative
Agent shall endorse on the schedules annexed to each Note the amount of each
payment of principal made by such Borrower with respect thereto. The
Administrative Agent is irrevocably authorized by each Borrower to endorse the
Note of such Borrower and the Administrative Agent's record shall be conclusive
absent manifest error; provided, however, that the failure of the Administrative
Agent to make, or an error in making, a notation thereon with respect to any
Loan shall not limit or otherwise affect the obligations of any Borrower
hereunder or under any such Note to any Bank.
SECTION 3.INTEREST AND FEES
SECTION 3.1 Interest Rates. With respect to each Loan made to
any Borrower hereunder, such Borrower hereby promises to pay interest on the
unpaid principal amount thereof for the period commencing on the Closing Date of
such Loan until such Loan is paid in full as follows:
(a) at all times while such Loan or any portion thereof is a
Base Rate Loan, at a rate per annum equal to the Base Rate from time to
time in effect plus 1.50%.
18
(b) at all times while such Loan or any portion thereof is an
Offshore Rate Loan, at a rate per annum equal to the Offshore Rate,
plus 2.50%.
SECTION 3.2 Default Interest Rate . Notwithstanding the
provisions of Section 3.1, in the event that any Default under Section 10.1.2 or
any Event of Default shall occur with respect to any Borrower, such Borrower
hereby promises to pay, automatically in the case of a Default under Section
10.1.2 or upon demand therefor by the Administrative Agent for any Event of
Default (other than pursuant to Section 10.1.2), interest on the unpaid
principal amount of the Loans of such Borrower (and interest thereon to the
extent permitted by law) for the period commencing on the date of such Default
or demand until such Loans are paid in full or such Default or Event of Default
is cured or waived in accordance with Sections 10.2 and 13.1 at a rate per annum
equal to the applicable interest rate from time to time in effect (but not less
than the applicable interest rate as at such date of demand), plus three percent
(3%) per annum.
SECTION 3.3 Interest Payment Dates . Interest on each Loan
shall be paid in arrears on each Interest Payment Date. Interest shall also be
paid on the date of any prepayment of Loans under Section 4.1 for the portion of
the Loans so prepaid and upon payment (including prepayment) in full thereof and
during the continuance of any Event of Default, interest shall be paid on demand
of the Administrative Agent at the request or with the consent of the Required
Banks. After maturity, accrued interest on the Loans shall be payable on demand.
SECTION 3.4 Setting and Notice of Rates . The applicable
Offshore Rate shall be determined by the Administrative Agent. Each
determination of the applicable Offshore Rate shall be conclusive and binding
upon the parties hereto, in the absence of manifest error. If the Administrative
Agent is unable to determine such a rate, the provisions of Section 5.3 shall
apply. The Administrative Agent shall, upon written request of Conseco (on
behalf of the Borrowers) or a Bank, deliver to Conseco (on behalf of the
Borrowers) or such Bank a statement showing the computations used by the
Administrative Agent in determining any applicable Offshore Rate hereunder.
SECTION 3.5 Computation of Interest and Fees . Interest on
Offshore Rate Loans shall be computed for the actual number of days elapsed on
the basis of a 360-day year, and interest on Base Rate Loans shall be computed
for the actual number of days elapsed on the basis of a 365/366-day year. Each
determination of an interest rate by the Administrative Agent shall be
conclusive and binding on the Borrowers and the Banks in the absence of manifest
error. Notwithstanding anything contained herein to the contrary interest on the
Loans shall not exceed the maximum interest permitted by applicable law.
SECTION 4.PAYMENTS AND PREPAYMENTS
SECTION 4.1 Prepayments. (a) Mandatory Prepayments. So long
as Loans are outstanding, each Borrower shall be obligated to cause all amounts
to which such Borrower is entitled under the Plan (other than amounts expressly
designated for the payment of taxes relating thereto) to be paid to reduce
permanently, on a pro rata basis, such Borrower's obligations under the New
Credit Agreements Re D&O Loans. Each Borrower further acknowledges that, so long
as Loans are outstanding, any payments made by such Borrower to Conseco on
account of any loans made to such Borrower by Conseco to fund the payment of
19
interest on the Existing Loans or the Loans are to be turned over by Conseco and
paid to reduce permanently, on a pro rata basis, such Borrower's obligations
under the New Credit Agreements Re D&O Loans. So long as Loans are outstanding,
each Borrower shall cause all cash dividends declared and paid on the Pledged
Shares (as such term is defined in the Pledge Agreement) to be paid in permanent
reduction of such Borrower's Loans and other Liabilities. Consistent with, but
not in limitation of, the foregoing, each of the Borrowers hereby irrevocably
authorizes and directs Conseco to wire transfer to the Administrative Agent any
and all such dividends so declared and paid on a quarterly basis so long as the
affected Borrower's Liabilities have not been paid in full.
(b) Optional Prepayments . Each Borrower may, at any time or
from time to time, upon not less than three (3) Business Day's irrevocable
written notice with respect to such Borrower's Loans to the Administrative Agent
by 12:00 Noon (New York City time), ratably prepay such Loans in whole or in
part, in minimum amounts of $10,000 or any integral multiple of $1,000 in excess
thereof (unless such Borrower is prepaying the total amount of the Loans then
outstanding with respect to such Borrower). Such notice of prepayment shall
specify the date, the amount of such prepayment and the Types of Loans to be
prepaid. The Administrative Agent will promptly notify each Bank of its receipt
of any such notice, and of such Bank's Percentage of such prepayment. If such
notice is given by such Borrower, such Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 5.5.
SECTION 4.2 Payments by the Borrowers . (a) All payments to be
made by any Borrower hereunder shall be made without setoff, recoupment or
counterclaim. Except as otherwise expressly provided herein, all payments by
such Borrower shall be made to the Administrative Agent for the account of the
Banks at the Administrative Agent's Office, and shall be made in Dollars and in
immediately available funds, no later than 1:30 P.M. (New York City time) on the
date specified herein. The Administrative Agent will promptly distribute to each
Bank its Percentage (or other applicable share as expressly provided herein) of
such payment in like funds as received. Any payment received by the
Administrative Agent later than 1:30 P.M. (New York City time) shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
Interest Period, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Administrative Agent receives notice from the
applicable Borrower prior to the date on which any payment is due to the Banks
that such Borrower will not make such payment in full as and when required, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent such Borrower has not made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent on demand
20
such amount distributed to such Bank, together with interest thereon at the
Federal Funds Rate for each day from the date such amount is distributed to such
Bank until the date repaid.
SECTION 4.3 Sharing of Payments. (a) If any Bank shall obtain
any payment or other recovery (whether voluntary, involuntary, by application of
offset or otherwise) on account of the Loans (other than pursuant to the terms
of Sections 5, 12.1 and 13.2) in excess of its pro rata share (based on its
Percentage) of payments and other recoveries obtained by all Banks of the Loans
on account of principal of and interest on the Loans, such Bank shall purchase
from the other Banks such participation in the Loans as shall be necessary to
cause such purchasing Bank to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Bank, the
purchase shall be rescinded and each Bank which has sold a participation to the
purchasing Bank shall repay to the purchasing Bank the purchase price to the
ratable extent of such recovery together with an amount equal to such selling
Bank's ratable share (according to the proportion of (i) the amount of such
selling Bank's required repayment to the purchasing Bank to (ii) the total
amount so recovered from the purchasing Bank) of any interest or other amount
paid or payable by the purchasing Bank in respect of the total amount so
recovered.
(b) Each Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to Section 4.3(a) may, to the fullest
extent permitted by law, exercise all its rights of payment (including pursuant
to Section 4.4) with respect to such participation as fully as if such Bank were
the direct creditor of such Borrower in the amount of such participation. If
under any applicable bankruptcy, insolvency or other similar law, any Bank
receives a secured claim in lieu of a setoff to which this Section 4.3 applies,
such Bank shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Banks entitled
under this Section 4.3(b) to share in the benefits of any recovery of such
secured claim.
SECTION 4.4 Setoff . Each Bank shall, during the continuance
of any Event of Default under Section 10.1.1, the continuance of an Event of
Default under Section 10.1.2, or, with the consent of the Required Banks, during
the continuance of any other Event of Default, have the right to appropriate and
apply to the payment of the Liabilities owing to it (whether or not then due),
and (as security for such Liabilities) each Borrower hereby grants to each Bank
a continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of such Borrower then or thereafter maintained with such
Bank. Any such appropriation and application shall be subject to the provisions
of Section 4.3. Each Bank agrees promptly to notify such Borrower and the
Administrative Agent after any such setoff and application made by such Bank;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Bank under this
Section 4.4 are in addition to other rights and remedies (including other rights
of setoff under applicable law or otherwise) which such Bank may have.
