SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
AMENDMENT NO. 2
CONSECO, INC.
----------------
(Name of Issuer)
Common Stock
------------------------------
(Title of Class of Securities)
208464107
-------------
(CUSIP Number)
Stephen C. Hilbert
11825 N. Pennsylvania Street
Carmel, Indiana 46032
(317) 817-6100
------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 21, 1996
------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box:
[ ]
Check the following box if a fee is being paid with this statement:
[ ]
This filing contains ___ pages. The Exhibit Index appears on page 5.
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CUSIP No. . . . . . . . . . . . . . . . . . . . . . . 208464107
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON . . . . . . . . . . Stephen C. Hilbert
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON . . . . . Not given
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ] (b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS . . . . . . . . . . . . . . . . . . . . . . . . PF; BK
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
[ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION . . . . . . United States Citizen
- -------------------------------------------------------------------------------
Number of 7. SOLE VOTING POWER . . . . . . . . . . . . 3,171,192
----------------------------------------------------
Shares
Beneficially 8. SHARED VOTING POWER . . . . . . . . . . . - 0 -
----------------------------------------------------
Owned By
Each 9. SOLE DISPOSITIVE POWER . . . . . . . . . . 3,171,192
-----------------------------------------------------
Reporting
Person With 10. SHARED DISPOSITIVE POWER . . . . . . . . .. - 0 -
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,171,192
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES SHARES
[ ]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.4%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON . . . . . . . . . . . . . . . IN
- -------------------------------------------------------------------------------
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ITEM 1. SECURITY AND ISSUER
This statement relates to the Common Stock, no par value per share (the
"Common Stock"), of Conseco, Inc., an Indiana corporation ("Conseco").
Conseco's principal executive office is located at 11825 N.
Pennsylvania Street, Carmel, Indiana 46032. The share information
provided herein reflects a 2 for 1 stock split effective April 1,
1996.
ITEM 2. IDENTITY AND BACKGROUND
Not amended. See the statement on Schedule 13D previously filed.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The acquisition which is the subject of this Amendment No. 2 to
Schedule 13D is the beneficial ownership of 330,832 shares of Common
Stock acquired by The Thomas C. Hilbert Irrevocable Trust (the "Hilbert
Trust") and The Christopher L. Myers Irrevocable Trust (the "Myers
Trust"; together, the "Trusts"). Mr. Hilbert is the trustee of the
Trusts. All such shares were acquired pursuant to the Conseco, Inc.
Director, Executive and Senior Officer Stock Purchase Plan (the "Plan")
in open market transactions on May 20, 21 and 24, 1996. The following
table sets forth the shares of Common Stock acquired and the
consideration paid on each date:
<TABLE>
<CAPTION>
Hilbert Trust Myers Trust
--------------------------------------- ---------------------------------------
Shares Shares
of Consideration of Consideration
Common Stock Paid Common Stock Paid
-------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C>
May 20, 1996 140,358 $5,503,370.80 25,062 $982,672.29
May 21, 1996 70,175 2,768,449.66 12,531 494,359.27
May 24, 1996 70,175 2,691,916.80 12,531 480,692.96
</TABLE>
Such acquisitions increased the number of shares of Common Stock
beneficially owned by Mr. Hilbert to 3,171,192 shares, or 7.4% of the
shares of Common Stock deemed to be outstanding under Rule 13d-3(d) of
the Securities and Exchange Commission. Shares acquired by the Trusts
were acquired with funds borrowed from Bank of America National Trust
and Savings Association ("Bank of America"). Pursuant to the Plan, such
loans are guaranteed by Conseco. Mr. Hilbert also acquired shares in
March 1996 which purchases have not previously been reported on
Schedule 13D. Such shares were acquired in connection with the exercise
of stock options previously reported on Schedule 13D. Pursuant to such
exercise Mr. Hilbert exercised options to acquire 800,000 shares of
Common Stock by surrendering to Conseco 77,071 shares of Common Stock
he previously owned to pay the exercise price, and Conseco withheld
332,549 shares of Common Stock to pay for taxes payable in respect to
such exercise. In connection with such exercise, Conseco also granted
Mr. Hilbert immediately exercisable options to acquire 409,620 shares
of Common Stock at an exercise price of $32.438 per share.
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See the statements on Schedule 13D, as amended, previously filed for a
description of the previous acquisitions.
ITEM 4. PURPOSE OF TRANSACTION
Mr. Hilbert has acquired beneficial ownership of the Common Stock for
investment purposes. Pursuant to the Plan, Mr. Hilbert intends to
acquire an additional 329,168 shares of Common Stock through the
Trusts.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Set forth below is information concerning the Common Stock beneficially
owned by Mr. Hilbert on the date hereof.
(a) 3,171,192 shares, which number includes (i) 1,155,370 shares
of Common Stock which may be acquired by Mr. Hilbert within 60
days upon exercise of stock options and (ii) 330,832 shares of
Common Stock which are owned by the Trusts of which Mr.
Hilbert is the sole trustee. Such amount is 7.4% of the
outstanding shares of Common Stock of Conseco.
(b) Mr. Hilbert has the sole power to vote or to direct the vote
of all of the shares disclosed in (a) and the sole power to
dispose or to direct the disposition of such shares. Shares
beneficially owned which are subject to options do not have
voting rights prior to exercise of such options.
(c) Mr. Hilbert has not engaged in any transactions concerning the
Common Stock during the past 60 days other than as disclosed
in Item 3 above.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
See the statement on Schedule 13D, as amended, previously filed.
The shares of Common Stock beneficially owned by Mr. Hilbert include
1,155,370 shares which may be acquired within 60 days upon exercise of
stock options. Under those stock options, Mr. Hilbert has the right to
acquire (i) 15,000 shares of Common Stock at a price of $26.625 per
share, (ii) 238,750 shares of Common Stock at a price of $26.625 per
share and (iii) 492,000 shares of Common Stock at a price of $24.125
per share and (iv) 409,620 shares of Common Stock at a price of $32.438
per share. Mr. Hilbert also holds options not exercisable within 60
days to acquire 3,098,250 shares of Common Stock. All such options were
granted under the Conseco Stock Option Plan, as amended, and the
Conseco 1994 Stock and Incentive Plan.
At April 24, 1996, Mr. Hilbert held an aggregate of 808,846.5 stock
units (397,247 of which are vested) (the "Stock Units") under the
Conseco Amended and Restated Deferred Compensation Program and the
Conseco 1994 Stock and Incentive Plan. Each Stock Unit represents and
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<PAGE>
is payable in one share of Common Stock. The Stock Units have no voting
rights and are not payable within the next 60 days because they either
have been deferred or have not yet vested. The Stock Units must be paid
out following a change in control as defined in the Conseco Amended and
Restated Deferred Compensation Program and the Conseco 1994 Stock and
Incentive Plan for awards under the respective plans.
The pledged shares of Common Stock in connection with a $1.9 million
loan from Conseco to Mr. Hilbert were released.
The shares of Common Stock held by the Trusts were purchased pursuant
to the Plan with the proceeds of a loan obtained pursuant to the Credit
Agreement (as defined herein). The Credit Agreement is filed as an
exhibit hereto and is made a part hereof. All such shares owned by the
Trust have been pledged to Bank of America under the Borrower Pledge
Agreement filed as an exhibit hereto and made a part hereof. Pursuant
to the Plan, Mr. Hilbert has elected to purchase an additional 329,168
shares of Common Stock through the Trusts.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Employment Agreement dated January 1, 1987, between Conseco
and Stephen C. Hilbert, was filed as Exhibit 10.1.2 to
Conseco's Annual Report on Form 10-K for 1986, and Amendment
No. 1 thereto was filed as Exhibit 10.1.2 to Conseco's Annual
Report on Form 10-K for 1987; and are incorporated herein by
this reference.
2. Conseco's Stock Option Plan was filed with the Commission
as Exhibit B to its definitive Proxy Statement dated
December 10, 1983; Amendment No. 1 thereto was filed with
the Commission as Exhibit 10.8.1 to its Report on Form 10-Q
for the quarter ended June 30, 1985; Amendment No. 2 thereto
was filed with the Commission as Exhibit 10.8.2 to its
Registration Statement on Form S-1, No. 33-4367; Amendment
No. 3 thereto was filed with the Commission as Exhibit
10.8.3 to Conseco's Annual Report on Form 10- K for 1986;
Amendment No. 4 thereto was filed with the Commission as
Exhibit 10.8 to Conseco's Annual Report on Form 10-K for
1987; Amendment No. 5 thereto was filed with the Commission
as Exhibit 10.8 to Conseco's Report on Form 10-Q for the
quarter ended September 30, 1991; and such documents are
incorporated herein by this reference.
3. Amended and Restated Conseco Stock Bonus and Deferred
Compensation Program was filed as Exhibit 10.8.4 to Conseco's
Annual Report on Form 10-K for 1992 and Amendment to the
Amended and Restated Conseco Stock Bonus and Deferred
Compensation Program was filed as Exhibit 10.8.9 to Conseco's
Annual Report on Form 10-K for 1994. Such documents are
incorporated herein by this reference.
4. The Conseco 1994 Stock and Incentive Plan was filed as Exhibit
A to Conseco's definitive Proxy Statement dated April 29, 1994
and is incorporated herein by this reference.
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<PAGE>
5. Conseco, Inc. Director, Executive and Senior Officer Stock
Purchase Plan.
6. Credit Agreement, (the "Credit Agreement"), dated as of May
13, 1996, among the Borrowers (including the Trusts), the
financial institutions party thereto and Bank of America.
7. Guaranty, dated as of May 13, 1996, among Conseco and Bank of
America.
8. Borrower Pledge Agreement, dated May 13, 1996, among the
Trusts and Bank of America.
