FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (the "First Amendment") is entered
into by and between NAL ACCEPTANCE CORPORATION, a Florida corporation (the
"Borrower"), and CONSECO PRIVATE CAPITAL GROUP, INC., an Indiana corporation
(the "Lender").
Recitals
A. Borrower and Lender are parties to a Credit Agreement dated June 23,
1997 (the "Credit Agreement").
B. The Borrower is facing a material liquidity issue, and desires immediate
short term financing from the Lender by increasing the amount of the Loan under
the Credit Agreement.
C. The Lender desires to make such additional loan, provided that certain
features of the convertible debentures of Borrower's Parent Corporation be
modified in order for Lender, or its affiliates, to consider ownership in the
Parent Corporation without being subject to market fluctuations, all as more
specifically provided hereinafter.
D. The terms used in this First Amendment with their initial letters
capitalized and which are not defined herein shall have the meanings ascribed to
them in the Credit Agreement.
Amendment
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants contained herein, and each act done pursuant thereto, the parties
hereby agree as follows:
1. The following definitions hereby supersede and replace the corresponding
definitions set forth in Section 1(b) of the Credit Agreement, as follows:
"Loan" means, collectively, unless the context otherwise requires, the
Original Loan in the amount of $5,000,000 advanced by the Lender to the
Borrower pursuant to Section 2(a)(i) hereof and the Working Capital Loan in
an amount not to exceed $5,000,000 advanced by Lender to Borrower pursuant
to Section 2(a)(ii) hereof.
"Maturity" with respect to the Original Loan means the earlier of (i)
December 31, 1997, (ii) the date of an Equity Infusion (other than by
Lender or its Affiliates), or (iii) upon a Change in Control of the Parent
Corporation; at which time all Advances under the Original Loan shall be
due and payable; and with respect to the Working Capital Loan means October
1, 1997.
"Note" means, collectively, the promissory notes evidencing the Loan
as used in Section 2(a)(i)(C) and Section 2(a)(ii)(C), and any other
promissory note made by Borrower payable to Lender as may be outstanding
from time to time."
2. The following definition is hereby added to and included in Section 1(b)
of the Credit Agreement in alphabetical order within such section:
""Filing Approval" means the expiration of the waiting period under
the Xxxx-Xxxxx-Xxxxxx Act with respect to a filing made by Conseco, Inc.
concerning its acquisition of control of the Parent Corporation.
"Original Loan" means the Loan in the amount of $5,000,000 advanced by
the Lender to the Borrower pursuant to Section 2(a)(i) hereof.
"Working Capital Loan" shall be the loan advanced to Borrower by
Lender pursuant to Section 2(a)(ii) hereof."
3. Section 2(a)(ii) is hereby added to the Credit Agreement as follows:
"(ii) Working Capital Loan. From the date of the First Amendment and
until the close of business on the date of the Filing Approval, the Lender
will make Advances in addition to the Original Loan from time to time to
the Borrower, in amounts not exceeding the aggregate principal amount at
any time outstanding of Five Million Dollars ($5,000,000), upon the terms
and conditions hereinafter stated.
The making of the Advances shall be subject to the further provisions
of this Section 2, provided that Advances under the working Capital Loan
shall not be subject to the conditions of lending stated in Section 7 and
the Officer's Certificate may be subject to Events of Default caused by the
financial condition of the Borrower. Each Advance shall be on the terms and
subject to the conditions hereinafter stated. After the Filing Approval,
the Lender shall not be required to make any further Advances under the
Working Capital Loan.
(A) Interest. The Working Capital Loan shall bear the rate of
interest on the Loan set forth in Section 2(a)(i)(A) of this Credit
Agreement. After maturity, whether by acceleration or upon Maturity as
hereinafter provided, until paid in full, or when and so long as there
shall exist any uncured Default, the Working Capital Loan shall bear
interest at a rate equal to three percent (3%) per annum of the
otherwise applicable rate (calculated on the basis that an entire
year's interest is earned in 360 days). Interest shall be due and
payable at Maturity on October 1, 1997.
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(B) Maturity. The Working Capital Loan and all accrued interest
thereon shall be payable in full immediately upon Maturity on October
1, 1997.
(C) Method of Borrowing. The obligations of the Borrower to repay
the Working Capital Loan shall be evidenced by a promissory note
attached as Exhibit "C-1" and made a part hereof. The principal amount
of the Working Capital Loan outstanding from time to time shall be
determined by reference to the books and records of the Lender and all
payments by Borrower on account of the Working Capital Loan shall be
recorded. Such books and records shall be deemed prima facie to be
correct as to such matters absent manifest error. The principal may be
prepaid in part or in whole without premium or penalty, provided that
such prepayments shall not be re-advanced by Lender.
(D) Use of Proceeds. The Advances under the Working Capital Loan
may only be used by the Borrower to pay working capital expenditures
necessary to maintain the operations of the Borrower in the normal
course of business, such as payroll expenses, taxes, rent, payments to
repossession contractors and utilities, and any other expenses must be
approved by the Lender. The Borrower shall provide the Lender with
such reports requested by Lender showing the use of Advances."
4. The Borrower is herewith entering into the Note in the form attached
hereto as Exhibit "C-1".