SECTION 4.5 Net Payments . (a) All payments by any Borrower of
principal of, and interest on, the Loans and all other amounts payable hereunder
shall be made free and clear of and without deduction for any present or future
income, stamp or other Taxes, fees, duties, withholdings or other charges of any
nature whatsoever imposed by any taxing authority,
21
other than Taxes imposed on or measured by any Bank's net income or receipts
with respect to payments received hereunder (such nonexcluded items being called
"Charges"). In the event that any withholding or deduction from any payment to
be made by any Borrower hereunder is required in respect of any Charges pursuant
to any applicable law, rule or regulation, then such Borrower will, upon notice
from the Bank so affected:
(i) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(ii) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority;
(iii) pay to the Administrative Agent for the account of the
Banks such additional amount or amounts as are necessary to ensure that
the net amount actually received by each Bank will equal the full
amount such Bank would have received had no such withholding or
deduction been required; and
(iv) if any Bank receives a refund in respect of any Taxes as
to which it has been indemnified by any Borrower or with respect to
which any Borrower (or any Person acting on behalf of such Borrower)
has paid additional amounts pursuant to this Section 4.5, it shall
promptly repay such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by such Borrower (or such
Person acting on behalf of such Borrower) under this Section 4.5 with
respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses of such Bank or the Administrative Agent, as the
case may be; provided, that such Borrower, upon the request of such
Bank or the Administrative Agent, agrees to return such refund
(together with any penalties, interest or other charges due in
connection therewith to the appropriate taxing authority or other
Governmental Authority) to such Bank or the Administrative Agent in the
event such Bank or the Administrative Agent is required to pay or to
return such refund to the relevant taxing authority or other
Governmental Authority.
(b) Each Bank that is organized under the laws of a
jurisdiction other than the United States shall, prior to the due date of any
payments under the Loans, execute and deliver to the Borrowers, on or about the
first scheduled payment date in each calendar year, a United States Internal
Revenue Service Form W-BEN, Form W-ECI or Form W-8IMY, as may be applicable (or
any successor form), appropriately completed.
(c) Notwithstanding anything to the contrary in this Section
4, each Borrower shall not be required to compensate any Bank for Charges
pursuant to Section 4(a) to the extent such Bank's compliance with Section 4(b)
at the time such Bank becomes a party to this Agreement fails to establish a
complete exemption for such Bank from such Charges or to the extent such failure
to establish a complete exemption from such Charges thereafter is attributable
to the action or inaction of such Bank.
(d) Notwithstanding anything to the contrary contained in this
Section 4, to the extent any notice required by Section 4(a) is given by any
Bank to any Borrower more than 90
22
days after such Bank has knowledge of the occurrence of the event giving rise to
such Charges, such Bank shall not be entitled to compensation under such Section
4(a) for any such Charges incurred or accruing prior to the giving of such
notice to such Borrower.
(e) Each Bank agrees that, upon the occurrence of any event
giving rise to the operation of Section 4(a) with respect to such Bank it will,
if requested by any Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to take any actions available to it (including the
designation of another Lending Office for any Loans affected by such event) with
the object of avoiding the consequences of such event; provided that such
designation is made on terms that in the reasonable judgment of such Bank cause
such Bank and its Lending Office to suffer no economic, legal or regulatory
disadvantages.
(f) Without prejudice to the survival of any other agreement
of the Borrowers hereunder or any other document, the agreements of the
Borrowers contained in this Section 4.5 shall survive satisfaction of the
Liabilities and termination of this Agreement.
SECTION 5.CHANGES IN CIRCUMSTANCES
SECTION 5.1 Increased Costs. If (a) Regulation D, or (b)
after the Closing Date, the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank (or
any Lending Office of such Bank) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency,
(i) shall subject any Bank (or any Lending Office of such
Bank) to any tax, duty or other charge or shall change the basis of
taxation of payments to any Bank of the principal of, or interest on,
any other amounts due under this Agreement in respect of its Loans or
its obligation to make Loans (except for changes in the rate of Tax,
other than Taxes covered by Section 4.5, measured on the overall gross
or net income of such Bank or its Lending Office); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the FRB, but
excluding any reserve included in the determination of interest rates
pursuant to Section 3), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
any Bank (or any Lending Office of such Bank); or
(iii) shall impose on any Bank (or its Lending Office) any
other condition affecting its Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D referred to above, to impose a cost on) such Bank (or any
Lending Office of such Bank) of making or maintaining Offshore Rate Loans to
reduce the amount of any sum received or receivable by such Bank (or the Lending
Office of such Bank) under this Agreement or under its Loans with respect
thereto, then within thirty (30) days after demand by such Bank (which demand
shall be accompanied by a statement setting forth in reasonable detail the basis
of such
23
demand and the calculation of such additional amount), the relevant Borrowers
shall pay directly to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or such reduction. Each Bank shall
promptly, but in no event more than ninety (90) days after it has knowledge
thereof, notify such Borrower of any event occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section 5.1. In
the event such notice is not given within the time frame specified in the
immediately preceding sentence, such Bank shall not be entitled to compensation
under this Section 5.1 for any such additional costs or charges incurred or
accruing prior to the giving of such notice to such Borrower.
SECTION 5.2 Change in Rate of Return . If any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other Governmental Authority affects or would affect the amount of capital
required or expected to be maintained by any Bank or any Person controlling such
Bank, and such Bank reasonably determines that the rate of return on its or such
controlling Person's capital as a consequence of the Loans made by such Bank (or
any participating interest therein held by such Bank) is reduced to a level
below that which such Bank or such controlling Person could have achieved but
for the occurrence of any such circumstance, then, in any such case the relevant
Borrowers shall, within thirty (30) days after written demand by such Bank to
such Borrowers, pay directly to such Bank additional amounts sufficient to
compensate such Bank or such controlling Person for such reduction in rate of
return. A statement of such Bank as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on such Borrowers. In determining such
amount, such Bank may use any method of averaging and attribution that it shall
deem reasonably applicable. Each Bank shall promptly, but in no event more than
ninety (90) days after it has knowledge thereof, notify such Borrowers of any
event occurring after the Closing Date, which will entitle such Bank to
compensation pursuant to this Section 5.2. In the event such notice is not given
within the time frame specified in the immediately preceding sentence, such Bank
shall not be entitled to compensation under this Section 5.2 for any such
additional costs or charges incurred or accruing prior to the giving of such
notice to such Borrower.
SECTION 5.3 Basis for Determining Interest Rate Inadequate or
Unfair . If with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not
being offered to the Administrative Agent in the offshore dollar
interbank market for such Interest Period, or the Administrative Agent
otherwise determines (which determination shall be conclusive and
binding on all parties) that by reason of circumstances affecting the
offshore dollar interbank market adequate and reasonable means do not
exist for ascertaining the applicable Offshore Rate; or
(b) any Bank advises the Administrative Agent that the
Offshore Rate as determined by the Administrative Agent, will not
adequately and fairly reflect the cost to such Bank of maintaining or
funding such Loan for such Interest Period, or that the making or
funding of Offshore Rate Loans has become impracticable as a result of
an
24
event occurring after the Closing Date which in the opinion of such
Bank materially changes such Loans; then, so long as such circumstances
shall continue:
(i) the Administrative Agent shall promptly notify Conseco (on
behalf of the Borrowers) and the Banks thereof,
(ii) no Bank shall be under any obligation to make or continue
or convert into Offshore Rate Loans so affected, and
(iii) on the last day of the then current Interest Period for
Offshore Rate Loans so affected, such Offshore Rate Loans shall, unless
then repaid in full, automatically convert to Base Rate Loans.
SECTION 5.4 Changes in Law Rendering Certain Loans Unlawful .
In the event that any change in (including the adoption of any new) applicable
laws or regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for a Bank or the Lending Office
of such Bank ("Affected Bank") to make, maintain or fund Offshore Rate Loans,
then (a) the Affected Bank shall promptly notify each of the other parties
hereto, (b) the obligation of all Banks to make or continue or convert into
Offshore Rate Loans or make Offshore Rate Loans made unlawful for the Affected
Bank shall, upon the effectiveness of such event, be suspended for the duration
of such unlawfulness, and (c) on the last day of the current Interest Period for
Offshore Rate Loans (or, in any event, if the Affected Bank so requests, on such
earlier date as may be required by the relevant law, regulation or
interpretation), the Offshore Rate Loans shall, unless then repaid in full,
automatically convert to Base Rate Loans.
SECTION 5.5 Funding Losses . Each Borrower hereby agrees that
upon demand by any Bank to the Administrative Agent (which demand shall be made
within three (3) Business Days after receipt of notice of any payment or
proposed payment by such Borrower under this Agreement giving rise to
indemnification under this Section 5.5 and shall be accompanied by a statement
setting forth in reasonable detail using the Funding Loss Formula set forth in
Exhibit I) such Borrower will indemnify such Bank against any loss or expense
which such Bank may sustain or incur (including, without limitation, any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund or maintain Offshore Rate Loans), as
reasonably determined by such Bank, as a prepayment or conversion of any
Offshore Rate Loans of such Bank on a date other than the last day of an
Interest Period for such Offshore Rate Loan, or (b) any failure of such Borrower
to borrow Offshore Rate Loans on the date of any Borrowing set forth in any
Notice of Borrowing or (c) any failure of such Borrower to convert or continue
any portion of the Loans as Offshore Rate Loans on a date specified therefor in
the Notice of Continuation/Conversion delivered pursuant to this Agreement. For
this purpose, all notices to the Administrative Agent pursuant to this Agreement
shall be deemed to be irrevocable.
SECTION 5.6 Right of Banks to Fund Through Other Offices .
