GUARANTY
Dated as of August 16, 2000,
between
BANKERS LIFE AND CASUALTY COMPANY
as Guarantor,
and
XXXX X. XXXXX
GUARANTY
THIS GUARANTY (this "Guaranty") is entered into as of August 16, 2000
by Bankers Life and Casualty Company, an Illinois insurance corporation
("Guarantor"), in favor of Xxxx X. Xxxxx ("Xxxxx") who is a party to the
Supplemental Retirement 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.
WHEREAS:
A. Pursuant to an Employment Agreement dated June 28, 2000 between
Conseco, Inc., the parent of Guarantor ("Conseco") and Xxxxx (the "Employment
Agreement"), Conseco undertook to cause the Guarantor directly to provide
certain retirement benefits to Xxxxx and/or his spouse; and
B. The parties have determined to satisfy Conseco's obligations to
Xxxxx in respect of such retirement obligations by means of a Supplemental
Retirement Agreement, dated as of the date hereof, executed directly between
Conseco and Xxxxx (the "Supplemental Retirement Agreement") pursuant to which
Conseco agrees to make certain benefit payments to Xxxxx and/or his Surviving
Spouse (as defined in the Supplemental Retirement Agreement) commencing on March
13, 2007; and
C. Guarantor has derived and expects to derive substantial direct and
indirect benefits arising from the Employment Agreement; and the Guarantor has
accordingly agreed to guaranty such benefit payments pursuant to this Agreement;
D. The Board of Directors of Guarantor has determined that it is in
the best interests of Guarantor to execute this Guaranty;
NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, and in order to induce Xxxxx to
enter into the Supplemental Retirement Agreement directly with Conseco,
Guarantor agrees, for the benefit of Xxxxx and his Surviving Spouse and their
respective heirs and beneficiaries, as follows:
ARTICLE I
DEFINITIONS
SECTION 1. Certain Terms. Capitalized terms used herein, unless
otherwise defined herein, shall have the respective meanings assigned thereto in
the Supplemental Retirement 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):
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"Supplemental Retirement Agreement" - defined in recital B.
"Guarantied Party" or "Guarantied Parties" - Xxxx X. Xxxxx and/or his
Surviving Spouse and/or his and/or her beneficiaries (including their respective
estates) under the Supplemental Retirement Agreement
"Obligations" - defined in Section 2.1(a).
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
to the Guarantied Parties when due, at the times provided for in the
Supplemental Retirement Agreement, of all Benefit Amounts provided for and
required to be paid by Conseco under the Supplemental Retirement Agreement,
whether such payments are absolute or contingent, or now or hereafter existing,
or due or to become due under the Supplemental Retirement Agreement, and all
interest, fees, expenses or other amounts due or to become due in the future
under the Supplemental Retirement Agreement (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. Section 362(a),
and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy
Code, 11 U.S.C. Section 502(b) and Section 506(b)) (all such obligations
sometimes hereinafter collectively called the "Obligations"); and
(b) indemnifies and holds harmless each Guarantied Party 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 Guaranty.
This Guaranty 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 exercise any right, assert any claim or
demand or enforce any remedy whatsoever against Conseco before the performance
of, or as a condition to, the performance of the obligations of Guarantor
hereunder.
SECTION 2.2. 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
Conseco have been paid in full, and all obligations of Guarantor hereunder shall
have been paid in full. Guarantor guarantees that the Obligations of Conseco
will be paid strictly in accordance with the terms of the Supplemental
Retirement Agreement regardless of any law, regulation or order now or hereafter
in effect in any
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jurisdiction affecting any of such terms or the rights of any Guarantied Party.
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
Supplemental Retirement Agreement;
(b) the failure of any Guarantied Party to assert any claim or demand
or to enforce any right or remedy against Conseco under the provisions of the
Supplemental Retirement Agreement; or
(c) any reduction, limitation, impairment or termination of the
Obligations of Conseco 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 Conseco; or
(d) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, Conseco, including but not
limited to any defense based on (i) a determination of unenforceability of the
Obligations of Conseco by any court, (ii) the rejection of the Supplemental
Retirement Agreement or any of the Obligations of Conseco thereunder in any
proceeding under the United States Bankruptcy Code, (iii) the disallowance of
any claim asserted by any of the Guarantied Parties in any proceeding under the
United States Bankruptcy Code or otherwise based on the Obligations of Conseco
under the Supplemental Retirement Agreement or (iv) any limitation or diminution
of the amounts payable by Conseco under the Supplemental Retirement Agreement
imposed by law or any court, it being the intention of the parties that this
Guarantee shall in any or all of such circumstances be payable to the full
extent of the Obligations of Conseco as set forth in the Supplemental Retirement
Agreement as if no such defense were available or asserted.
SECTION 2.3. 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 Guarantied Party, whether upon the insolvency,
bankruptcy or reorganization of Conseco or otherwise, all as though such payment
had not been made.
SECTION 2.4. Waiver, etc. Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of Conseco and/or obligations under this Guaranty and any
requirement that any Guarantied Party exhaust any right or take any action
against Conseco.