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<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: May 31, 1996
/S/Stephen C. Hilbert
--------------------
Stephen C. Hilbert
CONSECO, INC.
DIRECTOR, EXECUTIVE AND SENIOR
OFFICER STOCK PURCHASE PLAN
1. PURPOSE. The Director, Executive and Senior Officer Stock
Purchase Plan (the "Plan"), of Conseco, Inc. ("Conseco"), is
adopted to facilitate the purchase, by the Directors,
executives and senior managers of Conseco and its subsidiaries
(collectively, the "Company"), of Conseco's common stock
("Common Stock") and Conseco's Preferred Redeemable Increased
Dividend Equity Securities, 7% PRIDES, Convertible Preferred
Stock ("PRIDES"). The purchases facilitated by the Plan are
intended to achieve the following specific purposes:
a) more closely align key employees' financial rewards
with the financial rewards realized by all other
shareholders of the Company;
b) increase key employees' motivation to manage the
Company as owners; and
c) increase the ownership of Common Stock and PRIDES
among senior management of the Company.
2. ELIGIBILITY. To be eligible to participate in the Plan, the
individual must be a non-employee Director of the Company, an
executive officer of the Company or a senior officer of the
Company selected by the Directors ("Eligible Participant").
3. PARTICIPATION. To become a Plan participant ("Participant"),
an Eligible Participant must satisfy the following
requirements:
a) submit a completed, signed and irrevocable election
to purchase all or, in the case of Directors and
Executive Officers, a portion of the Common Stock or
PRIDES which the Eligible Participant is eligible to
purchase under the Plan along with a power of
attorney authorizing such purchases on the
Participant's behalf;
b) complete and sign all necessary agreements and other
documents relating to the loan described in Section
4 hereof including, but not limited to, personal
financial statements, letters of instruction to
brokers, transfer agents and banks as are necessary
or appropriate under the loan described in Section
4 hereof, and a power of attorney authorizing
borrowings under such loan; and
c) satisfy all other conditions of participation
specified in the Plan.
<PAGE>
The agreements and other documents specified in subsections 3 (a), (b)
and (c) must be submitted at such times and to such Company offices as
specified by the Company. No Eligible Participant is required to
participate in the Plan.
Directors and executive officers may purchase up to 200,000 shares of
Common Stock under the Plan. Senior officers electing to become
Participants must purchase 10,000 shares of Common Stock. Up to
2,000,000 shares of Common Stock may be purchased by all Participants.
Participants may elect that the number of shares of Common Stock they
are eligible to purchase be reduced by up to 50% and that the same
number of shares of PRIDES divided by two be purchased under the Plan.
Directors and executive officers shall have the right to purchase
shares not purchased by other Participants in such amount as is
determined by the pro rata amount of their participation in the Plan
compared to the participation of the other Participants electing to
purchase additional shares. All such purchases may be made by the
individual Participant or by a trust, corporation, partnership or
limited liability company controlled by the Participant ("Participant
Designee"; the term Participant shall include Participant Designee
unless the context otherwise requires).
4. PURCHASE OF SHARES. Conseco, in its sole discretion subject
to the terms and provisions of the Plan, will determine the
timing, amount, price and mechanics of all of the purchases of
shares of Common Stock and PRIDES (the "Purchased Shares")
through open market and negotiated transactions. Purchases of
Purchased Shares shall be effected through a broker in
accordance with Rule 10b-18 under the Securities Exchange Act
of 1934. The shares of Common Stock purchased pursuant to the
Plan will be allocated proportionately among Participants at
the end of each trading day based upon the percentage of all
of the shares of Common Stock Participants have elected to
purchase and the average price for all purchases of shares of
Common Stock on that day. The shares of PRIDES Participants
have elected to purchase will be allocated proportionately
among Participants at the end of each trading day based upon
the percentage of all of the shares of PRIDES Participants
have elected to purchase and the average price for all
purchases of shares of PRIDES on that day.
Conseco has arranged the opportunity for each Participant to obtain a
loan through Bank of America National Trust and Savings Association
("Bank") to fund the purchase of the Purchased Shares (the "Loan").
Each Participant must sign a power of attorney authorizing loans under
the Credit Agreement with the Bank and the purchase of the Purchased
Shares. Each Participant is responsible for satisfying all of the
lending requirements specified by the Bank to qualify for the Loan
including all collateral requirements. Each Participant is fully
obligated to repay to the Bank all principal, interest, and any
prepayment fees on the Loan when due and payable.
2
<PAGE>
In the event a Participant does not wish to obtain the Loan, the
Participant shall provide sufficient funds to fund the purchase of the
Purchased Shares. Such Participant must execute a power of attorney
authorizing the purchase of the Purchased Shares. If the Participant
fails to fund the purchase of the Purchased Shares, the Participant may
no longer participate in the Plan, and all of the Purchased Shares not
paid for will be allocated to the other Participants.
5. REGISTRATION OF SHARES. The Purchased Shares will be
registered in the name of the Participant or his or her
designee and certificated. Each certificate will bear a
legend referring to the Plan. The certificates for the
Purchased Shares of each Participant who participates in the
Loan will be held by the Bank as collateral for the Loan.
Each such Participant must deliver to the Bank a stock power
endorsed in blank with respect to the Purchased Shares. A
Participant may be able to obtain a release of the Purchased
Shares from the Bank provided that other collateral of equal
value is substituted as collateral for the Loan.
6. SHAREHOLDER RIGHTS. Each Participant will have all of the
rights of a shareholder with respect to the Purchased Shares,
including the right to vote the shares and the right to
receive dividends. Any dividends in excess of required
interest payments will be deposited to the Participant's
account at the Bank.
7. SALE OF PURCHASED SHARES. Each Participant is permitted to
sell all or any portion of the Purchased Shares; provided,
that any such sale does not violate any provision of a Loan.
8. DEATH OR DISABILITY. Upon the death of a Participant, her or
his estate may elect to cause Conseco to pay the estate an
amount equal to the purchase price paid for the Purchased
Shares purchased by the deceased Participant minus the value
of such shares on the date of the Participant's death based
upon the average of the high and low trading prices per share
for the Purchased Shares as reported by the principal national
stock exchange upon which such shares are traded. The estate
of a deceased Participant must make such election, in writing,
within 30 days of the date of the Participant's death. Upon
the total and permanent disability of a Participant who is an
employee of the Company, such disabled Participant may elect
to cause Conseco to pay the Participant an amount equal to the
purchase price paid for the Purchased Shares by the disabled
Participant minus the value of such shares on the date of the
determination of the Participant's total and permanent
disability based upon the average of the high and low trading
prices per share for the Purchased Shares as reported by the
principal national stock market upon which such shares are
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<PAGE>
traded. The Participant must make such election, in writing, within 30
days of the date of the determination of the Participant's total and
permanent disability. "Total and permanent disability" means the
inability of a Participant to provide meaningful service for the
Company due to a medically determinable physical or mental impairment.
Such determination of total and permanent disability shall be made by
the Company. Notwithstanding the above, if a Participant qualifies for
Federal Social Security disability benefits or for payments under the
Company's long-term disability income plan, based upon his physical or
mental condition, he shall be deemed to suffer from a total and
permanent disability hereunder. This Section 8 has no effect on a
deceased or disabled Participant's sale of Purchased Shares before the
Participant's death or disability. Payment by Conseco of amounts
described in this Section 8 is conditioned on the payment in full of
the Participant's Loan, if any, and the release of the Company's
guarantee with respect thereto. This Section 8 will terminate January
1, 2002.
9. LOAN GUARANTEE. Conseco will guarantee repayment to the Bank
of 100% of all principal, interest, prepayment fees and other
obligations of each Participant under such Participant's Loan
described in Section 4. The Conseco loan guaranty is a
condition to the loan arrangement Conseco has made with the
Bank. The terms and conditions of the guarantee are as agreed
by Conseco and the Bank. If a Participant specifies a
Participant Designee, the Participant shall enter into an
indemnification agreement to indemnify Conseco for any losses
under the guaranty of the Loan with respect to the Participant
Designee. Each Participant is fully obligated to repay to the
Bank all principal, interest, and other amounts on the Loan
when due and payable. Conseco may take any action relating to
the Participant and her or his assets, which the Board of
Directors deems reasonable and necessary, to obtain full
reimbursement for amounts Conseco pays to the Bank under its
guaranty related to the Participant's or a Participant
Designee's Loan ("Loan Default"). Notwithstanding the
foregoing, Conseco will not be subrogated to any right of the
Bank as a holder of a security interest in the Purchased
Shares.