Each Bank may, if it so elects, fulfill its commitment as to any Offshore Rate
Loans by causing any of its Lending
25
Offices to make such Offshore Rate Loans; provided, that in such event for the
purposes of this Agreement, such Loan shall be deemed to have been made by such
Bank and the obligation of the Borrower to repay such Offshore Rate Loan shall
nevertheless be to such Bank and shall be deemed held by it, to the extent of
such Offshore Rate Loan, for the account of such branch or affiliate.
SECTION 5.7 Discretion of Banks as to Manner of Funding .
Notwithstanding any provision of this Agreement to the contrary, each Bank shall
be entitled to fund and maintain its funding of all or any part of its Loans in
any manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder shall be made as if such Bank had
actually funded and maintained each Offshore Rate Loan during each Interest
Period for such Loan through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
Offshore Rate, as the case may be, for such Interest Period.
SECTION 5.8 Replacement of Banks . If any Bank shall (i)
become affected by any of the changes or events described in Section 4.5, 5.1,
5.2, 5.3(b), or 5.4 above and such Bank shall petition the relevant Borrowers
for any increased cost or amounts thereunder or (ii) become insolvent and its
assets become subject to a receiver, liquidator, trustee, custodian or such
other Person having similar powers (any such Bank, in either instance, being
hereinafter referred to as a "Replaced Bank"), then in each such case, Conseco
(on behalf of the Borrowers) may, upon at least five (5) Business Days' notice
to the Administrative Agent and such Replaced Bank, designate a replacement bank
(a "Replacement Bank") acceptable to the Administrative Agent in its reasonable
discretion, to which such Replaced Bank shall, subject to its receipt (unless a
later date for the remittance thereof shall be agreed upon by the relevant
Borrowers and the Replaced Bank) of all amounts owed to such Replaced Bank under
Section 4.5, 5.1, 5.2, 5.3(b), or 5.4 above, assign all (but not less than all)
of its rights, obligations, Loans and Commitment hereunder and execute an
Assignment Agreement with such Replacement Bank; provided, that all Liabilities
(except Liabilities which by the terms hereof survive the payment in full of the
Loans and termination of this Agreement) due and payable to the Replaced Bank
shall be paid in full as of the date of such assignment. Upon any assignment by
any Bank pursuant to this Section 5.8 becoming effective, the Replacement Bank
shall thereupon be deemed to be a "Bank" for all purposes of this Agreement and
such Replaced Bank shall thereupon cease to be a "Bank" for all purposes of this
Agreement and shall have no further rights or obligations hereunder (other than
pursuant to Sections 4.5, 5.1, 5.2, 5.5, 11.5 and 13.4, and Sections 7.1 and 7.2
of the Conseco Guaranty while such Replaced Bank was a Bank). Notwithstanding
any Replaced Bank's failure or refusal to assign its rights, obligations and
Loans under this Section 5.8, the Replaced Bank shall cease to be a "Bank" for
all purposes of this Agreement and the Replacement Bank substituted therefor
upon payment to the Replaced Bank by the Replacement Bank of all amounts set
forth in this Section 5.8 without any further action of the Replaced Bank.
SECTION 5.9 Conclusiveness of Statements; Survival of
Provisions . Determinations and statements of the Administrative Agent or any
Bank pursuant to Sections 5.1, 5.2, 5.3, 5.4 and Section 5.5 shall be conclusive
absent demonstrable error. The provisions of Sections 5.1, 5.2, 5.5 and this
Section 5.9 shall survive termination of this Agreement.
26
SECTION 5.10 Avoidance of Certain Costs . The Administrative
Agent and each Bank agrees that, notwithstanding the provisions of Sections
5.1-5.4 hereof to the contrary, the Administrative Agent and each Bank shall
take reasonable actions available to it (including designation of a different
Lending Office), consistent with legal and regulatory restrictions, that will
avoid the need to take the steps described in any such Section, which will not,
in the reasonable judgment of the Administrative Agent or any such Bank, be
disadvantageous to the Administrative Agent or such Bank.
SECTION 6.COLLATERAL AND OTHER SECURITY
SECTION 6.1 Collateral Documents . Concurrently with or prior
to the Closing Date:
(a) Pledge Agreement (Conseco Stock). The Borrowers shall
execute and deliver to the Administrative Agent, for the benefit of the
Banks, the Pledge Agreement, whereby each of the Borrowers shall pledge
all of the issued and outstanding common stock of Conseco owned by each
Borrower and acquired with the proceeds of the Existing Loans and shall
direct the administrative agent under the Existing Credit Agreement to
deliver to the Administrative Agent all stock certificates pledged
pursuant thereto and all related stock powers.
(b) Conseco Guaranty. Conseco shall execute and deliver to the
Administrative Agent the Conseco Guaranty, covering the payment and
performance of all of the Liabilities.
(c) CIHC Guaranty. CIHC shall execute and deliver to the
Administrative Agent the CIHC Guaranty, covering the payment and
performance of all the Liabilities.
(d) Reaffirmation of Existing Conseco Guaranty. Conseco shall
execute and deliver to the Administrative Agent the Reaffirmation of
Existing Conseco Guaranty.
(e) Reaffirmation of Existing CIHC Guaranty. CIHC shall
execute and deliver to the Administrative Agent the Reaffirmation of
Existing CIHC Guaranty.
(f) Subordinated Pledge Agreement Re 1997 Shares. A
Subordinated Pledge Agreement Re 1997 Shares, executed by the pledgors
thereunder, and acknowledged by the administrative agent under the New
Credit Agreement Re 1997 Loans, shall be delivered to BofA as
administrative or collateral agent.
(g) Subordinated Pledge Agreement Re 1998 Shares. A
Subordinated Pledge Agreement Re 1998 Shares, executed by the pledgors
thereunder, and acknowledged by the administrative agent under the New
Credit Agreement Re 1998 Loans, shall be delivered to BofA as
administrative or collateral agent.
(h) Second Amendment to the Collateral Agreement. Conseco and
CIHC shall execute and deliver to the Administrative Agent the Second
Amendment to the Collateral Agreement.
27
(i) First Amendment to the Collateral Sharing Agreement.
Conseco and CIHC shall execute and deliver to the Administrative Agent
the First Amendment to the Collateral Sharing Agreement.
SECTION 6.2 Pledge of Additional Collateral . On or before
December 31, 2000 (or such later date as permitted to any AC Pledge Borrowers to
pledge Additional Collateral pursuant to the provisions of the Plan), the AC
Pledge Borrowers, if any, shall grant to the AC Collateral Agent, for the
benefit of the banks under New Credit Agreements Re D&O Loans, a first,
perfected security interest in the Additional Collateral. Specifically, on or
before such date, the AC Collateral Agent shall have received: (i) the AC Pledge
Agreement, (ii) all stock certificates pledged pursuant thereto, (iii)
appropriate stock powers for such shares endorsed in blank, (iv) appropriate
evidence of the perfection and first priority of such collateral agent's Lien,
including UCC financing statements and/or registration or acknowledgments of the
Lien of such collateral agent on any applicable brokerage account of each AC
Pledge Borrower, and (v) a certificate from Conseco, in form reasonably
satisfactory to the Administrative Agent, signed by a Responsible Officer,
identifying the AC Pledge Borrowers by name and describing the Additional
Collateral to be pledged by each such Borrower. Consistent with (but not in
limitation of) the foregoing and the other provisions of this Agreement and the
other Loan Documents, (a) the delivery of any Additional Collateral to the AC
Collateral Agent, to be held and disposed of pursuant to the provisions of the
AC Pledge Agreement, shall constitute a collateral pledge of such property and
shall not constitute a paydown on the Loans or otherwise entitle the AC Pledge
Borrower to any reduction in the amount of such Borrower's Loans unless and
until the AC Collateral Agent disposes of such property and applies the proceeds
thereof as provided pursuant to the provisions of the AC Pledge Agreement, (b)
none of the AC Collateral Agent, the Administrative Agent, and the Banks shall
have or otherwise incur any liability in favor of the AC Pledge Borrower,
Conseco, or any other Person with respect to the AC Pledge Agreement and/or the
Additional Collateral except solely to the extent expressly set forth in the AC
Pledge Agreement, and (c) consistent with (but not in limitation of) the
preceding clause (b), the AC Pledge Borrowers and Conseco shall bear (and thus
reimburse the AC Collateral Agent promptly for) any and all reasonable costs and
expenses of the AC Collateral Agent's accepting, maintaining, and realizing on
the pledge of the Additional Collateral. If there are to be no AC Pledge
Borrowers, on or before December 31, 2000, Conseco shall provide the
Administrative Agent with a certificate to such effect, signed by a Responsible
Officer. If on or before such date, there are no AC Pledge Borrowers but,
pursuant to the provisions of the Plan, such deadline has been extended as to
various Borrowers, such certificate shall identify such Borrowers and the
extended deadlines as to such Borrowers.
