Exhibit 99.5
WAIVER NO. 2 TO
(1999 D&O LOANS)
WAIVER NO. 2, dated as of September 8, 2002 (this "Waiver"), to the
Guaranty dated as of November 22, 2000 (as heretofore amended, the "Conseco
Guaranty") between Conseco, Inc., an Indiana corporation ("Conseco"), and
JPMorgan Chase Bank, as Administrative Agent (the "Agent"), and to the
Agreement, dated as of September 22, 2000, Re 1999 D&O Loans (the "Agreement")
among Conseco, various financial institutions signatory thereto, and the Agent,
entered into in connection with the Credit Agreement dated as of November 22,
2000 (as heretofore amended, the "Credit Agreement") among the borrowers party
thereto (the "Borrowers"), the various financial institutions signatory thereto
(the "Banks") and the Agent relating to the refinancing of certain loans under a
Termination and Replacement Agreement dated as of May 30, 2000 among the
Borrowers, the Banks and the Agent.
W I T N E S S E T H :
WHEREAS, Conseco has asked the Agent and the Banks, and the Agent and the
Banks party hereto are willing, on the terms and conditions set forth below and
for a limited period only, to waive compliance with certain provisions of, and
to waive certain defaults under, the Conseco Guaranty and the Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 . Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Conseco Guaranty
has the meaning assigned to such term in the Conseco Guaranty (including by
reference to the Credit Agreement).
SECTION 2 . Waivers. (a) Debt to Total Capitalization Ratio. The Agent and
the Banks party hereto hereby agree to waive compliance by Conseco, on an
interim basis until Waiver Termination (as defined below) only, with the
requirements set forth in Section 4.13 of the Appendix (incorporated by
reference into the Conseco Guaranty and into the Agreement) that the Debt to
Total Capitalization Ratio (i) as of June 30, 2002 not be greater than 0.400:1.0
and (ii) as of September 30, 2002 not be greater than 0.375:1.0, and waive any
default that may have occurred or may occur solely as a result of such
noncompliance.
(b) Cross-Default. The Agent and the Banks party hereto hereby agree to
waive, on an interim basis until Waiver Termination only, any default that may
occur pursuant to Section 5.01(e) of the Appendix (incorporated by reference
into the Conseco Guaranty and into the Agreement) solely as a result of the
failure by
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Conseco or CIHC (as guarantor of Conseco's obligations with respect to the New
Notes (as defined in Schedule I)) to make the interest payment in respect of any
Indebtedness set forth on Schedule I hereto on the payment date set forth with
respect to such Indebtedness on such Schedule or within any applicable grace or
notice period (and any cross-default under any other Indebtedness solely as a
result of such failure).
(c) Period of Effectiveness. Each of the foregoing waivers shall be
effective solely during the period commencing on the effectiveness of such
waiver, determined in accordance with Section 7 hereto, and ending at Waiver
Termination, at which time the foregoing waivers shall terminate and be of no
further force or effect. "Waiver Termination" means the earliest to occur of:
(i) 12:01 A.M. (New York time) on October 17, 2002;
(ii) the commencement by any holder of Indebtedness or other obligations
(including, without limitation, any Indebtedness or other obligations pursuant
to any agreement or instrument listed on Schedule I, II or III hereto or any
guaranty thereof) of Conseco, any of its Subsidiaries or any special purpose
entity established in connection with the transactions contemplated by any of
the agreements referred to in Schedule II hereto (each, an "SPE") (or any
indenture trustee or agent therefor) of the exercise of any remedy (including,
without limitation, acceleration or the making of a demand under any guaranty
entered into in connection therewith) or the taking of any other action in
furtherance of collection or enforcement of any claim or Lien against Conseco,
any of its Subsidiaries or any SPE or any of their respective assets; provided
that, (A) solely in the case of agreements or instruments listed in Schedule II,
the foregoing shall result in Waiver Termination only if Conseco fails to
receive by the close of business on the second Business Day after occurrence of
such event a written notification from the Required Banks stating that the
waivers granted in this Section 2 will not terminate as a result of such event
and (B) in the case of Indebtedness or other obligations arising under
agreements or instruments not listed on Schedule I, II or III hereto, the
foregoing shall result in Waiver Termination only if the aggregate principal
amount of Indebtedness or other obligations outstanding under such agreements or
instruments (including committed or available amounts thereunder) exceeds
$10,000,000;
(iii) the making by Conseco or any of its Subsidiaries (other than Conseco
Finance or any of its Subsidiaries), directly or indirectly, of any Investment
in Conseco Finance or any of its Subsidiaries after the date hereof (other than
Investments in an aggregate amount not exceeding $6,000,000 in respect of
products and services provided in the ordinary course of business and consistent
with past practices), unless, at least five Business Days prior to making such
Investment, Conseco shall have delivered written notification thereof to the
Agent setting forth the name of the entity making such Investment, the date on
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which such Investment is to be made, the amount and form of such Investment and,
in reasonable detail, the reasons for making such Investment; and
(iv) receipt by Conseco of a written notice from the Required Banks
advising Conseco that they have determined (in their sole discretion) to
terminate the waivers granted in this Section 2.