10. CHANGES OF CONTROL. A "Change of Control" of Conseco shall
mean a change of control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act
of 1934 (the "1934 Act") as revised effective January 20,
1987, or if Item 6(e) is no longer in effect, any regulations
issued by the Securities and Exchange Commission pursuant to
the 1934 Act which serve similar purposes; provided, that,
without limitations, (x) such a change of control shall be
deemed to have occurred if and when either (A) except as
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provided in (y) below, any "person" (as such terms is used in Sections
13(d) and 14(d) of the 1934 Act) is or becomes a "beneficial owner" (as
such term is defined in Rule 13d-3 promulgated under the 1934 Act),
directly or indirectly, of securities of Conseco representing 25% or
more of the combined voting power of Conseco's then outstanding
securities entitled to vote with respect to the election of its Board
of Directors or (B) as the result of a tender offer, merger,
consolidation, sale of assets, or contest for election of directors, or
any combination of the foregoing transactions or events, individuals
who were members of the Board of Directors of Conseco immediately prior
to any such transaction or event shall not constitute a majority of the
Board of Directors following such transaction or event, and (y) no such
change of control shall be deemed to have occurred if and when either
(A) any such change is the result of a transaction which constitutes a
"Rule 13e-3 transaction" as such term is defined in Rule 13e-3
promulgated under the 1934 Act or (B) any such person becomes, with the
approval of the Board of Directors of Conseco, the beneficial owner of
securities of Conseco representing 25% or more but less than 50% of the
combined voting power of Conseco's then outstanding securities entitled
to vote with respect to the election of its Board of Directors and in
connection therewith represents, and at all times continues to
represent, in a filing, as amended, with the Securities and Exchange
Commission on Schedule 13D or Schedule 13G (or any successor Schedule
thereto) that "such person has acquired such securities for investment
and not with the purpose nor with the effect of changing or influencing
the control of the Company, nor in connection with or as a participant
in any transaction having such purpose or effect" or words of
comparable meaning and import. The designation by any such person, with
the approval of the Board of Directors of Conseco, of a single
individual to serve as a member of, or observer at meetings of,
Conseco's Board of Directors, shall not be considered "changing or
influencing the control of the Company" within the meaning of the
immediately preceding clause (B), so long as such individual does not
constitute at any time more than one-third of the total number of
directors serving on such Board. In the event of a Change of Control,
each Participant will receive in exchange for the Purchased Shares the
higher of (i) the purchase price paid for all of each Participant's
Purchased Shares, respectively, plus all interest paid by each
respective Participant under the Loan or (ii) the amount of the
consideration to be paid for the Purchased Shares in connection with
the Change of Control. Such amount shall be paid to the Participants
upon consummation of the event resulting in a Change of Control.
11. OTHER TERMINATION. If a Participant ceases to be a Director
or officer of Conseco in circumstances other than as described
in section 10, he or she may either (i) retire the Loan
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<PAGE>
immediately and release Conseco's guaranty or (ii) continue the Loan
until its maturity date with Conseco's guaranty.
If the Participant desires Conseco's guaranty to continue, he or she
agrees that, as compensation for continuing such guaranty beyond the
termination of such Participant's employment or directorship, as the
case may be, the former Participant shall pay to Conseco the following
fees:
(a) A continuing guaranty fee on the outstanding note
balance at each calendar quarter end to be paid at
the rate of .5% each quarter.
(b) A settlement fee equal to half of the "Exit
Profit". The Exit Profit shall be the excess, if
any, of (i) the proceeds received from the sale of
the Related Shares (as defined herein) or the
market value of the Related Shares on the date the
guaranty is released, whichever occurs first minus
(ii) the sum of (x) the market value of the Related
Shares at the Participant's termination date and
(y) the interest accrued on the Loan since the
termination date for the Related Shares. The
"Related Shares" means the number of Purchased
Shares acquired with the proceeds of the remaining
principal amount of the loan at the date of
termination of employment.
12. ADMINISTRATION. The Board of Directors of Conseco shall be
charged with the administration and interpretation of the Plan
but may delegate the ministerial duties hereunder to such
persons as it determines. The Board of Directors of Conseco
may adopt such rules as may be necessary or appropriate for
the proper administration of the Plan. The decision of the
Board of Directors of Conseco in all matters involving the
interpretation and application of the Plan shall be final and
shall be given the maximum possible deference allowed by law.
13. PAYMENT OF EXPENSES. The expenses of administering the Plan
shall be paid by the Company except those expenses which are
expenses of the Participants.
14. EMPLOYER-EMPLOYEE RELATIONSHIP. The establishment of this
Plan shall not be construed as conferring any legal or other
rights upon any employee or any person for a continuation of
employment, nor shall it interfere with the rights of the
Company to discharge any employee or otherwise act with
relation to the employee. The Company may take any action
(including discharge) with respect to any employee or other
person and may treat such person without regard to the effect
which such action or treatment might have upon such person as
a Participant of this Plan.
G:\LEGAL\PLAN\CONSECO3
6
<PAGE>
15. AMENDMENT AND TERMINATION. The Company reserves the right to
change or discontinue this Plan by action of the Board of
Directors in its discretion; provided, however, that in the
case of any person to whom benefits under this Plan had
accrued upon termination of employment prior to such Board of
Directors action, or in the case of any Participant who would
have been entitled to benefits under this Plan had the
Participant's employment ceased prior to such change or
discontinuance, the benefits such person had accrued under
this Plan prior to such change or discontinuance shall not be
adversely affected thereby.
Notwithstanding anything herein to the contrary, nothing contained
herein shall restrict the Company's right to terminate the Plan.
16. WITHHOLDING. The Company shall have the right to deduct in cash
(whether under this Plan or otherwise) in connection with all payments
by the Company to a Participant under this Plan any taxes required by
law to be withheld and to require any payments required to enable it to
satisfy its withholding obligations.
17. GOVERNING LAW. This Plan shall be construed in accordance
with the laws of the State of Indiana.
Effective Date: April 4, 1996
G:\LEGAL\PLAN\CONSECO3
7
CREDIT AGREEMENT
Dated as of May 13, 1996,
among
THE INDIVIDUALS LISTED ON THE SIGNATURE PAGES HERETO,
as Borrowers,
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
\25605\113\10DIRCON.012
<PAGE>
The following Table of Contents has been inserted for convenience only and does
not constitute a part of this Agreement.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS....................................................................
1.1 Certain Defined Terms.............................................................................
1.2 Other Definitional Provisions.....................................................................
1.3 Accounting and Financial Determinations...........................................................
SECTION 2. THE COMMITMENTS AND THE LOANS.......................................................................
2.1 Commitment........................................................................................
2.2 Procedure for Borrowings..........................................................................
2.3 Funding Reliance for Borrowings...................................................................
2.4 Repayment of Loans................................................................................
2.5 Loan Accounts; Record Keeping.....................................................................
SECTION 3. INTEREST............................................................................................
3.1 Interest Rates....................................................................................
3.2 Default Interest Rate.............................................................................
3.3 Interest Payment Dates............................................................................
3.4 Computation of Interest...........................................................................
SECTION 4. PAYMENTS AND PREPAYMENTS............................................................................
4.1 Voluntary Termination or Reduction of Commitments..................................................
4.2 Optional Prepayments..............................................................................
4.3 Payments by the Borrowers.........................................................................
4.4 Application of Prepayments........................................................................
4.5 Sharing of Payments...............................................................................
4.6 Setoff............................................................................................
4.7 Net Payments......................................................................................
SECTION 5. CHANGES IN CIRCUMSTANCES............................................................................
5.1 Increased Costs...................................................................................
5.2 Change in Rate of Return..........................................................................
5.3 Discretion of Banks as to Manner of Funding.......................................................
5.4 Replacement of Banks..............................................................................
5.5 Conclusiveness of Statements; Survival of
Provisions....................................................................................
SECTION 6. COLLATERAL AND OTHER SECURITY.......................................................................
6.1 Collateral Documents..............................................................................
6.2 Application of Proceeds from Collateral...........................................................
6.3 Further Assurances................................................................................
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SECTION 7. REPRESENTATIONS AND WARRANTIES OF BORROWERS.........................................................
7.1 No Conflict.......................................................................................
7.3 Financial Statements..............................................................................
7.4 Material Adverse Change...........................................................................
7.5 Litigation and Contingent Obligations.............................................................
7.6 Liens.............................................................................................
7.7 Taxes.............................................................................................
7.8 Accuracy of Information...........................................................................
7.9 Proceeds..........................................................................................
7.10 Securities Laws..................................................................................
7.11 Solvency.........................................................................................
7.12 No Default.......................................................................................
7.13 Margin Regulations...............................................................................
SECTION 8. COVENANTS OF BORROWERS..............................................................................
8.1 Reports, Certificates and Other Information.......................................................
8.2 Taxes and Liabilities.............................................................................
8.3 Compliance with Laws..............................................................................
SECTION 9. CONDITIONS AND EFFECTIVENESS OF THIS AGREEMENT.......................................................
9.1 Initial Loans.....................................................................................
9.2 All Loans.........................................................................................
SECTION 10. EVENTS OF DEFAULT AND THEIR EFFECT.................................................................
10.1 Events of Default................................................................................
10.2 Effect of Event of Default.......................................................................
SECTION 11. THE AGENT..........................................................................................
11.1 Authorization and Action.........................................................................
11.2 Liability of the Administrative Agent............................................................
11.3 Administrative Agent and Affiliates..............................................................
11.4 Bank Credit Decision.............................................................................
11.5 Indemnification..................................................................................
11.6 Successor Agent..................................................................................
SECTION 12. ASSIGNMENTS AND PARTICIPATIONS.....................................................................
12.1 Assignments......................................................................................
12.2 Participations...................................................................................
12.3 Disclosure of Information........................................................................
12.4 Foreign Transferees..............................................................................
SECTION 13. MISCELLANEOUS......................................................................................
13.1 Waivers and Amendments...........................................................................
13.2 Failure to Consent...............................................................................
13.3 Notices..........................................................................................
13.4 Indemnity........................................................................................
13.5 Subsidiary References............................................................................
13.6 Captions.........................................................................................
13.7 GOVERNING LAW....................................................................................
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13.8 Counterparts.....................................................................................
13.9 SUBMISSION TO JURISDICTION; WAIVER OF VENUE......................................................
13.10 Successors and Assigns..........................................................................
13.11 WAIVER OF JURY TRIAL............................................................................
</TABLE>
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SCHEDULES AND EXHIBITS
SCHEDULES
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 Pledge Agreement
EXHIBIT D Form of Guaranty
EXHIBIT E-1 Form of Opinion of Lawrence W. Inlow, general
counsel to the Guarantor and its Subsidiaries
(including BLHC)
EXHIBIT E-2 Form of Opinion of Baker & Daniels, outside
counsel to the Guarantor and its Subsidiaries
(including BLHC)
EXHIBIT F Form of Confidentiality Letter
EXHIBIT G Form of Assignment Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of May 13, 1996, among the
individuals 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 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("BofA"), as administrative agent for the Banks (herein in
such capacity, together with any successors thereto in such capacity, called the
"Administrative Agent").