SECTION 6.3 Application of Proceeds from Collateral . As to
each Borrower, all proceeds received by the Administrative Agent from the sale
or disposition of any of the Direct Collateral furnished by such Borrower
pursuant to this Agreement or Indirect Collateral furnished by Conseco pursuant
to the Conseco Guaranty shall be applied by the Administrative Agent in the
following order after receipt thereof:
First: to the payment of all of the reasonable costs and
expenses of the Administrative Agent in connection with (a) the
administration, sale or disposition of such Direct Collateral or
Indirect Collateral, as the case may be, and (b) the administration and
enforcement of this Agreement and the other Loan Documents, to the
28
extent that such costs and expenses shall not have been reimbursed to
the Administrative Agent and relate to such Borrower's Loans;
Second: to the payment in full of all accrued and unpaid
interest on the Loans of such Borrower, then to the payment in full of
all unpaid principal of the Loans of such Borrower, and then to any
remaining Liabilities of such Borrower;
Third: the balance, if any, of such proceeds shall be paid to
such Borrower, to such Borrower's heirs and assigns, or as a court of
competent jurisdiction may direct.
Notwithstanding the foregoing, (x) the proceeds of the Additional Collateral
shall be applied as set forth in the AC Pledge Agreement, (y) the proceeds of
any collateral pledged pursuant to the Subordinated Pledge Agreement Re 1997
Shares shall be applied as set forth therein, and (z) the proceeds of the
Subordinated Pledge Agreement Re 1998 Shares shall be applied as set forth
therein.
SECTION 6.4 Further Assurances . Each Borrower agrees that
upon request of the Administrative Agent (a) such Borrower shall promptly
deliver or cause to be delivered to the Administrative Agent, in due form for
transfer, all chattel paper, instruments, securities and documents of title, if
any, at any time representing all or any of the Direct Collateral, and (b) such
Borrower shall forthwith execute and deliver or cause to be executed and
delivered to the Administrative Agent, in due form for filing or recording (and
pay the cost of filing or recording the same in all public offices deemed
necessary by the Administrative Agent), such further assignment agreements,
security agreements, pledge agreements, instruments, consents, waivers,
financing statements, stock or bond powers, searches, releases, and other
documents, and do such other acts and things, all as the Administrative Agent
may from time to time reasonably request to establish and maintain to the
satisfaction of the Administrative Agent a valid perfected Lien on all Direct
Collateral (free of all other Liens except those permitted pursuant to Section
7.4 hereof) to secure payment of the Liabilities.
SECTION 7.REPRESENTATIONS AND WARRANTIES OF BORROWERS
To induce the Administrative Agent and the Banks to enter into
this Agreement and to make the Loans hereunder, each Borrower represents and
warrants to the Administrative Agent and to each of the Banks that:
SECTION 7.1 No Conflict . The execution, delivery and
performance by such Borrower of this Agreement and the other Loan Documents to
which such Borrower is a party does not and will not (a) contravene or conflict
with any provision of any law, statute, rule or regulation applicable to such
Borrower, (b) contravene or conflict with, result in any breach of, or
constitute a default under, any material agreement or instrument binding on such
Borrower (including, without limitation, any writ, judgment, injunction or other
similar court order) or (c) result in the creation or imposition of or the
obligation to create or impose any Lien upon any of the property or assets of
such Borrower (except for (i) the Lien of the Administrative Agent pursuant to
the Pledge Agreement, (ii) the Liens under any subordinated pledge agreements in
favor of the administrative agent under any Other D&O Agreement, and (iii) the
Lien of the AC Collateral Agent under the AC Pledge Agreement.
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SECTION 7.2 Validity . This Agreement and the other Loan
Documents to which such Borrower is a party constitute or upon execution and
delivery will constitute the legal, valid and binding obligation of such
Borrower enforceable in accordance with its terms subject to (a) applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally and (b) general equitable principles, including
without limitation, concepts of good faith and fair dealing, materiality,
fraudulent transfer and reasonableness (regardless of whether considered in a
proceeding in equity or at law).
SECTION 7.3 Litigation and Contingent Obligations . No
Material Litigation, other than the Existing Litigation, is pending as to such
Borrower or, to the best of such Borrower's knowledge, threatened as to such
Borrower, and such Borrower has no material Contingent Obligations.
SECTION 7.4 Liens . None of the Direct Collateral pledged by
such Borrower is subject to any Lien (except for (a) the Lien of the
Administrative Agent pursuant to the Pledge Agreement, (b) the Liens under any
subordinated pledge agreement in favor of the administrative agent under any
Other D&O Agreement, and (c) the Lien of the AC Collateral Agent under the AC
Pledge Agreement). Such Borrower shall not be able or entitled to grant any
Liens in favor of any Person in and to the Plan Rights.
SECTION 7.5 Taxes . Such Borrower has filed all material
federal and state tax returns and related reports required by law to have been
filed by such Borrower and has paid Taxes thereby shown to be owing, except any
such Taxes which are being diligently contested in good faith by appropriate
proceedings and Taxes with respect to which the failure to pay could not
reasonably be expected to have a Material Adverse Effect. There is no ongoing
audit or, to the best of such Borrower's knowledge, other governmental
investigation of the tax liability of such Borrower and there is no unresolved
claim by a taxing authority concerning such Borrower's tax liability, for any
period for which returns have been filed or were due.
SECTION 7.6 Accuracy of Information . All factual information
furnished as of the Closing Date by or on behalf of such Borrower in writing to
the Administrative Agent or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other such factual
information furnished after the Closing Date by or on behalf of such Borrower to
the Administrative Agent or any Bank will be, true and accurate in every
material respect on the date as of which such information is dated or certified
and, except as such information speaks solely as of a particular date, such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
SECTION 7.7 Proceeds . The proceeds of the Loans will be used
solely to refinance the loans of such Borrower under the Existing Credit
Agreement.
SECTION 7.8 Securities Laws . Neither such Borrower nor, to
the best of such Borrower's knowledge, any of its Affiliates, nor anyone acting
on behalf of any such Person, has directly or indirectly offered any interest in
the Loans or any other Liabilities for sale to, or solicited any offer to
acquire any such interest from, or has sold any such interest to, any Person
30
that would subject the making of the Loans or any other Liabilities to
registration under the Securities Act of 1933, as amended.
SECTION 7.9 No Default. Such Borrower is not in default under
any agreement or instrument to which such Borrower is a party or by which any of
its properties or assets is bound or affected, which default could reasonably be
expected to have a Material Adverse Effect.
SECTION 7.10 Organization, etc. Each Borrower (other than any
Borrower which is an individual) is a corporation, partnership or irrevocable
trust duly organized, validly existing and, with respect to any corporation or
partnership, in good standing under the laws of the state of its incorporation
or formation and each corporate or partnership Borrower is duly qualified to
transact business as a foreign corporation or partnership authorized to do
business in each jurisdiction where the nature of its business makes such
qualification necessary and failure to so qualify could reasonably be expected
to have a Material Adverse Effect.
SECTION 7.11 Authorization. Each Borrower (other than any
Borrower which is an individual) (a) has the power to execute, deliver and
perform this Agreement and the other Loan Documents to which it is a party, and
(b) has taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement and the other Loan Documents to which it is
a party.
SECTION 7.12 Margin Regulations. (a) None of the obligations
of such Borrower to Conseco is or will be secured, directly or indirectly, by
Margin Stock;
(b) Neither Conseco nor any third party acting on behalf of
Conseco has taken or will take possession of such Borrower's Margin Stock to
secure, directly or indirectly, any of the obligations of such Borrower to
Conseco;
(c) Conseco does not and will not have any right to prohibit
such Borrower from selling, pledging, encumbering or otherwise disposing of any
Margin Stock owned by such Borrower so long as the Conseco Guaranty is in effect
or any of the obligations of such Borrower or the obligations of Conseco under
the this Agreement, the Conseco Guaranty or any of the Loan Documents remain
outstanding;
(d) Such Borrower has not granted and will not grant Conseco
or any third party acting on behalf of Conseco the right to accelerate repayment
of any of the obligations under this Agreement of such Borrower if any of the
Margin Stock owned by such Borrower is sold by such Borrower or otherwise; and
(e) There is no agreement or other arrangement between such
Borrower and Conseco or any third party acting on behalf of Conseco (and no such
agreement or arrangement shall be entered into so long as this Agreement or the
Conseco Guaranty is in effect or any of the obligations of such Borrower or the
obligations of Conseco under the Conseco Guaranty or any of the Loan Documents
remain outstanding) under which the Margin Stock of such Borrower would be made
more readily available as security to Conseco than to other creditors of such
Borrower.
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SECTION 7.13 Principal Residence. The address set forth on
each Borrower's signature page hereof correctly sets forth such Borrower's place
of principal residence. Each Borrower shall promptly (but in no event later than
thirty days after changing such principal place of residence) inform the
Administrative Agent of any and each change in such Borrower's principal place
of residence and provide the Administrative Agent with the Borrower's new,
correct address.
SECTION 7.14 No Default or Event of Default. No Default or
Event of Default as to such Borrower shall exist on the date of the execution
and delivery of this Agreement on the Closing Date.
SECTION 8.COVENANTS OF BORROWERS
Each Borrower agrees that, on and after the Closing Date and
for so long thereafter as any of the Liabilities remain unpaid or outstanding
(except Liabilities which by the terms hereof survive the payment in full of the
Loans and termination of this Agreement), such Borrower will:
SECTION 8.1 Reports, Certificates and Other Information .