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SECTION 2.5. Successors, Transferees and Assigns. 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 each Guarantied
Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES BY GUARANTOR
To induce Xxxxx to enter into the Supplemental Retirement Agreement,
Guarantor represents and warrants that:
SECTION 3.1. Organization, etc. Guarantor is a corporation, duly
organized, validly existing and in good standing under the laws of the state of
its incorporation or formation and Guarantor is duly qualified to transact
business and in good standing as a foreign corporation, 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 upon its business or assets or upon its
ability or right to carry out all of the terms of this Guaranty.
SECTION 3.2. Authorization. Guarantor (a) has the power to execute,
deliver and perform this Guaranty, and (b) has taken all necessary action to
authorize the execution, delivery and performance by it of this Guaranty,
including, without limitation, ratification of this Guaranty by the Board of
Directors of the Guarantor which, in connection with such approval, reviewed a
true copy of the Supplemental Retirement Agreement and determined that the
consideration being received by the Guarantor for the execution and delivery of
this Guaranty is fair to the Guarantor and reasonable. A copy of the resolution
of the said Board of Directors is annexed hereto.
SECTION 3.3. No Conflict. The execution, delivery and performance by
Guarantor of this Guaranty 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 (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 Guarantor or (d) contravene or
conflict with any provision of the Articles of Incorporation or by-laws of
Guarantor.
SECTION 3.4. No Default or Event of Default. No Default or Event of
Default has occurred and is continuing with respect to Guarantor.
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ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Indemnification. Guarantor agrees to indemnify the
Guarantied Parties and hold the Guarantied Parties harmless from and against any
and all liabilities, losses, claims, damages, costs and expenses of any kind to
which the Guarantied Parties may incur or to which any of them may become
subject, whether directly or indirectly (including, without limitation, the
reasonable fees and disbursements of counsel for the Guarantied Parties),
relating to or arising out of this Guaranty or the enforcement by the Guarantied
Parties hereof. All obligations of Guarantor provided for in this Section 4.1
shall survive termination of this Guaranty.
SECTION 4.2. Notices. All notices, requests and other communications to
any party hereunder shall be in writing and shall be given to such party at its
address or facsimile number set forth on the signature or acknowledgment pages
hereof or such other address or facsimile number as such party may hereafter
specify for the purpose by written notice to Xxxxx and Guarantor similarly
given. 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, (b) if given by United States mail, seventy-two (72)
hours after such communication is deposited in the mails by certified or
registered mail, return receipt requested, with sufficient postage prepaid,
addressed as aforesaid or (c) if given by recognized courier (such as Federal
Express or UPS) which guarantees next business day delivery, when delivered at
the address specified in this Section.
SECTION 4.3. No Assignment. Neither Guarantor nor any of the Guarantied
Parties shall assign this Guaranty nor any interest herein.
SECTION 4.4. Amendments. The provisions of this Guaranty may from time
to time be amended, modified or waived, only if such amendment, modification or
waiver is in writing and consented to by Guarantor and Xxxxx, 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.
SECTION 4.5. 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 4.6. No Limitation of Other Obligations. All obligations of
Guarantor and rights of Xxxxx 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.
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SECTION 4.7. Governing Law. This guaranty shall be a contract made
under and governed by the laws of the state of Illinois, without regard to
conflicts of laws principles. All obligations of Guarantor and rights of the
Guarantied Parties in respect of the obligations of Guarantor expressed herein
shall be in addition to and not in limitation of those provided by applicable
law.
SECTION 4.8. Counterparts. This Guaranty 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. Guarantor
hereby acknowledges receipt of a true, correct and complete counterpart of this
Guaranty.
SECTION 4.9 Not a Contract of Insurance. Nothing contained in this
Guaranty shall be interpreted as creating a contract of insurance between the
Guarantor, and the Guarantied Parties shall not be deemed policyholders for any
purpose under this Guaranty.
SECTION 4.10 Funding. All amounts payable or credited to the Guarantied
Parties shall be paid in cash from the general assets of Guarantor. Guarantor
shall be under no obligation to establish a special or separate fund, or to
segregate any of its assets, to assure payment of amounts under this Guaranty.
SECTION 4.11 Unsecured Creditor. Nothing contained in this Guaranty,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, nor a fiduciary relationship between the Guarantor
and the Guarantied Parties. To the extent that the Guarantied Parties acquire a
right to receive any amount from Guarantor under this Agreement, such rights
shall be no greater than the right of an unsecured creditor of Guarantor. Xxxxx
acknowledges that, in the event Guarantor becomes financially distressed
(whether due to bankruptcy, insolvency or otherwise), Guarantor's ability to pay
benefits to the Guarantied Parties under this Agreement could be impaired.
SECTION 4.12 Surviving Spouse as Third-Party Beneficiary. The Surviving
Spouse of Xxxxx shall be a third-party beneficiary of this Guaranty and she
and/or her estate shall be entitled to enforce, on her own behalf and/or on
behalf of her estate, all of the terms hereof pertaining to the Guarantor's
obligations hereunder.
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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.
BANKERS LIFE AND CASUALTY COMPANY
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
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