Background
WHEREAS, each of the Borrowers desires that the Banks make available to
the Borrowers, severally but not jointly, loans not to exceed an aggregate
principal amount of $80,000,000 for all Borrowers on the terms and subject to
the conditions set forth in this Agreement;
WHEREAS, the proceeds of the loans to be made under this Agreement
shall be used by the Borrowers solely (a) to purchase common stock, par value
$.01 per share, of the Guarantor (as hereinafter defined) and/or (b) to purchase
up to $40,000,000 stated value of PRIDES (as hereinafter defined);
WHEREAS, the Banks are willing, on the terms and conditions
hereinafter set forth, to make the 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):
"Addendum and Affirmation Agreement" shall have the meaning
provided in the Guaranty.
"Additional Secured Borrower Obligations" and "Additional Secured
Borrower Indebtedness" - see Section 8.14 of the Guaranty and Section 1 of the
Revolving Credit Agreement.
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"Administrative Agent" - see Preamble.
"Administrative Agent's Office" shall mean 231 South LaSalle Street,
Chicago, Illinois 60697, or such other address designated by the Administrative
Agent (or any successor agent) to the Borrowers and the Banks from time to time.
"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 or managing general partners; 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.
"Agreement" shall mean this Credit Agreement, as amended or
modified.
"Assignment Agreement" - see Section 12.1.
"Banks" or "Bank" - see Preamble.
"Bank Default" shall mean (a) the refusal (which has not been
retracted) of a Bank to make available its Percentage of any Loans when required
hereunder or (b) a Bank having notified the Administrative Agent and/or the
Guarantor (on behalf of any Borrower) that it does not intend to comply with its
obligations under Section 2.1 to the extent required thereunder.
"Base Rate" shall mean, for any day, the higher of (a) 0.50%
per annum above the latest Federal Funds Effective Rate and (b)
the rate of interest in effect for such day as publicly announced
from time to time by BofA in San Francisco, California, as its
"reference rate." The "reference rate" is a rate set by BofA
based upon various factors including BofA's costs and desired
return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in
the reference rate announced by BofA shall take effect at the
opening of business on the date specified in the public
announcement of such change.
"Base Rate Margin" - see Section 3.1.
"BofA" - see Preamble.
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"Borrower" or "Borrowers" - see Preamble.
"Borrower Collateral" shall mean, as to any Borrower, any Collateral
furnished by such Borrower under Section 6.1(a).
"Borrower Collateral Percentage" shall mean, as to any Borrower, the
Collateral Percentage (as defined in the Revolving Credit Agreement) applicable
to the Additional Secured Borrower Indebtedness, multiplied by 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.
"Borrowing" shall mean a borrowing hereunder consisting of Loans made
to the Borrowers or any Borrower on the same day by the Banks under Section 2.
"Borrowing Date" shall mean any date on which a Borrowing occurs under
Section 2.
"Borrowing Termination Date" shall mean the earlier of (a) December 31,
1996 or (b) the Termination Date.
"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 .
"Charges" - see Section 4.7.
"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.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
regulations promulgated thereunder, or, as the context requires, applicable
provisions of prior laws.
"Collateral" shall mean all of the collateral security described or
provided for in Section 6 together with all property and/or rights on or in
which a Lien is now or hereafter granted by any Person 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 Guaranty, the Addendum and Affirmation Agreement and any other
instruments or documents provided for herein or therein or delivered hereunder
or thereunder or in connection herewith or therewith.
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"Collateral Ratio" shall mean, as to any Borrower, the ratio
of (a) the sum of
(i) the current market value of the common stock and/or PRIDES
of the Guarantor pledged by such Borrower to the Administrative Agent,
for the benefit of the Banks, under the Pledge Agreement, plus
(ii) the Borrower Collateral Percentage of the current market
value of the common stock of BLHC pledged under the Restated New CIHC
Shared Pledge Agreement, plus
(iii) the Borrower Collateral Percentage of the good faith
loan value of the Guaranty Collateral (other than BLHC stock) to
(b) the aggregate principal amount of the Loans of such Borrower then
outstanding. To evidence compliance with such ratio, upon the request of the
Administrative Agent or the Required Banks, the Borrowers shall cause the
Guarantor (on behalf of the Borrowers) to provide to the Administrative Agent,
for the benefit of the Banks, a computation of such ratio certified by its chief
financial officer or a vice president with responsibility for or knowledge of
financial matters of the Guarantor; provided, that with respect to the amount in
clause (iii), such amount shall be determined by the Administrative Agent (with
the concurrence of the Required Banks), and, upon such concurrence, provided to
the Guarantor by the Administrative Agent.
"Commitments" - see Section 2.1.
"Contingent Obligation" shall mean 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.
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"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.
"Defaulting Bank(s)" shall mean any Bank(s) with respect to which a
Bank Default is in effect.
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Effective Date" - see preamble.
"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).
"Event of Default" - see Section 10.1.
"Federal Funds Effective Rate" shall mean, for any day, the rate set
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New York
(including any such successor, "H.15(519)") on the preceding Business Day
opposite the caption "Federal Funds (Effective)"; or, if for any relevant day
such rate is not so published on any such preceding Business Day, the rate for
such day will be the arithmetic mean as determined by the Administrative Agent
of the rates for the last transaction in overnight Federal funds arranged prior
to 9:00 A.M. (New York City time) on that day by each of three leading brokers
of Federal funds transactions in New York City selected by the Administrative
Agent.
"FRB" shall mean the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal functions.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or 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.
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"Guarantor" shall mean Conseco, Inc., an Indiana
corporation.
"Guaranty" - see Section 6.1(b)
"Guaranty Collateral" shall mean any Collateral furnished by the
Guarantor and/or its Subsidiaries pursuant to Article IV of the Guaranty.
"IBOR" shall mean, as to any Borrower, the rate of interest per annum
(computed for the actual number of days elapsed on the basis of a 360-day year)
determined by the Administrative Agent as the rate at which dollar deposits in
the approximate amount of the Loans of such Borrower for an interest period of
one month would be offered by BofA's Grand Cayman Branch, Grand Cayman B.W.I.
(or such other office as may be designated for such purpose by BofA), to major
banks in the offshore dollar interbank market at their request at approximately
11:00 A.M. (New York City time) two (2) Business Days prior to the commencement
of such interest period.
"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 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, and Indebtedness 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
Indebtedness 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.
"Interest Payment Date" shall mean the last Business Day of each
calendar quarter.
"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.
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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 or the other Loan Documents.
"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 the Guarantor or any of its
Subsidiaries (including BLHC) or any of its or their businesses or operations.
"Loan(s)" see Section 2.1.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Guaranty, the Pledge Agreement, the Addendum and Affirmation Agreement 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.
"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 or condition of the Guarantor and its
Subsidiaries taken as a whole, or (c) materially impairs the ability of any
Borrower, Guarantor, New CIHC, MDSCG, BNL, CCM or CMCI to perform its
obligations under this Agreement or any of the other Loan Documents to which he,
she or it is a party, or (d) materially 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, (a) which
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) which could be reasonably
expected to have a Material Adverse Effect.
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"Minimum Interest Rate" shall mean, as to any Borrower, (a) if the
aggregate principal amount of Loans outstanding to such Borrower exceeds
$1,000,000, IBOR plus 1.00% per annum, and (b) if the aggregate principal amount
of Loans outstanding to such Borrower is less than or equal to $1,000,000, IBOR
plus 1.25% per annum. Such Minimum Interest Rate shall be calculated each
calendar quarter using the average IBOR over such quarterly period (based on
IBOR for each day during such quarterly period).
"Nonconsenting 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 Commitments 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.
"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.
"Pledge Agreement - see Section 6.1(a).
"Regulation "D," "G" and "U" shall mean Regulation D, Regulation G and
Regulation U, respectively, or any successor regulation thereto, promulgated by
the FRB as from time to time in effect.
"Replaced Bank" - see Section 5.4.
"Replacement Bank" - see Section 5.4.
"Required Banks" shall mean Banks (other than a Defaulting Bank) having
at least 51% of the Commitments (excluding the Commitment of any Defaulting
Bank) or, if the Commitments have terminated or expired, 51% of the aggregate
principal amount of the Loans outstanding at such time (excluding the Loans of
any Defaulting Bank).
"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 vice
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president. If 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 Agent" shall mean the Administrative Agent
(as defined in the Revolving Credit Agreement).
"Revolving Credit Agreement" shall mean that certain Credit Agreement,
dated as of August 31, 1995, as amended and restated as of April 12, 1996 (as
the same may be further amended or modified, the "Credit Agreement"), among the
Guarantor, the Revolving Credit Banks, The Chase Manhattan Bank, N.A. and First
Union National Bank of North Carolina, as Documentation Agents for the Revolving
Credit Banks, The Bank of New York, The Bank of Tokyo Trust Company, Credit
Lyonnais Cayman Island Branch, Deutsche Bank AG, New York Branch, Dresdner Bank
AG, New York Branch and/or Cayman Island Branch, ING Capital Corporation, The
Long-Term Credit Bank of Japan, Ltd., Chicago Branch, NationsBank, N.A. (South),
Fleet National Bank and Societe Generale, as Managing Agents for the Revolving
Credit Banks, and BofA, as administrative agent for the Revolving Credit Banks,
as amended or modified in accordance with the terms of this Agreement and the
Guaranty.