Unless otherwise provided herein, furnish or cause to be furnished to the
Administrative Agent and each Bank:
8.1.1 Borrower Financials. Upon the request of the
Administrative Agent, a financial statement of such Borrower in a form
acceptable to the Required Banks;
8.1.2 Tax Returns and Reports. If requested by the
Administrative Agent or the Required Banks, copies of all federal,
state, local and foreign Tax Returns and Reports filed by such Borrower;
8.1.3 Notice of Default and Litigation. Promptly upon
learning of the occurrence of any of the following, written notice
thereof, describing the same and the steps being taken by such Borrower
with respect thereto:
(a) the occurrence of a Default;
(b) the institution of any Material Litigation or the
occurrence of any Material Litigation Development as to such
Borrower;
(c) the commencement of any dispute which might
reasonably be expected to lead to the material modification,
transfer, revocation, suspension or termination of any Loan
Document; or
(d) any Material Adverse Change as to such Borrower;
8.1.4 Collateral Ratio. Upon the request of the
Administrative Agent or the Required Banks, cause Conseco (on behalf of
the Borrowers) to provide to the Administrative Agent, for the benefit
of the Banks, a computation of the Collateral Ratio certified by its
chief financial officer or a senior vice president with responsibility
for or knowledge of financial matters of Conseco. Nothing contained in
this Section 8.1.4 shall
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be deemed to limit in any way whatsoever the Administrative Agent's
right, on behalf of the Banks, to calculate the Loan Value of Direct
Collateral or the Loan Value of Indirect Collateral or the Collateral
Ratio at any time it deems appropriate or necessary. If after making
such calculation, the Administrative Agent or the Required Banks
determine that the amount of such Collateral Ratio is different from
the Collateral Ratio most recently provided by Conseco or the
Administrative Agent, as the case may be, the Administrative Agent
shall deliver written notice of such amount to Conseco (on behalf of
the Borrowers); provided that the Administrative Agent's failure to
deliver such notice shall not prejudice the rights of the
Administrative Agent and the Banks or the obligations of the Borrowers
under this Agreement or the other Loan Documents; and
8.1.5 Other Information . From time to time, such other
information concerning such Borrower as the Administrative Agent or a
Bank may reasonably request.
SECTION 8.2 Taxes and Liabilities . Pay when due all of his,
her or its Taxes and other material liabilities, except as contested in good
faith and by appropriate proceedings and except Taxes with respect to which the
failure to pay could not reasonably be expected to have a Material Adverse
Effect.
SECTION 8.3 Compliance with Laws . Comply with all federal,
state and local laws, rules and regulations related to such Borrower, except
where such failure to comply could not reasonably be expected to have a Material
Adverse Effect.
SECTION 8.4 Other Agreements . Not enter into any agreement
containing any provision which (a) would be violated or breached by the
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by such Borrower hereunder or in connection
herewith, (b) prohibits or restricts the ability of such Borrower to amend or
otherwise modify this Agreement, any other Loan Document or any other document
executed in connection herewith or (c) constitutes an agreement to a limitation
or restriction of the type described in clauses (a) and (b) with respect to any
other Indebtedness.
SECTION 9. CONDITIONS AND EFFECTIVENESS
OF THIS AGREEMENT
The obligation of the Banks to make the Loans and the
effectiveness of this Agreement is subject to the performance by a Borrower of
all of the obligations under this Agreement and to the satisfaction of the
following conditions precedent:
SECTION 9.1 Receipt of Documents . Prior to or concurrent with
the making of the Loans, the Administrative Agent shall have received all of the
following, each, except to the extent otherwise specified below, duly executed
by such Borrower dated the Closing Date (or such earlier date as shall be
satisfactory to the Administrative Agent), in form and substance satisfactory to
the Administrative Agent, each in sufficient number of signed counterparts or
copies to provide one for each Bank and the Administrative Agent:
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9.1.1 If requested by the Administrative Agent, an
appropriately completed Note from each Borrower, payable to the order
of the Administrative Agent evidencing the aggregate Loans to such
Borrower;
9.1.2 The Pledge Agreement;
9.1.3 The Administrative Agent's receipt of all shares of
common stock of Conseco owned by each Borrower which have been
purchased with proceeds of the Existing Loans or any of the foregoing
relating thereto as required by the Pledge Agreement, together with
appropriate stock powers for such shares endorsed in blank and/or other
appropriate evidence of the perfection of the Administrative Agent's
Lien, including UCC financing statements and/or registrations or
acknowledgments of the Lien of the Administrative Agent on any
applicable brokerage account of each Borrower;
9.1.4 The Conseco Guaranty, together with the documents
provided in Article V thereof;
9.1.5 The CIHC Guaranty;
9.1.6 The Reaffirmation of the Existing Conseco Guaranty;
9.1.7 The Reaffirmation of the Existing CIHC Guaranty;
9.1.8 The Subordinated Pledge Agreement Re 1997 Shares,
executed by the pledgors thereunder, and acknowledged by the
administrative agent under the New Credit Agreement Re 1997 Loans;
9.1.9 The Subordinated Pledge Agreement Re 1998 Shares,
executed by the pledgors thereunder, and acknowledged by the
administrative agent under the New Credit Agreement Re 1998 Loans;
9.1.10 The Borrower Acknowledgment and Release executed by
each Borrower;
9.1.11 The Second Amendment to the Collateral Agreement;
9.1.12 The First Amendment to the Collateral Sharing
Agreement;
9.1.13 An opinion of Xxxxx X. Xxxxxx, counsel of Conseco and
CIHC, substantially in the form of Exhibit F-1, and addressing such
other legal matters as the Administrative Agent may reasonably require;
9.1.14 An opinion of Weil, Gotshal & Xxxxxx LLP, outside
counsel to Conseco and CIHC, substantially in the form of Exhibit F-2,
and addressing such other legal matters as the Administrative Agent may
reasonably require;
9.1.15 Certified copies of each material consent, license and
approval required in connection with the execution, delivery,
performance, validity and enforceability of this Agreement and the
other Loan Documents; such consents, licenses and approvals shall be
34
in full force and effect, shall be reasonably satisfactory in form and
substance to the Administrative Agent and shall be all of the material
consents required to be obtained or made on or before the consummation
of the financing contemplated by this Agreement;
9.1.16 A certificate of Conseco in the form attached as
Exhibit O hereto;
9.1.17 Schedules and Exhibits satisfactory to the
Administrative Agent and the Banks;
9.1.18 Evidence satisfactory to the Administrative Agent of
compliance by each Borrower and Conseco with Regulation U in connection
with the financing transactions contemplated hereby;
9.1.19 Evidence of each filing, registration or recordation
(and payment of any necessary fee, Tax or expense relating thereto)
with respect to each document (including, without limitation, any UCC
financing statement) required by the Loan Documents or under law or
requested by the Administrative Agent to be filed, registered or
recorded in order to create, in favor of the Administrative Agent, for
the benefit of the Banks a valid perfected Lien on all Direct
Collateral (free of all other Liens other than the junior and
subordinate Liens to be granted to the administrative agents under the
Other D&O Agreements) other than UCC financing statements to be filed
in connection with the Loan Documents which will be delivered for
filing on the Closing Date;
9.1.20 Evidence satisfactory to the Administrative Agent that
each of the Loan Documents has been duly executed and delivered and is
in full force and effect without modification;
9.1.21 Certified copies of any indemnification or similar
agreements or arrangements between any Borrower and Conseco relating to
the reimbursement by such Borrower of any payments made by Conseco
under the Conseco Guaranty; and
9.1.22 A Federal Reserve Form U-1 for the benefit of the
Banks, duly executed by each Borrower, the statements made in which
shall be such, in the opinion of the Administrative Agent, as to permit
the transactions contemplated by this Agreement in accordance with
Regulation U.
SECTION 9.2 Additional Conditions . The obligation of the
Banks to make Loans to any Borrower hereunder is subject to the following
further conditions precedent:
9.2.1 The Administrative Agent shall have received a duly
executed Notice of Borrowing;
9.2.2 No Default exists or will result from the making of the
Loans, and no Event of Default (as defined under the Revolving Credit
Agreement) has occurred and is continuing; provided, however, that a
Default relating solely to another Borrower will not relieve the Banks
of their obligations to make Loans to other Borrowers subject to the
satisfaction of the other provisions of this Agreement.
35
9.2.3 The representations and warranties of and as to such
Borrower contained in Section 7, and the representations and warranties
of Conseco contained in Article III of the Conseco Guaranty, are true
and correct in all material respects with the same effect as though
made on the Closing Date, except, to the extent that any such
representations and warranties relate expressly to an earlier date,
such representations and warranties shall have been true and correct in
all material respects as of such earlier date;
9.2.4 No Material Litigation exists other than the Existing
Litigation;
9.2.5 No Material Adverse Change has occurred with respect to
Conseco or CIHC since September 22, 2000;
9.2.6 The Collateral Ratio for such Borrower, after giving
effect to such Loan, is at least 2.0 to 1.0; and
9.2.7 Conseco shall have paid all accrued and unpaid fees,
costs and expenses, including reasonable attorney's fees and costs,
with respect to all credit arrangements with the Administrative Agent.