(d) Limited Effect. Except as provided in subsections (a) and (b) above,
this Section 2 shall not operate as a waiver of any right, remedy, power or
privilege of the Banks under the Conseco Guaranty or the Agreement or of any
other term or condition of the Conseco Guaranty or the Agreement. Without
limiting the generality of the foregoing, upon Waiver Termination, the Banks or
the Agent may proceed to exercise any and all of their respective rights and
remedies, including, without limitation, their rights and remedies in connection
with any default referred to in this Section 2.
SECTION 3 . Waiver Consideration. Conseco and CIHC each acknowledges and
agrees that, if the waivers requested hereunder were not granted, the Agent
would be entitled to make a demand under Section 3.2 of the Credit Agreement
upon each Borrower (which demand, if made, would result in interest accruing on
Loans outstanding under the Credit Agreement at the default interest rate from
time to time in effect as determined pursuant to Section 3.2 of the Credit
Agreement (the "Default Rate")). As consideration for the waivers granted
hereunder and in light of the right of the Agent to make such demand in the
absence of such waivers, Conseco and CIHC agree jointly and severally to pay,
and shall pay, to the Agent, for the pro rata benefit of the Banks, in
immediately available funds, on the next Interest Payment Date and, thereafter,
on the last Business Day of each calendar month (commencing November 2002) (each
such date, a "Payment Date"), an amount (the "Waiver Consideration") equal to
the difference between (i) the amount of interest that would have accrued on the
Loans outstanding under the Credit Agreement during the period commencing (x) in
the case of the first such payment, on the date hereof and (y) in the case of
all subsequent payments, on the previous Payment Date, and in each case ending
on the next Payment Date, if such interest was accruing at and was calculated at
the Default Rate and (ii) the amount of interest actually accrued on the Loans
outstanding under the Credit Agreement during the period set forth in clause
(i). Any amount of the Waiver Consideration not paid when due shall accrue
interest, which interest shall compound on each Payment Date, until paid at the
Default Rate (computed for the actual number of days elapsed on the basis of a
360-day year). Conseco and CIHC each agrees that (i) nothing contained herein
shall limit the right, if any, of the Agent or the Banks to make a demand upon
or exercise other remedies against any Borrower under Section 3.2 of the Credit
Agreement or otherwise and (ii) Conseco's and CIHC's obligations under this
Section 3 do not in any way limit their obligations under the Conseco
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Guaranty or the CIHC Guaranty, as applicable, and shall survive the termination
of this Waiver.
SECTION 4 . Representations Correct; No Default. Conseco represents and
warrants that, except as expressly waived hereby, on and as of the date hereof
(i) the representations and warranties contained in the Conseco Guaranty are
true as though made on and as of the date hereof (except to the extent a
representation or warranty references a specific date, in which case, such
representation or warranty is true as of such date) and (ii) no default has
occurred and is continuing.
SECTION 5 . Governing Law. This Waiver shall be governed by and construed
in accordance with the laws of Illinois.