"Revolving Credit Bank(s)" shall mean the Bank(s) (as defined in the
Revolving Credit Agreement).
"Revolving Credit Loan Documents" shall mean the Loan
Documents (as defined in the Revolving Credit Agreement) .
"Solvent", as to any Person on a particular date, shall mean that on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including, without limitation, Contingent
Obligations, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liabilities of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, Contingent Obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that such Person will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities 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 after giving due
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consideration to the prevailing practice in the industry in which such Person is
engaged. For the purposes of this definition, in computing the amount of any
Contingent Obligation at any time, it is intended that such Contingent
Obligation will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Substitute Bank" - see Section 13.2.
"Termination Date" shall mean, as to any Borrower, the earlier of (a)
May 13, 2000, or (b) the date of termination in whole of the Commitments
pursuant to Section 4.1, 4.2 or 10.2.
"Transferee" - see Section 12.3.
"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.
SECTION 1.2 Other Definitional Provisions.
(a) Capitalized terms used but not otherwise defined herein
are used herein as defined in the Revolving Credit Agreement; provided
that such definitions shall survive any termination of the Revolving
Credit Agreement.
(b) 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.
(c) 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.
(d) 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.
(e) 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."
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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.
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 a term loan
(herein collectively called the "Loans" and individually called a "Loan") to the
Borrowers in the amounts set forth on Schedule 2.2 from the Effective Date until
the Borrowing Termination Date in such Bank's Percentage of the aggregate amount
of such Loans as the Borrowers may request from all Banks. The aggregate
principal amount of Loans which any Bank shall be committed to have outstanding
to the Borrowers shall not at any one time exceed the amount set opposite such
Bank's name on Schedule 2.1 and the aggregate principal amount of the Loans
which all Banks shall be committed to have outstanding hereunder to the
Borrowers shall not at any one time exceed $80,000,000 (or such reduced amount
as may be fixed pursuant to Sections 4.1, 4.2 and 10.2). The Loans to any
Borrower shall be disbursed in accordance with Section 2.2 and once repaid may
not thereafter be reborrowed. The foregoing commitment of each Bank is herein
called its "Commitment" and for all Banks the "Commitments."
SECTION 2.2 Procedure for Borrowings.
(a) Each Borrowing shall be made to each Borrower upon
irrevocable written notice (or by telephone promptly confirmed in writing) of
the Guarantor (on behalf of such Borrower) delivered to the Administrative Agent
in the form of a Notice of Borrowing (which notice must be received by the
Administrative Agent prior to 11:00 A.M. (Chicago time) on the requested
Borrowing Date) specifying:
(i) the amount of such Borrowing, which
shall be in an aggregate minimum amount of $1,000,000 for all
Borrowers requesting that a Borrowing be made pursuant to such
Notice of Borrowing or any integral multiple of $100,000 in
excess thereof; provided that the Borrowers, collectively,
shall not be entitled to
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make more than thirty (30) Borrowings hereunder in the
aggregate; and
(ii) the requested Borrowing Date, which
shall be a Business Day and the same Business Day for each
Borrower to which such Notice of Borrowing relates.
(b) The Administrative Agent will promptly notify each Bank of
its receipt of any Notice of Borrowing and of the amount of such Bank's
Percentage of the related Borrowing(s).
(c) Each Bank will make the amount of its Percentage of each
Borrowing available to the Administrative Agent for the account of each Borrower
requesting a Loan at the Administrative Agent's Office by 1:00 P.M. (Chicago
time) on the Borrowing Date requested by such Borrower in funds immediately
available to the Administrative Agent. The proceeds of all such Loans will then
be made available to such Borrower by the Administrative Agent by wire transfer
in accordance with written instructions provided to the Administrative Agent by
such Borrower of like funds as received by the Administrative Agent.
SECTION 2.3 Funding Reliance for Borrowings. Unless the Administrative
Agent shall have been notified by telephone, confirmed in writing, by any Bank
by 11:30 A.M. (Chicago time) on the relevant Borrowing Date that such Bank will
not make available the amount which would constitute its Percentage of the
related Borrowing(s), the Administrative Agent may assume, subject to the
satisfactory fulfillment by the Borrower requesting such Borrowing of the
conditions precedent set forth in Section 9, that such Bank shall make such
amount available to the Administrative Agent and, in reliance upon such
assumption the Administrative Agent may (but shall not be required to) make
available to such Borrower a corresponding amount. If and to the extent that
such Bank shall not make such amount available to the Administrative Agent, such
Bank and such Borrower severally agree to repay the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date the Administrative Agent made such amount available
to such Borrower to the date such amount is repaid to the Administrative Agent,
at the interest rate applicable at the time to such Borrowing; provided that if
such amount is repaid by such Borrower and such Bank the Administrative Agent
agrees to refund to such Borrower any excess amount paid by such Borrower; and
provided, further, that such Borrower, upon the request of the Administrative
Agent, agrees to return such refund to the Administrative Agent, on demand, in
the event the Administrative Agent is legally required to return any amount
received from such Bank.
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SECTION 2.4 Repayment of Loans. Subject to the provisions of Sections
4.1 and 4.2, 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 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 Commitments of the Banks to make 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 date, amount and
maturity of each Loan made by the Banks to such Borrower and 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
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 Borrowing Date of such
Loan until such Loan is paid in full at a rate per annum equal to the higher of
(a) the Minimum Interest Rate and (b) the Base Rate from time to time in effect
minus the applicable Base Rate Margin (as hereinafter defined). For purposes
hereof, the Base Rate Margin (the "Base
\25605\113\10DIRCON.012
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\25605\113\10DIRCON.012
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Rate Margin") shall be determined based on the aggregate unpaid principal amount
of the Loans outstanding of such Borrower from time to time as follows:
Principal Amount of
Loans Outstanding Base Rate Margin
- ------------------ -------------------
Greater than $1,000,000 1.750%
Less than or equal to $1,000,000 1.500%
Any adjustment in the Base Rate Margin as a result of a
change in the outstanding principal amount of the Loans of a Borrower
shall be effective upon a change in the outstanding principal amount of
the Loans of such Borrower; provided, that in no event will the Base
Rate Margin be increased at any time when a Default has occurred and is
continuing.
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 (other than pursuant to Section 10.1.2) 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 two
percent (2%) 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 or 4.2 for the portion of the
Loans so prepaid and upon payment (including prepayment) in full thereof and
during the existence 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 Computation of Interest. Interest on the Loans shall be
computed for the actual number of days elapsed on the basis of a 365-day year.
Each determination of an interest rate by the Administrative Agent shall be
conclusive and binding on
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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 Voluntary Termination or Reduction of Commitments. Each
Borrower may, upon not less than two (2) Business Days' irrevocable prior
written notice to the Administrative Agent (which shall promptly advise each
Bank thereof), terminate the Commitments of the Banks relating to such Borrower
or permanently reduce such Commitments by an aggregate minimum amount of
$100,000 or any integral multiple of $100,000 in excess thereof; unless, after
giving effect thereto and to any prepayments of Loans made on the effective date
thereof, the then outstanding principal amount of the Loans of such Borrower
would exceed the amount of the aggregate Commitments then in effect with respect
to such Borrower. Once reduced in accordance with this Section, such
Commitments, to the extent terminated or permanently reduced, may not be
increased. Any reduction of the Commitments of such Borrower pursuant to this
Section 4.1 shall be applied in accordance with Section 4.4.
SECTION 4.2 Optional Prepayments. Each Borrower may, at any time or from
time to time, upon not less than two (2) Business Day's irrevocable written
notice with respect to such Borrower's Loans to the Administrative Agent by
11:00 A.M. (Chicago time), ratably prepay such Loans in whole or in part, in
minimum amounts of $100,000 or any integral multiple of $100,000 in excess
thereof. Such notice of prepayment shall specify the date and amount of such
prepayment. 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. Any prepayment of the Loans of such Borrower pursuant to this
Section 4.2 shall be applied in accordance with Section 4.4 and shall reduce the
Commitments of the Banks with respect to such Borrower as set forth therein.
SECTION 4.3 Payments by the Borrowers.
(a) All payments to be made by any Borrower hereunder
shall be made without set-off, recoupment or counterclaim.
Except as otherwise expressly provided herein, all payments by
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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 12:30 P.M. (Chicago 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 12:30 P.M. (Chicago time) shall be deemed to have been received
on the following Business Day and any applicable interest shall continue to
accrue.
(b) 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.
(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 such amount distributed to such Bank, together
with interest thereon at the Federal Funds Effective Rate for each day from the
date such amount is distributed to such Bank until the date repaid.
SECTION 4.4 Application of Prepayments. Except as otherwise set forth in
this Agreement, any reduction in the Commitments pursuant to Sections 4.1 and
4.2 shall be applied to a reduction of the remaining Commitments and prepayment
of the Loans of each Bank, pro rata, according to its Percentage.
SECTION 4.5 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
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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 4.5(a) may, to the
fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.6) 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 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 4.5(b) to share in the benefits of any recovery of such secured
claim.
SECTION 4.6 Setoff. Each Bank shall, upon the occurrence of any Event of
Default under Section 10.1.1, the occurrence of a Default under Section 10.1.2,
or, with the consent of the Required Banks, upon the occurrence 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 4.5. 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 4.6 are in addition to
other rights and remedies
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(including other rights of setoff under applicable law or otherwise) which such
Bank may have.
SECTION 4.7 Net Payments. 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, other than Taxes imposed on or
measured by any Bank's net income or receipts (such non-excluded 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:
(a) pay directly to the relevant authority the
full amount required to be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority;
(c) 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
(d) 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 4.7, 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 4.7 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
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such refund to the relevant taxing authority or other
Governmental Authority.