SECTION 00.XXXXXX OF DEFAULT AND THEIR EFFECT
SECTION 10.1 Events of Default . An "Event of Default" shall
exist with respect to a Borrower if any one or more of the following events
(herein collectively called "Events of Default") shall occur and be continuing:
10.1.1 NonPayment of Loans, etc.
(a) Default by such Borrower in the payment or prepayment
when due of any principal on the Loans made to such Borrower,
or
(b) Default by such Borrower in the payment within five
(5) days of when due of any interest on the Loans made to such
Borrower or any other amount owing by such Borrower pursuant
to this Agreement.
10.1.2 Bankruptcy, Insolvency, etc. Such Borrower becomes
insolvent or generally fails to pay, or admits in writing its inability
to pay, debts as they become due; or such Borrower applies for,
consents to, or acquiesces in the appointment of, a trustee, receiver
or other custodian for such Borrower or any property thereof, or makes
a general assignment for the benefit of creditors; or, in the absence
of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for such Borrower or for a substantial
part of the property of such Borrower and is not discharged within
sixty (60) days; or any bankruptcy, reorganization, debt arrangement,
or other case or proceeding under any bankruptcy or similar insolvency
law is commenced in respect of such Borrower and if such case or
proceeding is not commenced by such Borrower, it is consented to or
acquiesced in by such Borrower or remains for sixty (60) days
undismissed.
36
10.1.3 Defaults Under this Agreement . Failure by such
Borrower to comply with or perform any of the covenants or agreements
of such Borrower set forth in this Agreement or the other Loan
Documents applicable to such Borrower (other than those constituting an
Event of Default under any of the other provisions of this Section 10)
and continuance of such failure for thirty (30) days with respect to
such Borrower, in each case after notice thereof to such Borrower from
the Administrative Agent.
10.1.4 Representations and Warranties . Any representation or
warranty made by such Borrower in any of the Loan Documents is false or
misleading in any material respect as of the date hereof or as of the
date hereafter certified, or any schedule, certificate, financial
statement, report, notice, or other writing furnished by such Borrower
to the Administrative Agent or any Bank is false or misleading in any
material respect on the date as of which the facts therein set forth
are stated or certified.
10.1.5 Collateral Ratio . The Collateral Ratio for such
Borrower is less than 1.5 to 1.0.
10.1.6 Defaults under the Conseco Guaranty . An event of
default shall have occurred and be continuing under the Conseco
Guaranty.
10.1.7 Defaults Under Any of the Other D&O Agreements . An
Event of Default or Termination Event in respect of Conseco, any of its
Subsidiaries or such Borrower shall have occurred and be continuing
under any of the Other D&O Agreements.
SECTION 10.2 Effect of Event of Default . If any Event of
Default described in Section 10.1.2 shall occur and be continuing, all
Liabilities of such Borrower, or if any Event of Default under subsection (f) or
(g) of Section 5.01 of the Appendix (as such term is defined in the Conseco
Guaranty), made applicable to Conseco, CIHC or any other Significant Subsidiary
pursuant to Sections 10.1.6 and 10.1.7 hereof, shall occur and be continuing as
to Conseco or CIHC, all Liabilities of all Borrowers, shall become immediately
due and payable, all without presentment, demand, protest or notice of any kind;
and, in the case of any other Event of Default, the Administrative Agent may (or
shall, upon the written request of the Required Banks) declare all Liabilities
with respect to such Borrower, or if such Event of Default relates to Conseco or
CIHC, all Liabilities of all Borrowers, to be due and payable, whereupon all
Liabilities with respect to such Borrower or all Borrowers, as the case may be,
shall become immediately due and payable, all without presentment, demand,
protest or notice of any kind. The Administrative Agent shall promptly advise
such Borrower or all Borrowers, as the case may be, and each Bank of any such
declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing or any provision of Section 13.1, the
effect of an Event of Default of any event described in Section 10.1.2 may be
waived by the written concurrence of the Banks holding 100% of the aggregate
unpaid principal amount of the Loans, and the effect as an Event of Default of
any other event described in this Section 10 may be waived as provided in
Section 13.1. In any such circumstance where the Liabilities of any Borrower or
all Borrowers (as the case may be) have become immediately due and payable,
whether automatically or upon any such declaration (as the case may be), the
Administrative Agent may (or shall, upon the written request of the Required
Banks) exercise or not exercise, as it deems appropriate, on behalf of itself
and the Banks, any and all other rights and remedies
37
available (including after taking into account, as to Conseco and CIHC only, the
restrictions set forth in Sections 2.1 and 6.1 of the Conseco Guaranty) to it
and the Banks under the Loan Documents and/or applicable law against such
Borrower or all Borrowers or any combination thereof (as the case may be),
Conseco and/or CIHC and their respective property.
SECTION 11.THE AGENT
SECTION 11.1 Authorization and Action . Each Bank hereby
appoints and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers to the extent
provided herein or in any document or instrument delivered hereunder or in
connection herewith, together with such other action as may be reasonably
incidental thereto. As to matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of this Agreement or
any other Loan Document) the Administrative Agent shall not be required to
exercise any discretion, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Banks and such instructions shall be binding upon
all Banks. Under no circumstances shall the Administrative Agent have any
fiduciary duties to any Bank or be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement or to the other Loan Documents or applicable law.
SECTION 11.2 Liability of the Administrative Agent . None of
the Administrative Agent or any Agent Related Person shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement and the other Loan Documents, except for its own gross negligence
or willful misconduct. Without limiting the generality of the foregoing, the
Administrative Agent: (a) may treat a Bank as such until the Administrative
Agent receives an executed Assignment Agreement entered into between a Bank and
an Eligible Assignee pursuant to Section 12.1 hereof; (b) may consult with legal
counsel (including counsel for any Borrower), independent public accountants and
other experts or consultants selected by it; (c) shall not be liable for any
action taken or omitted to be taken in good faith by the Administrative Agent in
accordance with the advice of counsel, accountants, consultants or experts; (d)
shall make no warranty or representation to any Bank and shall not be
responsible to any Bank for any recitals, statements, warranties or
representations, whether written or oral, made in or in connection with this
Agreement or the other Loan Documents; (e) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
obligations, covenants or conditions of this Agreement on the part of any
Borrower or to inspect the property (including, without limitation, any books
and records) of any Borrower; (f) shall not be responsible to any Bank for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document or other support or security
(including the validity, priority or perfection of any Lien), or any other
document furnished in connection with any of the foregoing; and (g) shall incur
no liability under or in respect of this Agreement or any other Loan Document by
action upon any written notice, statement, certificate, order, telephone
message, facsimile or other document which the Administrative Agent believes in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person.
38
SECTION 11.3 Administrative Agent and Affiliates . With
respect to the Loans made by it, Chase shall have the same rights and powers
under this Agreement and the other Loan Documents as any other Bank and may
exercise the same as though it were not the Administrative Agent; and the term
"Bank" or "Banks" shall, unless otherwise expressly indicated, include Chase in
its individual capacity. Chase and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, any Borrower, Conseco and any of its Subsidiaries and any
Person who may do business with or own securities of Conseco or any such
Subsidiary, all as if Chase was not the Administrative Agent and without any
duty to account therefor to the Banks.
SECTION 11.4 Bank Credit Decision . Each Bank acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Bank and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 11.5 Indemnification . The Banks agree to indemnify
the Administrative Agent and each Agent Related Person (to the extent not
reimbursed by the Borrower), ratably according to their Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or assessed against the
Administrative Agent in any way relating to or arising out of this Agreement,
the other Loan Documents, the Other D&O Agreements or the Existing Litigation,
or any action taken or omitted by the Administrative Agent under this Agreement,
the other Loan Documents, the Other D&O Agreements or the Existing Litigation;
provided, that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limiting any of the foregoing, each
Bank agrees to reimburse the Administrative Agent promptly upon demand for their
Percentage of any expenses (including reasonable counsel fees) incurred by the
Administrative Agent (in its individual capacity as agent or in its capacity as
representative of the Banks) in connection with the preparation, execution,
delivery, administration, modification, amendment, waiver or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under this Agreement, the other
Loan Documents, the Other D&O Agreements or the Existing Litigation, to the
extent that the Administrative Agent is not reimbursed for such expenses by the
Borrowers or Conseco. All obligations provided for in this Section 11.5 shall
survive termination of this Agreement.
SECTION 11.6 Successor Agent . The Administrative Agent may,
and at the request of the Required Banks shall, resign as Administrative Agent
upon 30 days' notice to the Banks. If the Administrative Agent resigns under
this Agreement, the Required Banks shall appoint from among the Banks a
successor agent for the Banks which successor agent shall be approved by a
majority of the Borrowers (which consent shall not be unreasonably withheld). If
no successor agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Banks
39
and the Borrowers, a successor agent from among the Banks. Upon the acceptance
of its appointment as successor agent hereunder, such successor agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent and the term "Administrative Agent" shall mean such successor agent and
the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 11 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement. If no
successor agent has accepted appointment as Administrative Agent by the date
which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Banks shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Banks
appoint a successor agent as provided for above.