SECTION 6 . Counterparts. This Waiver may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 7 . Effectiveness. This Waiver shall become effective (and shall be
binding on all Banks) (i) as of the date hereof with respect to the waivers
provided in Sections 2(a)(ii) and 2(b) hereof and (ii) as of June 30, 2002 with
respect to the waiver provided in Section 2(a)(i) hereof, in each case when the
following conditions are satisfied:
(i) the Agent shall have received from each of Conseco, CIHC and the
Required Banks a counterpart hereof signed by such party or facsimile or other
written confirmation (in form satisfactory to the Agent) that such party has
signed a counterpart hereof; and
(ii) the requisite lenders under each of (a) the Agreement dated September
22, 2000, Re: 1997 D&O Loans, (b) the Agreement dated September 22, 2000, Re:
1998 D&O Loans, and (c) the Revolving Credit Agreement, shall have granted
waivers thereunder on terms substantially similar to those contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly
executed as of the date first above written.
CONSECO, INC.
By:/s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Executive Vice President,
General Counsel and Secretary
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JPMORGAN CHASE BANK, as
Administrative Agent and as a Bank
By:/s/ Xxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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BANK OF AMERICA, N.A.
By:/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
Acknowledged and agreed by:
CIHC, INCORPORATED
By:/s/ Xxxx X. Xxxxx
------------------------
Name: Xxxx X. Xxxxx
Title: Chief Executive Officer
SCHEDULE I
Indebtedness
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Indenture Interest Payment Date
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"Old" 8.75% Senior Notes due February 2004 issued pursuant to the Senior Indenture August 9, 2002
dated November 13, 1997
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"New" 8.75% Guaranteed Senior Notes due August 2006 issued pursuant to the First August 9, 2002
Senior Indenture dated April 24, 2002 (the "New 8.75% Notes")
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"Old" 6.4% Senior Notes due February 2003 issued pursuant to the Senior Indenture August 12, 2002
dated November 13, 1997
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"New" 6.4% Guaranteed Senior Notes due February 2004 issued pursuant to the First August 12, 2002
Senior Indenture dated April 24, 2002 (the "New 6.4% Notes", and together with
the New 8.75% Notes, the "New Notes")
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8.125% Senior Notes due February 2003 issued pursuant to the Senior Indenture dated August 15, 2002
February 18, 1993
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6.75% FELINE PRIDES due February 2003 August 16, 2002
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SCHEDULE II
CFC Facilities
1. Third Amended and Restated Master Repurchase Agreement between Xxxxxxx
Xxxxx Mortgage Capital Inc. and Green Tree Finance Corp. - Three dated
April 5, 2001, and related documents entered into in connection
therewith.
2. Second Amended and Restated Master Repurchase Agreement between Xxxxxx
Commercial Paper Inc. and Green Tree Finance Corp. - Five dated January
30, 2002, and related documents entered into in connection therewith.
3. Asset Assignment Agreement by and between Xxxxxx Commercial Paper Inc.
and Green Tree Residual Finance Corp. I dated February 13, 1998, and
related documents entered into in connection therewith.
4. Master Repurchase Agreement between Green Tree Residual Finance Corp I
and Xxxxxx Brothers Inc., and related documents entered into in
connection therewith.
5. Master Repurchase Agreement between Credit Suisse First Boston Mortgage
Capital LLC and Green Tree Financial Corp. dated March 26, 1999, and
related documents entered into in connection therewith.
6. Master Repurchase Agreement between Deutsche Banc Sharps Xxxxxx Inc.,
Aspen Funding Corp. and Conseco Financing SP Corp. - Seven dated May 4,
2001, and related documents entered into in connection therewith.
7. Credit Agreement between Conseco Finance Corp. and U.S. Bank National
Association dated as of December 27, 2000, and related documents entered
into in connection therewith.
SCHEDULE III
Indebtedness (with cross-defaults)
1. 10.5% Senior Notes due December 2004 issued pursuant to the First
Supplemental Indenture dated August 31, 1995 (to the Indenture dated
December 15, 1994).
2. "Old" 10.75% Senior Notes due June 2008 issued pursuant to the First
Senior Supplemental Indenture dated June 29, 2001 (to the Senior
Indenture dated November 13, 1997).
3. "New" 10.75% Guaranteed Notes due June 2009 issued pursuant to the First
Senior Supplemental Indenture dated April 24, 2002 (to the Second Senior
Indenture dated April 24, 2002).