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 4224
or Form 1001, as may be applicable (or any successor form), appropriately
completed. 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 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
Effective 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 (other than a Defaulting 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 (other than a
Defaulting 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 4.7, 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 (other than a Defaulting Bank) (or any Lending Office of such
Bank); or
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
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a cost on) such Bank (or any Lending Office of such Bank) 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 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.
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 (other than a Defaulting 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 the Borrower of any event occurring after the
Effective Date, which will entitle such Bank to compensation pursuant to this
Section 5.2.
SECTION 5.3 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.
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SECTION 5.4 Replacement of Banks. If any Bank shall become affected by
any of the changes or events described in Section 5.1 or 5.2 above (any such
Bank being hereinafter referred to as a "Replaced Bank") and shall petition the
relevant Borrowers for any increased cost or amounts thereunder, then in such
case, the Guarantor (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 lender (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 5.1 or 5.2 above, assign all
(but not less than all) of its rights, obligations, Loans and Commitment
hereunder; 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 5.4 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 5.1,
5.2, 11.5 and 13.4, and Sections 7.1 and 7.2 of the Guaranty while such Replaced
Bank was a Bank). Notwithstanding any Replaced Bank's failure or refusal to
assign its rights, obligations, Loans and Commitment under this Section 5.4, 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 5.4 without any
further action of the Replaced Bank.
SECTION 5.5 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of the Administrative Agent or any Bank pursuant
to Section 5.1 and Section 5.2 shall be conclusive absent demonstrable error.
The provisions of Sections 5.1, 5.2 and this Section 5.5 shall survive
termination of this Agreement.
SECTION 6. COLLATERAL AND OTHER SECURITY
SECTION 6.1 Collateral Documents. Concurrently with or prior to the
Closing Date:
(a) Pledge Agreement. The Borrowers shall execute and
deliver to the Administrative Agent, for the benefit of the
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Banks, a pledge agreement, substantially in the form of Exhibit C
(herein, as the same may be amended or modified, called the "Pledge
Agreement"), covering, among other things, all of the issued and
outstanding common stock of the Guarantor and/or PRIDES owned by each
Borrower and purchased with proceeds of the Loans.
(b) Guaranty. The Guarantor shall execute and deliver or cause
to be executed and delivered to the Administrative Agent (i) a guaranty,
substantially in the form of Exhibit D (herein, as the same may be
amended or modified, called the "Guaranty"), covering the payment and
performance of all of the Liabilities and (ii) the other documents
provided for in Article IV of the Guaranty.
SECTION 6.2 Application of Proceeds from Collateral.
(a) Borrower Collateral. As to each Borrower, all proceeds from
the sale or disposition of any of the Collateral furnished by such
Borrower pursuant to Section 6.1(a) shall be applied by the
Administrative Agent in the following order:
First: to the payment of all of the reasonable
costs and expenses of the Administrative Agent in connection
with (i) the administration, sale or disposition of such
Collateral, and (ii) the administration and enforcement of this
Agreement and the other Loan Documents, to the extent that such
costs and expenses shall not have been reimbursed to the
Administrative Agent;
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.
(b) Guaranty Collateral. All proceeds from the
sale or disposition of any Guaranty Collateral shall be applied
to the Additional Secured Borrower Obligations in the order set
forth in Section 6.2 of the Revolving Credit Agreement.
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SECTION 6.3 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 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 Collateral (free of all other Liens except as
permitted under this Agreement and the other Loan Documents and, with respect to
the Guaranty Collateral, the Revolving Credit Agreement) 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
the Lien of the Administrative Agent).
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
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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 Financial Statements. Such Borrower's financial statement as
at December 31, 1995, copies of which have been furnished to each Bank,
accurately present the financial condition of such Borrower at such date.
SECTION 7.4 Material Adverse Change. No Material Adverse Change has
occurred since December 31, 1995 as to such Borrower.
SECTION 7.5 Litigation and Contingent Obligations. No Material
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 7.6 Liens. None of the Collateral pledged by such Borrower is
subject to any Lien (except for the Lien of the Administrative Agent).
SECTION 7.7 Taxes. Such Borrower has filed all material Tax Returns and
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. There is no ongoing audit
or, to 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 7.8 Accuracy of Information. All factual information heretofore
or contemporaneously furnished 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 hereafter furnished 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 7.9 Proceeds. The proceeds of the Loans made to such Borrower
will be used solely to purchase common stock of the Guarantor and/or PRIDES.
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SECTION 7.10 Securities Laws. Neither such Borrower nor, to the best
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 that would subject
the making of the Loans or any other Liabilities to registration under the
Securities Act of 1933, as amended.
SECTION 7.11 Solvency. Such Borrower is and, after consummation of this
Agreement and after giving effect to all Indebtedness incurred by such Borrower
in connection herewith, will be, Solvent.
SECTION 7.12 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 might reasonably be
expected to have a Material Adverse Effect.
SECTION 7.13 Organization, etc. Each Borrower (other than any Borrower
which is an individual) is a partnership or irrevocable trust duly organized,
validly existing and, with respect to any partnership, in good standing under
the laws of the state of its formation and each partnership Borrower is duly
qualified to transact business as a foreign 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 7.14 Authorization. Each Borrower (other than Borrower which is
an individual) 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 8. COVENANTS OF BORROWERS
Each Borrower agrees that, on and after the Effective Date until the
termination or expiration of the Commitments 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:
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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. As soon as available,
but in any event within ninety (90) days after December
31 of each calendar year, 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 Loan Ratio. Upon the request of the Administrative Agent
or the Required Banks, cause the Guarantor (on behalf of the Borrowers)
to provide to the Administrative Agent, for the benefit of the Banks, a
computation of the ratio set forth in Sections 9.2.6 and 10.1.6
certified by its chief financial officer or a vice president with
responsibility for or knowledge of financial matters of the Guarantor;
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 its Taxes and
other material liabilities, except as contested in good faith and by appropriate
proceedings.
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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 is subject to the
performance by the Borrowers and the Guarantor of all of the obligations under
this Agreement and to the satisfaction of the following conditions precedent:
SECTION 9.1 Initial Loans. Prior to or concurrent with the making of the
initial 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 date of the initial Loans (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:
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 Commitments of the Banks
to make Loans to such Borrower;
9.1.2 The Pledge Agreement, together with (a) the stock
certificates evidencing all shares pledged under such Pledge Agreement,
and (b) 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 acknowledgements of the Lien of the Administrative
Agent on any applicable brokerage account of each Borrower;
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9.1.3 The Guaranty, together with the documents
provided in Article IV and Article VI of the Guaranty;
9.1.4 A favorable opinion of Lawrence W. Inlow, general counsel
of the Guarantor and its Subsidiaries (including BLHC), substantially in
the form of Exhibit E-1, and addressing such other legal matters as the
Administrative Agent may require;
9.1.5 A favorable opinion of Baker & Daniels, outside counsel to
the Guarantor and its Subsidiaries (including BLHC), substantially in
the form of Exhibit E-2, and addressing such other legal matters as the
Administrative Agent may require;
9.1.6 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 in full
force and effect, shall be 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;
9.1.7 A certificate of each Borrower certifying that since
December 31, 1995, no event has occurred which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect
as to such Borrower;
9.1.8 Schedules and Exhibits satisfactory to the
Administrative Agent and the Banks;
9.1.9 Evidence satisfactory to the Administrative
Agent of compliance by the Guarantor with Regulation G;
9.1.10 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 Collateral (free
of all other Liens except as permitted under this Agreement and the
other Loan Documents and, with respect to the Guaranty Collateral, the
Revolving Credit Agreement) (other than UCC financing statements to be
filed
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in connection with the Loan Documents which will be
delivered for filing on the Closing Date);
9.1.11 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; and
9.1.12 Such other information and documents as may reasonably be
required by the Administrative Agent and the Administrative Agent's
counsel.
9.1.13 Certified copies of any indemnification or similar
agreements or arrangements between any Borrower and the Guarantor relating to
the reimbursement by such Borrower of any payments made by the Guarantor under
the Guaranty, and certified copies of all documents and instruments relating to
the Conseco Stock Purchase Program (including, without limitation, any plan
relating thereto).
SECTION 9.2 All Loans. The obligation of the Banks to make Loans
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 Default (as defined under the Revolving Credit Agreement)
has occurred and is continuing;
9.2.3 The representations and warranties of the Borrowers
contained in Section 7, the representations and warranties of the
Guarantor, New CIHC, MDSCG, BNL, CCM and CMCI contained in Article III
of the Guaranty and the other Loan Documents are true and correct with
the same effect as though made on the Borrowing Date;
9.2.4 No Material Litigation exists; and
9.2.5 No Material Adverse Change has occurred
since December 31, 1995.
9.2.6 Collateral Ratio The Collateral Ratio for such Borrower is
at least 2.0 to 1.0.
9.2.7 A Federal Reserve Form U-1 for each Bank, duly executed by
each Borrower, the statements made in which shall be such, in the
opinion of the
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Administrative Agent, as to permit the transactions contemplated by this
Agreement in accordance with Regulation U.
SECTION 10. EVENTS 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 Non-Payment 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, the Guarantor
or any Significant Subsidiary becomes insolvent or generally fails to
pay, or admits in writing its inability to pay, debts as they become
due; or such Borrower, the Guarantor or any such Significant Subsidiary
applies for, consents to, or acquiesces in the appointment of, a
trustee, receiver or other custodian for such Borrower, the Guarantor or
such Significant Subsidiary 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, the Guarantor or such
Significant Subsidiary or for a substantial part of the property of such
Borrower, the Guarantor or such Significant Subsidiary 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, the
Guarantor or such Significant Subsidiary and if such case or proceeding
is not commenced by such Borrower, the Guarantor or such Significant
Subsidiary, it is consented to or acquiesced in by such Borrower, the
Guarantor or such Significant Subsidiary or remains for sixty (60) days
undismissed.