SECTION 12.ASSIGNMENTS AND PARTICIPATIONS
SECTION 12.1 Assignments . (a) Each Bank shall have the right
at any time to assign with the consent of Conseco (on behalf of the Borrowers)
and the Administrative Agent (which consent, in each case, will not unreasonably
be withheld), to any Eligible Assignee, all or any part of such Bank's rights
and obligations under this Agreement and each other Loan Document including its
rights in respect of its Loans and Notes, if any; provided, however, that no
such consent of Conseco (on behalf of the Borrowers) shall be required where any
Event of Default as to Conseco or CIHC has occurred and shall be continuing. Any
such assignment shall be pursuant to an assignment agreement, substantially in
the form of Exhibit H (an "Assignment Agreement"), duly executed by such Bank
and the Eligible Assignee, and acknowledged by the Administrative Agent.
Notwithstanding the foregoing, each Bank may make assignments to its Affiliates
or to any Federal Reserve Bank without obtaining consent of the Administrative
Agent.
(b) Each assignment shall be pro rata with respect to all
rights and obligations of the assigning Bank including the Loans and the Notes,
if any. Each assignment shall be in an amount equal to or in excess of
$5,000,000 (except for assignments of the entire unpaid balance, if less than
$5,000,000, of the Loans of a Bank or assignments to existing Banks). In the
case of any such assignment, upon the fulfillment of the conditions in Section
12.1(c), this Agreement shall be deemed to be amended to the extent, and only to
the extent, necessary to reflect the addition of such Eligible Assignee, and
such Eligible Assignee shall for all purposes be a Bank party hereto and shall
have, to the extent of such assignment, the same rights and obligations as a
Bank hereunder.
(c) An assignment shall become effective hereunder when all of
the following shall have occurred:
(i) the Assignment Agreement shall have been executed by the
assigning Bank and the Eligible Assignee,
(ii) the Assignment Agreement shall have been acknowledged by
the Administrative Agent and, where applicable, by Conseco (on behalf
of the Borrowers),
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(iii) either the assigning Bank or the Eligible Assignee shall
have paid a processing fee of $3,000 to the Administrative Agent for
its own account; provided that the Eligible Assignee shall be solely
responsible for such processing fee with respect to any assignment
pursuant to Sections 5.8 and 13.2, and
(iv) the assigning Bank and the Administrative Agent shall
have agreed upon a date upon which such assignment shall become
effective. Upon such assignment becoming effective, the Administrative
Agent shall forward all payments of interest, principal, fees and other
amounts that would have been made to the assigning Bank, in proportion
to the percentage of the assigning Bank's rights transferred, to the
Eligible Assignee.
(d) Upon the effectiveness of any assignment, the assigning
Bank shall be relieved from its obligations hereunder to the extent of the
obligations so assigned (except to the extent, if any, that any Borrower, any
other Bank or the Administrative Agent have rights against such assigning Bank
as a result of any default by such Bank under this Agreement). Promptly
following the effectiveness of each assignment, the Administrative Agent shall
furnish to the Borrowers and each Bank a revised Schedule 2.1, revised to
reflect such assignment.
SECTION 12.2 Participations . (a) Each Bank may grant
participations in all or any part of its Loans and, if applicable, the Notes to
any commercial bank or other financial institution (other than insurance
companies and Affiliates thereof unless consented to by Conseco). A participant
shall not have any rights under this Agreement or any other document delivered
in connection herewith (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such Bank
in favor of the participant relating thereto, which agreement with respect to
such participation shall not restrict such Bank's ability to make any
modification, amendment or waiver to this Agreement without the consent of the
participant except that the consent of such participant may be required in
connection with matters requiring the consent of all of the Banks under Section
13.1). Notwithstanding the foregoing, each participant shall have the rights of
a Bank pursuant to Section 4.3. All amounts payable by any Borrower under this
Agreement shall be determined as if the Bank had not sold such participation. In
the event of any such sale by a Bank of participating interests to a
participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any obligation for all purposes
under this Agreement, and the Borrowers and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement.
(b) Limitation of Rights of any Participant. Notwithstanding
anything in the foregoing to the contrary,
(i) no participant shall have any direct rights hereunder,
(ii) the Borrowers, the Administrative Agent and the Banks,
other than the selling Bank, shall deal solely with the selling Bank
and shall not be obligated to extend any rights or make any payment to,
or seek any consent of, the participant,
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(iii) no participation shall relieve the selling Bank of any
of its other obligations hereunder and such Bank shall remain solely
responsible for the performance thereof, and
(iv) no participant, other than an affiliate of the selling
Bank, shall be entitled to require such Bank to take or omit to take
any action hereunder, except that such Bank may agree with such
participant that such Bank will not, without participant's consent,
take any action which requires the consent of all of the Banks under
Section 13.1.
SECTION 12.3 Disclosure of Information . Each Borrower
authorizes each Bank to disclose to any participant, assignee or Eligible
Assignee (each, a "Transferee") and any prospective Transferee any and all
financial and other information in such Bank's possession concerning such
Borrower, Conseco and its Subsidiaries which has been delivered to such Bank by
such Borrower and/or Conseco in connection with such Bank's credit evaluation of
such Borrower prior to entering into this Agreement or which has been delivered
to such Bank by such Borrower and/or Conseco pursuant to this Agreement;
provided, however, that each Bank, participant, assignee and Eligible Assignee
shall execute a confidentiality agreement substantially in the form of Exhibit G
in which it agrees that it shall hold all non-public, confidential and
proprietary information obtained pursuant to the requirements of this Agreement
in accordance with safe and sound banking and business practices and may make
disclosure reasonably required by any bona fide participant, assignee or
Eligible Assignee (or potential participant, assignee or Eligible Assignee) in
connection with the contemplated transfer of any portion of the Loans or as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process. For the purposes of this Section 12.3, by execution
of this Agreement each of the Banks shall be deemed to have agreed to and
executed the confidentiality agreement contained in Exhibit G.
SECTION 12.4 Foreign Transferees . If, pursuant to this
Section 12, any interest in this Agreement or any Loans or the Note is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any state thereof or upon the
request of the Administrative Agent, the transferor Bank shall cause such
Transferee (other than any participant), and may cause any participant,
concurrently with the effectiveness of such transfer,
(a) to represent to the transferor Bank (for the benefit of
the transferor Bank, the Administrative Agent and the Borrowers) that
under applicable law and treaties no Taxes will be required to be
withheld by the Administrative Agent,
(b) to represent to the Borrowers or the transferor Bank that
under applicable law and treaties no Taxes will be required to be
withheld with respect to any payments to be made to such Transferee in
respect of the Loans or, if applicable, the Notes,
(c) to furnish to the transferor Bank, the Administrative
Agent and the Borrowers either U.S. Internal Revenue Service Form
W-BEN, Form W-ECI or Form W- 8IMY (wherein such Transferee claims
entitlement to complete exemption from U.S. federal withholding tax on
all interest payments hereunder), and
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(d) to agree (for the benefit of the transferor Bank, the
Administrative Agent and the Borrowers) to provide the transferor Bank,
the Administrative Agent and the Borrowers a new Form W-BEN, Form W-ECI
or Form W-8IMY upon the obsolescence of any previously delivered form
and comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by such
Transferee, and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.
SECTION 13.MISCELLANEOUS
SECTION 13.1 Waivers and Amendments . Except as otherwise
specified herein or therein, the provisions of this Agreement and of each other
Loan Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by each
Borrower directly affected by such amendment, modification or waiver and the
Required Banks; provided, that no such amendment, modification or waiver:
(a) which would modify any requirement hereunder that any
particular action be taken by all Banks or by the Required Banks, shall
be effective without the consent of each Bank;
(b) which would modify this Section 13.1, change the
definition of "Required Banks," change any Percentage for any Bank
(except pursuant to an Assignment Agreement), reduce any fees, extend
the maturity date of any Loan, reduce any rate of interest payable on
the Loans or subject any Bank to any additional obligations, shall be
effective without the consent of each Bank;
(c) which would permit the release of all or any material
portion of the Direct Collateral or Indirect Collateral or the
collateral under the Collateral Agreement or the subordination of any
lien or security interest benefiting the Banks in the collateral under
the Collateral Agreement to any other lien or security interest, or the
release or termination of Conseco's or CIHC's obligations in the
aggregate, or any material obligation individually, under the Conseco
Guaranty or the CIHC Guaranty, shall be effective without the consent
of each Bank; provided, however, that such consent shall not be
required for the termination of the CIHC Guaranty pursuant to Section
5.14 thereof;
(d) which would extend the due date for, or reduce the amount
of, any payment or prepayment of principal of or interest on the Loans,
shall be effective without the consent of each Bank;
(e) which would affect adversely the interests, rights or
obligations of the Administrative Agent (in such capacity) other than
removal in accordance with Section 11.6, shall be effective without
consent of the Administrative Agent; or
(f) which would increase the aggregate principal amount of the
indebtedness (including the Loans) sharing in the collateral under the
Collateral Agreement pursuant to
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the Collateral Sharing Agreement or otherwise to more than $600,000,000
shall be effective without the consent of each Bank;
provided,further that, consistent with (but not in limitation of) the
foregoing, (y) at any time that Liabilities of a particular Borrower
shall be due and owing, but unpaid, amendments, modifications and
waivers may be made applicable to such Borrower without the approval of
other Borrowers (but with the approval of each Bank) and amendments,
modifications and waivers may be made applicable to other Borrowers
without such approval of such Borrower (but with the approval of each
Bank) and (z) any guarantor and the Administrative Agent may enter into
an amendment modification or waiver of such guarantor's or guaranty
without the consent of any Borrower.