5. The following Section 2(f) is hereby added to the Credit Agreement
immediately following Section 2(e) therein:
"(f) Extensions of Loan. If the Filing Approval is obtained
prior to the Maturity of the Working Capital Loan, then the Lender may,
in its sole discretion and at the request of the Borrower, extend the
Maturity of the Original Loan and/or the Working Capital Loan for one
or more successive periods of six (6) months each, provided that any
such extension must be evidenced by a writing executed on behalf of the
Lender. Any such extensions shall be conditioned upon the Borrower
having delivered to the Lender on or prior to the applicable Maturity a
new promissory note acceptable to the Lender to replace the Existing
Note, and any other documents requested by the Lender. Reference is
made to that certain Investment Agreement by and between Conseco, Inc.,
and the Parent Corporation of even date herewith, and the Lender agrees
to the renewal obligations in paragraph 4 therein, subject to the terms
and conditions of such Agreement."
6. This First Amendment and the making of the Working Capital Loan is
conditioned upon the amendment to the 9% Subordinated Convertible Debenture
issued to Beneficial Standard Life Insurance Company in the amount of $5,000,000
and the amendment to
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the 9% Subordinated Convertible Debenture dated April 23, 1996, issued to Great
American Reserve Insurance Company in the amount of $5,000,000, both payable by
the Parent Corporation, to provide that the conversion price therein is equal to
Thirty-Two Cents (32(cent)) per share effective upon the Filing Approval. In
addition, the Parent Corporation shall agree to set the conversion price at
Thirty-Two Cents (32(cent)) per share with respect to convertible debentures
currently held by Xxxxxxx Xxxxx World Income Fund, Inc., and Xxxxxxx Xxxxx
Convertible Fund, Inc., and Thirty Cents (30(cent)) per share for all other
convertible debentures as may be acquired by the Lender or its Affiliates from
other convertible debenture holders, all as shown on Exhibit "I-1" attached
hereto, upon such acquisition and the Filing Approval. The Parent Corporation
and its Board of Directors shall consent to the transfer of such debentures to
the Lender or its Affiliates and any exercise of the conversion rights therein,
and the parties shall promptly file and cooperate in any Xxxx-Xxxxx Xxxxxx
filing deemed necessary by the Lender. The foregoing shall be agreed to by the
Parent Corporation pursuant to the Investment Agreement.
7. The Borrower represents and warrants that to the best of its knowledge,
the projections attached hereto as Exhibit "H-1" are accurate and were prepared
on the basis of assumptions, data, information, tests or other conditions
believed to be valid and accurate.
8. The Working Capital Loan shall be secured by the Loan Documents which
shall remain unamended and in full force and effect. This First Amendment shall
not act to release, diminish or in any manner whatsoever, adversely affect the
Lender's security interest in, to or against any property of the Borrower
created by the Loan Documents, and shall be construed so as to sustain the
validity of such security interest. Except as expressly herein provided, the
Credit Agreement and this First Amendment shall be interpreted wherever possible
in a manner consistent with one another, but in the event of any irreconcilable
inconsistency, this First Amendment shall control.
9. The Borrower shall pay all costs incidental to this First Amendment,
including, but not limited to, attorneys' fees and other legal and documentation
expenses, and any and all other incidental expenses of the Lender in connection
with the amendment of the Credit Agreement as provided herein.
10. This First Amendment is subject to the Lender receiving
contemporaneously (except as indicated below) with the execution of this First
Amendment, the following, each duly executed, dated the date of this First
Amendment and in form and substance satisfactory to Lender:
(a) A certified copy of the resolutions of the Board of Directors of
the Borrower and the Parent Corporation, authorizing the execution,
delivery and performance of this First Amendment and the transactions
contemplated thereby to be furnished by noon August 25, 1997;
(b) Opinion of counsel to the Borrower and Parent Corporation
acceptable to Lender to be furnished by noon August 25, 1997;
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(c) The Note evidencing the Working Capital Loan; and
(d) The Investment Agreement required in paragraph 6 of this
Agreement.
11. This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which shall be deemed one and the same document.
This Agreement and all corresponding Loan Documents may be executed by facsimile
signatures.
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IN WITNESS WHEREOF, the parties have caused this First Amendment to be duly
executed on their behalf all as of the day and year first above written.
NAL ACCEPTANCE CORPORATION
By:
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Printed:
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Title:
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CONSECO PRIVATE CAPITAL GROUP, INC.
By:
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Xxxxxx X. Xxxxx, President
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EXHIBIT "C-1"
EXHIBIT "I-1"
List of Other Convertible Debentureholders
DEBENTURE ISSUE DATE LENDER AMOUNT CONVERSION PRICE
------------ -------------- ------------------- ---------- ----------------
Subordinated Sept. 12, 1996 Xxxxxxx Xxxxx World $2,750,000 32'
Convertible Income Fund, Inc.
Debenture
Subordinated Sept. 12, 1996 Xxxxxxx Xxxxx $2,250,000 32'
Convertible Convertible Fund, Inc.
Debenture
9% Convertible Nov. 30, 1995 Westminster Capital, Inc. $1,250,000 30'
Subordinated (Belzburg)
Debenture
9% Convertible Jan. 29, 1996 Xxxxxxx Xxxx $2,500,000 30'
Subordinated
Debenture
9% Convertible July 14, 1995 Xxxxxxxx Xxxx C/F $1,000,000 30'
Subordinated Penelope & Xxxxxx Xxxx
Debenture (assigned to Xxxxxxx Xxxx)
9% Convertible July 28, 1995 Xxxxxxxx Xxxx C/F $1,000,000 30'
Subordinated Penelope & Xxxxxx Xxxx
Debenture (assigned to Xxxxxxx Xxxx)
9% Convertible Aug. 22, 1995 Xxxxxxxx Xxxx C/F $1,000,000 30'
Subordinated Penelope & Xxxxxx Xxxx
Debenture (assigned to Xxxxxxx Xxxx)