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10.1.3 Defaults Under this Agreement. Failure by such Borrower
or the Guarantor (or any of its Subsidiaries (including BLHC)) to comply
with or perform any of the covenants or agreements of such Borrower, the
Guarantor or any of its Subsidiaries set forth in this Agreement or the
other Loan Documents applicable to such Borrower, the Guarantor or any
of its Subsidiaries (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 and ten
(10) days with respect to the Guarantor, in each case after notice
thereof to such Borrower or the Guarantor, as the case may be, from the
Administrative Agent.
10.1.4 Representations and Warranties. Any representation or
warranty made by such Borrower or the Guarantor, New CIHC, MDSCG, BNL,
CCM or CMCI 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 or the Guarantor 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 Material Adverse Change. The occurrence of
any event which, in the reasonable judgment of the Required Banks,
constitutes a Material Adverse Change.
10.1.6 Collateral Ratio. The Collateral Ratio for
such Borrower is less than 1.5 to 1.0.
10.1.7 Default under Revolving Credit Agreement.
An event of default shall have occurred and be continuing under the
Revolving Credit Agreement.
SECTION 10.2 Effect of Event of Default. If any Event of Default
described in Section 10.1.2 shall occur and be continuing, the Commitments with
respect to such Borrower (or if such Event of Default relates to the Guarantor,
any Significant Subsidiary or Section 10.1.7, all Borrowers) (if they have not
theretofore terminated) shall immediately terminate and all Liabilities of such
Borrower 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 the Commitments of such Borrower (or if such Event of
Default relates to the Guarantor, any
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Significant Subsidiary or Section 10.1.7, all Borrowers) (if they have not
theretofore terminated) to be terminated and all Liabilities with respect to
such Borrower to be due and payable, whereupon the Commitments with respect to
such Borrower (or if such Event of Default relates to the Guarantor, any
Significant Subsidiary or Section 10.1.7, all Borrowers) (if they have not
theretofore terminated) shall immediately terminate and 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 as 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.
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 and,
with respect to the Collateral, the holders of the Senior Notes. 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 of its directors, officers, agents or employees
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
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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 the 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.
SECTION 11.3 Administrative Agent and Affiliates. With respect to the
Loans made by it, BofA 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 BofA in its
individual capacity. BofA 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, the Guarantor and any of its Subsidiaries
(including BLHC) and any Person who may do business with or own securities of
the Guarantor or any such Subsidiary, all as if BofA 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 the
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financial statements referred to in Section 7.3 hereof and Section 3.5 of the
Guaranty and such other 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 (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 or the other Loan Documents, or any
action taken or omitted by the Administrative Agent under this Agreement or the
other Loan Documents; 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 or
the other Loan Documents to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrowers or the Guarantor. 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 and the Borrowers, a successor agent from among the Banks.
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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 the Guarantor (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. Any such
assignment shall be pursuant to an assignment agreement, substantially
in the form of Exhibit G (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 Commitments, 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
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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 parties thereto,
(ii) the Assignment Agreement shall have
been acknowledged by the Administrative Agent,
(iii) either the assigning Bank or the
Eligible Assignee shall have paid a processing fee of $2,500 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 5.4 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.
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SECTION 12.2 Participations.
(a) Each Bank may grant participations in all or any part of its
Loans, Commitments and, if applicable, the Notes to any commercial bank
or other financial institution (other than insurance companies and
Affiliates thereof unless consented to by the Guarantor). 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 4.6. 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,
(iii) no participation shall relieve the
selling Bank of any of its other obligations hereunder
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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, the Guarantor
and its Subsidiaries (including BLHC) which has been delivered to such Bank by
such Borrower and the Guarantor 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 the Guarantor 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 F 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 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 F.
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,
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(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 4224 or U.S. Internal
Revenue Service Form 1001 (wherein such Transferee
claims entitlement to complete exemption from U.S.
federal withholding tax on all interest payments
hereunder), and
(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 4224 or Form 1001
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. 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 the Borrowers 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;
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(c) which would permit the release of all or any material
portion of the Collateral (including, without limitation, any material
portion of the Guaranty Collateral) shall be effective without the
consent of each Bank;
(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; or
(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.
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 "Nonconsenting Bank") then in such case, the
Guarantor (on behalf of the Borrowers) may, upon at least five (5) Business
Days' written notice to the Administrative Agent and such Nonconsenting Bank,
designate a substitute lender (a "Substitute Bank") acceptable to the
Administrative Agent in its sole discretion, to which such Nonconsenting Bank
shall assign all (but not less than all) of its rights and obligations under the
Loans and Commitment 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, 11.5 and 13.4, and Sections 7.1 and 7.2 of the 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 Nonconsenting 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 Nonconsenting Bank, the Borrowers may not require
one Bank to assign its rights and obligations to a Substitute Bank unless all
Nonconsenting Banks are required to make such an assignment. Notwithstanding any
Nonconsenting Bank's failure or refusal to assign its rights, obligations, Loans
and Commitment under this Section 13.2, the Nonconsenting Bank shall cease to be
a "Bank" for all purposes of this Agreement and the Substitute Bank substituted
therefor upon payment to the Nonconsenting Bank by the Substitute Bank of all
amounts set
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<PAGE>
forth in this Section 13.2 without any further action of the
Nonconsenting 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 acknowledgement 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, the
Borrowers and the 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
and, in the case of telex, the appropriate answerback 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,
provided, that notices to the Administrative Agent under Sections 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 and each Bank's 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,
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 and the Guarantor
provided for in this Section 13.4 shall survive termination of this Agreement.
SECTION 13.5 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 13.6 Captions. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.
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<PAGE>
SECTION 13.7 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE LOANS
SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. ALL OBLIGATIONS OF THE
BORROWERS AND THE GUARANTOR 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 13.8 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 Effective Date hereof, and at such time the Administrative Agent shall
notify the Borrowers and each Bank.
SECTION 13.9 SUBMISSION TO JURISDICTION; WAIVER OF VENUE. THE
ADMINISTRATIVE AGENT, EACH BANK AND EACH BORROWER (A) HEREBY IRREVOCABLY SUBMIT
TO THE JURISDICTION OF ANY ILLINOIS STATE OR FEDERAL COURT SITTING IN THE
NORTHERN DISTRICT OF ILLINOIS 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
ILLINOIS STATE OR FEDERAL COURT, AND (B) AGREE NOT TO INSTITUTE ANY LEGAL ACTION
OR PROCEEDING AGAINST ANOTHER PARTY OR THE DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS OR PROPERTY OF ANY THEREOF, ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENTS, IN ANY COURT OTHER THAN AS HEREINABOVE SPECIFIED IN
THIS SECTION 13.9. 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 13.9 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
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<PAGE>
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.
SECTION 13.10 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.
SECTION 13.11 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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<PAGE>
Executed as of the day and year first above written at Chicago,
Illinois.
BORROWERS:
/s/ STEPHEN C. HILBERT
-----------------------
Stephen C. Hilbert
Notice Address:
Address:
Attention:
Telephone:
<PAGE>
THOMAS C. HILBERT,
IRREVOCABLE TRUST
By:
/s/ STEPHEN C. HILBERT
-----------------------
Stephen C. Hilbert, Trustee
Notice Address:
Address:
Attention:
Telephone:
<PAGE>
CHRISTOPHER L. MYERS,
IRREVOCABLE TRUST
By:
/s/ STEPHEN C. HILBERT
-----------------------
Stephen C. Hilbert, Trustee
Notice Address:
Address:
Attention:
Telephone:
<PAGE>
ADMINISTRATIVE AGENT:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/
----------------------------
Name: ___________________________
Title: ___________________________
<PAGE>
BANKS:
BANK OF AMERICA ILLINOIS
By: /s/
----------------------------
Name: ___________________________
Title: ___________________________
Lending Office
Address: 231 S. LaSalle Street
Chicago, IL 60697
Attention: Debra Lacy
Telephone: (312) 828-1784
Facsimile: (312) 974-9626
Notice Address:
Address: 231 S. LaSalle Street
Chicago, IL 60697
Attention: Ron Drobny
Telephone: (312) 828-3014
Facsimile: (312) 828-0889
GUARANTY
Dated as of May 13, 1996,
among
CONSECO, INC.,
as Guarantor,
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
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<PAGE>
EXHIBITS
EXHIBIT A Form of Addendum and Affirmation Agreement
EXHIBIT B-1 Form of Opinion of Lawrence W. Inlow, general
counsel to the Guarantor and its Subsidiaries
(including BLHC)
EXHIBIT B-2 Form of Opinion of Baker & Daniels, outside
counsel to the Guarantor and its Subsidiaries
(including BLHC)
EXHIBIT C-1 Form of Officer's Certificate (Guarantor)
EXHIBIT C-2 Form of Officer's Certificate (New CIHC)
EXHIBIT C-3 Form of Officer's Certificate (MDSCG)
EXHIBIT C-4 Form of Officer's Certificate (BNL)
EXHIBIT C-5 Form of Officer's Certificate (CCM)
EXHIBIT C-6 Form of Officer's Certificate (CMCI)
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<PAGE>
GUARANTY
THIS GUARANTY (this "Guaranty") is entered into as of May 13, 1996
between CONSECO, INC., an Indiana corporation ("Guarantor"), in favor of BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative agent (the
"Administrative Agent") for the financial institutions (the "Banks" and together
with Administrative Agent, the "Guarantied 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.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of May 13, 1996 (as
from time to time, in whole or in part, the same may be amended, modified,
supplemented, restated, refinanced, refunded or renewed, the "Credit
Agreement"), among the individuals listed as borrowers on the signature pages
thereto (herein, collectively called, the "Borrowers" and each individually, a
"Borrower"), the Banks and the Administrative Agent, the Banks have extended
Commitments to make Loans to each of the Borrowers on the terms and subject to
the conditions contained in the Credit Agreement;
WHEREAS, the Guarantor has established a stock purchase program for
certain of its officers and directors to increase the Guarantor's ability to
attract and retain able officers and directors and, accordingly, promote the
interest of the Guarantor and its stockholders, while at the same time providing
these individuals with additional incentive to work toward the Guarantor's
future success;
WHEREAS, as a condition precedent to the making of the initial Loans
and any subsequent Loans under the Credit Agreement, Guarantor is required to
execute and deliver this Guaranty;
WHEREAS, Guarantor has been duly authorized to execute,
deliver and perform this Guaranty; and
WHEREAS, it is in the best interest of Guarantor to execute this
Guaranty inasmuch as Guarantor will derive substantial direct and indirect
benefits from the Loans made from time to time to the Borrowers by the Banks
pursuant to the Credit Agreement;
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<PAGE>
NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, and in order to induce the Banks to
make Loans (including the initial Loans) to the Borrowers pursuant to the Credit
Agreement, Guarantor 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 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):
"Addendum and Affirmation Agreement" - see Section 4.1(a).