The Administrative Agent shall not consent to any amendment,
modification or waiver of the Collateral Agreement or the Collateral
Sharing Agreement except with the consent of the Required Banks or, if
such amendment, modification or waiver is of a type described in any of
clauses (a) through (f) above, each Bank.
SECTION 13.2 Failure to Consent . If any Bank shall fail to
consent to any amendment, modification or waiver described in Section 13.1 (any
such Bank being hereinafter referred to as a "Non-Consenting Bank") then in such
case, Conseco (on behalf of the Borrowers) may, upon at least five (5) Business
Days' written notice to the Administrative Agent and such Non-Consenting Bank,
designate a substitute lender (a "Substitute Bank") acceptable to the
Administrative Agent in its sole discretion, to which such Non-Consenting Bank
shall assign all (but not less than all) of its rights and obligations under the
Loans hereunder. Upon any assignment by any Bank pursuant to this Section 13.2
becoming effective, the Substitute Bank shall thereupon be deemed to be a "Bank"
for all purposes of this Agreement and the assigning Bank shall thereupon cease
to be a "Bank" for all purposes of this Agreement and shall have no further
rights or obligations hereunder (other than pursuant to Sections 5.1, 5.2, 5.5,
11.5 and 13.4 hereof, and Sections 7.1 and 7.2 of the Conseco Guaranty or
Section 5.1 of the CIHC Guaranty while such Non-Consenting Bank was a Bank);
provided, that all Liabilities (except Liabilities which by the terms hereof
survive the payment in full of the Loans and termination of this Agreement) due
and payable to the Non-Consenting Bank shall be paid in full as of the date of
such assignment. Notwithstanding the foregoing, in the event that in connection
with any amendment, modification or waiver more than one Bank is a
Non-Consenting Bank, the Borrowers may not require one Bank to assign its rights
and obligations to a Substitute Bank unless all Non-Consenting Banks are
required to make such an assignment. Notwithstanding any Non-Consenting Bank's
failure or refusal to assign its rights, obligations and Loans under this
Section 13.2, the Non-Consenting Bank shall cease to be a "Bank" for all
purposes of this Agreement and the Substitute Bank substituted therefor upon
payment to the Non-Consenting Bank by the Substitute Bank of all amounts set
forth in this Section 13.2 without any further action of the Non-Consenting
Bank.
SECTION 13.3 Notices . All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile or similar writing) and shall be given to such party at its
address, facsimile or telex number set forth on the signature or acknowledgment
pages hereof or such other address, facsimile or telex number as such party may
hereafter specify for the purpose by written notice to the Administrative Agent,
44
the Borrowers and Conseco. Each such notice, request or other communication
shall be effective (a) if given by facsimile or telex, when such facsimile or
telex is transmitted to the facsimile or telex number specified in this Section
13.3 and, in the case of telex or facsimile, the appropriate answerback or
confirmation is received, (b) if given by mail, seventy-two (72) hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (c) if given by any other means, when delivered at the
address specified in this Section 13.3, provided, that notices to the
Administrative Agent under Sections 2, 3, 4 and 10 shall not be effective until
received by the Administrative Agent.
SECTION 13.4 Indemnity . The Borrowers agree, jointly and
severally, to indemnify each Bank, its Affiliates and each of their respective
directors, officers, employees, persons controlling or controlled by any of them
or their respective agents, consultants, attorneys and advisors (the
"Indemnified Parties") and hold each Indemnified Party harmless from and against
any and all liabilities, losses, claims, damages, costs and expenses of any kind
to which any of the Indemnified Parties may become subject, whether directly or
indirectly (including, without limitation, the reasonable fees and disbursements
of counsel for any Indemnified Party), relating to or arising out of this
Agreement, the other Loan Documents, the Other D&O Agreements, the Existing
Litigation or any actual or proposed use of the proceeds of the Loans hereunder;
provided, that no Indemnified Party shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as determined by a
court of competent jurisdiction. All obligations of the Borrowers provided for
in this Section 13.4 shall survive termination of this Agreement.
SECTION 13.5 D&O Agreements. Except to the extent the Loans
hereunder shall have refinanced Existing Loans, the D&O Agreements (including,
without limitation, the Existing Credit Agreement) shall remain in full force
and effect and shall not be superseded by this Agreement, and consistent with
(but not in limitation of) the foregoing, nothing contained herein is intended
in any manner whatsoever to amend, modify, or otherwise alter the provisions of
the Existing Credit Agreement (or of any related loan document) as to any
borrower thereunder who is not a party to this Agreement. Where the Loans have
refinanced Existing Loans, the Existing Credit Agreement shall have been
superseded by this Agreement as to the Borrowers, but only as to the Borrowers
(and specifically, not as to the other borrowers under the Existing Credit
Agreement who are not parties to this Agreement); provided, however, that
provisions of the Existing Credit Agreement that expressly survive the payment
in full of the Existing Loans shall continue to survive; provided further,
however, in the event of any conflict between the provisions of this Agreement
and the surviving provisions of the Existing Credit Agreement, the provisions of
this Agreement shall control as to the Borrowers.
SECTION 13.6 Subsidiary References . The provisions of this
Agreement relating to Subsidiaries shall apply only during such times as a
Person referenced in such a provision has one or more Subsidiaries.
SECTION 13.7 Captions . Section captions used in this
Agreement are for convenience only, and shall not affect the construction of
this Agreement.
SECTION 13.8 GOVERNING LAW . THIS AGREEMENT, THE NOTES, IF
ANY, AND THE LOANS SHALL BE A CONTRACT MADE UNDER AND
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GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. ALL OBLIGATIONS OF THE BORROWERS
AND RIGHTS OF THE ADMINISTRATIVE AGENT AND THE BANKS IN RESPECT OF THE
LIABILITIES EXPRESSED HEREIN OR IN THE OTHER LOAN DOCUMENTS SHALL BE IN ADDITION
TO AND NOT IN LIMITATION OF THOSE PROVIDED BY APPLICABLE LAW.
SECTION 13.9 Counterparts . This Agreement may be executed in
any number of counterparts and by the different parties on separate counterparts
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same agreement. When
counterparts executed by all the parties shall have been lodged with the
Administrative Agent (or, in the case of any Bank as to which an executed
counterpart shall not have been so lodged, the Administrative Agent shall have
received telegraphic, facsimile, telex or other written confirmation from such
Bank of execution of a counterpart hereof by such Bank), this Agreement shall
become effective as of the Closing Date hereof, and at such time the
Administrative Agent shall notify the Borrowers and each Bank.
SECTION 13.10 SUBMISSION TO JURISDICTION; WAIVER OF VENUE .
THE ADMINISTRATIVE AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY SUBMIT
TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, AND THE ADMINISTRATIVE
AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. THE ADMINISTRATIVE
AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION IT OR THEY MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE IN ANY ACTION OR PROCEEDING (WHETHER BROUGHT BY ANY
BORROWER, THE ADMINISTRATIVE AGENT, ANY BANK, OR OTHERWISE) IN ANY COURT
HEREINABOVE SPECIFIED IN THIS SECTION 13.10 AS WELL AS ANY RIGHT IT OR THEY MAY
NOW OR HEREAFTER HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED,
TO ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. THE
ADMINISTRATIVE AGENT, EACH BANK AND EACH BORROWER AGREE THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
SECTION 13.11 Successors and Assigns . This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that the Borrowers may not
assign or transfer their rights or obligations under this Agreement or any other
Loan Document without the prior written consent of all Banks, and the rights of
the Banks to make assignments or grant participations are subject to the
provisions of Section 12.
46
SECTION 13.12 Power of Attorney. Each Borrower hereby
irrevocably constitutes and appoints Conseco as such Borrower's
attorney-in-fact, with full power of substitution and transfer, to take any and
all actions, including, without limitation, giving consents, notices, and
approvals, specified to be taken by Conseco under this Agreement and to execute
all documents in furtherance thereof. The power of attorney hereby granted shall
be coupled with an interest and shall be irrevocable until payment in full of
the Loans.
SECTION 13.13 No Waiver; Cumulative Remedies . No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Bank, any right, remedy, power or privilege under this Agreement, any other
Loan Document or any of the other D&O Agreements, and/or applicable law shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
Consistent with (but not in limitation of) the foregoing, the rights, powers,
and/or remedies provided in this Agreement or any other Loan Document shall be
cumulative and shall not preclude the assertion or exercise of any other rights
or remedies available under law, in equity or otherwise except solely with
respect to Conseco and CIHC, to the extent expressly set forth in Sections 2.1
and 6.1 of the Conseco Guaranty.
SECTION 13.14 WAIVER OF JURY TRIAL . EACH BORROWER, THE
ADMINISTRATIVE AGENT AND EACH BANK HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR ANY OTHER DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH
ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO
THIS AGREEMENT.
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