"Administrative Agent" - see Preamble.
"Guaranty" shall mean this Guaranty, as amended or modified.
"Banks" or "Bank" - see Preamble.
"Borrowers" or "Borrower" - see first recital.
"Cash Collateral Account" shall mean the custody account, account
number 72-80556, maintained in the name of, and subject to the sole dominion and
control of, the Administrative Agent for the sole benefit of the Banks, for the
purpose of holding prepayments of the Obligations of the Borrowers by the
Guarantor pursuant to Section 7.1.
"Collateral" shall mean all of the collateral security described or
provided for in Article IV of this Guaranty together with all property and/or
rights on or in which a Lien is now or hereafter granted by any Person 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 this
Guaranty, the Pledge Agreement, the Addendum and Affirmation Agreement and any
other instruments or documents provided for herein or therein or delivered
hereunder or thereunder or in connection herewith or therewith.
"Credit Agreement" - see first recital.
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<PAGE>
"Guarantied Party" - see Preamble
"Guaranty" - see Preamble.
"Indemnified Parties" - see Section 8.2.
"Obligations" - see Section 2.1.
"Subrogation Rights" - see Section 2.6.
"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.
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 of each Borrower to the Guarantied
Parties, 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 Guarantied 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 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 or any holder of any Loan exercise any right, assert
any claim or demand
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<PAGE>
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 any Borrower, any other obligor with respect to the
Obligations of such Borrower, or Guarantor, as the case may be, or the inability
or failure of such Borrower, such other obligor or Guarantor to pay debts as
they become due, or an assignment by such Borrower, such other obligor or
Guarantor for the benefit of creditors, or the commencement of any case or
proceeding in respect of such Borrower, such other 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 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, all obligations of
Guarantor hereunder shall have been paid in full and all Commitments shall have
terminated. 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 Guarantied Party or any holder of the Note of any Borrower with
respect thereto. 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 Credit Agreement, any Note or any other Loan
Document;
(b) the failure of any Guarantied Party or any holder
of any Note:
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<PAGE>
(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 Agreement, any
Note, any other Loan Document 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 Agreement, any Note 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 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 Guarantied Party or any holder of any Note,
upon
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<PAGE>
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 Guarantied 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.
SECTION 2.6. Waiver of Subrogation; Subordination. Guarantor hereby
irrevocably waives with respect to any Borrower, until termination of the
Commitments of the Banks with respect to such Borrower and thereafter 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 or otherwise, including any right
of subrogation, reimbursement, exoneration, or indemnification, any right to
participate in any claim or remedy of the Guarantied 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, and the Commitments of the Banks with
respect to such Borrower have not been terminated, 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 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 is knowingly made in contemplation
of such benefits. Notwithstanding the foregoing, the Subrogation Rights of
Guarantor shall not include (and the
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Guarantor acknowledges that it has no interest in) any of the collateral pledged
by any of the Borrowers under the Pledge Agreement.
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 Guarantied 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 such Guarantor hereunder
shall be made in accordance with Section 4.7 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
Guarantied Party and each holder of a Loan 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, whether or not such Charges
were correctly or legally asserted.
(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 Guarantied 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 Guarantied Party or other holder of a Note shall upon
the occurrence of any Event of Default and whether or not such Guarantied Party
or such holder has made any demand or 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 Guaranty or any transaction hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; INCORPORATION BY REFERENCE
To induce the Guarantied Parties to enter into the Credit Agreement and
to make the Loans thereunder, Guarantor represents and warrants to each
Guarantied Party that:
SECTION 3.1. Organization, etc. Guarantor and each of its Subsidiaries
is a corporation, partnership or limited liability company duly organized,
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. Each of Guarantor, New CIHC, MDSCG, BNL,
CCM and CMCI (a) has (or, at the time of execution and delivery thereof, had)
the power to execute, deliver and perform this Guaranty and the other Loan
Documents to which it is a party, and (b) has (or, at the time of execution and
delivery thereof, had) 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
each of Guarantor, New CIHC, MDSCG, BNL, CCM and CMCI of this Guaranty and the
other Loan Documents to which it is a party did not, 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
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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 the Borrower or any of
its Subsidiaries or (d) contravene or conflict with any provision of the
articles of incorporation or by-laws of Guarantor, New CIHC, MDSCG, BNL, CCM or
CMCI.
SECTION 3.4. Margin Regulations.
(a) None of the transactions contemplated hereunder or in
connection herewith will in any way contravene or conflict with
any of the provisions of Regulation G or Regulation U;
(b) None of the obligations of any Borrower to the
Guarantor is or will be directly or indirectly secured by "margin
stock" (as defined in Regulation G and Regulation U);
(c) Neither the Guarantor nor any third party acting on behalf of the
Guarantor has taken or will take possession of any Borrower's "margin stock" (as
defined in Regulation G and Regulation U) to secure, directly or indirectly, any
of the obligations or the Borrowers or the Guarantor under any of the Loan
Documents;
(d) The 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 the Borrowers or the obligations of the Guarantor under
the Loan Documents remain outstanding;
(e) None of the Borrowers have granted or will grant the Guarantor or
any third party acting on behalf of the 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
the Guarantor or any third party acting on behalf of the 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 the Borrowers or the obligations of the
Guarantor under the Loan Documents remain outstanding) under which the margin
stock of such Borrower would be made more readily available as security to the
Guarantor than to other creditors of such Borrower.
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SECTION 3.5. Incorporation by Reference. Guarantor agrees that the
representations and warranties of Guarantor set forth in Section 7 of the
Revolving Credit Agreement (other than Sections 7.1, 7.2 and 7.3) shall be
incorporated by reference in this Guaranty in their entirety as if fully set
forth herein with the same effect as if applied to this Guaranty. All
capitalized terms set forth in such Sections shall have the meanings provided in
the Revolving Credit Agreement; provided that for purposes of this Guaranty, to
the extent set forth in the Revolving Credit Agreement (a) the term "Borrower"
shall be deemed to refer to Guarantor and (b) the terms "Administrative Agent",
"Agreement", "Banks", "Liabilities", "Required Banks", "Loan Documents",
"Collateral", "Material Adverse Effect", and "Material Adverse Change" shall
have the respective meanings provided in the Credit Agreement. Such
representations and warranties shall not be affected in any manner by the
termination of the Revolving Credit Agreement.
ARTICLE IV
COLLATERAL AND OTHER SECURITY
SECTION 4.1. Collateral Documents. Concurrently with or prior to the
Closing Date, the Guarantor shall execute and deliver, and cause each of New
CIHC, MDSCG, BNL, CCM and CMCI to execute and deliver, to the Administrative
Agent, for the benefit of the Banks, an Addendum and Affirmation to Loan
Documents, substantially in the form of Exhibit A (herein, as the same may be
amended or modified, called the "Addendum and Affirmation Agreement"), whereby
each of Guarantor, New CIHC, MDSCG, BNL, CCM and CMCI will amend the Pledge
Agreements and the Service Assignment (each as defined in the Revolving Credit
Agreement) to the extent a party thereto in order to grant a security interest
in the Collateral (as defined in the respective Pledge Agreements and the
Service Assignment) pledged pursuant to the Pledge Agreements and the Service
Assignment, respectively, to secure the obligations of the Guarantor under this
Guaranty (such obligations herein, as more fully set forth in Section 7.14,
sometimes called the Additional Secured Borrower Obligations or Additional
Secured Borrower Indebtedness.
SECTION 4.2. Application of Proceeds from Collateral. All proceeds from
the sale or disposition of any of the Collateral set forth in Section 4.1 shall
be applied to the Additional Secured Borrower Obligations in accordance with
Section 6.2 of the Credit Agreement.
SECTION 4.3. Further Assurances. Guarantor agrees that
upon request of the Administrative Agent (a) it shall promptly
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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 Collateral, and (b) it 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 Collateral to secure payment of the
Additional Secured Borrower Obligations.
ARTICLE V
COVENANTS
SECTION 5.1. Guarantor agrees that, on and after the Effective Date
until the termination or expiration of the Commitments and for so long
thereafter as any of the Obligations or the obligations of Guarantor hereunder
remain unpaid or outstanding (except Obligations which by the terms hereof
survive the payment in full of the Loans and termination of this Guaranty), the
Guarantor will comply with the covenants set forth Sections 8, 9 and 10 of the
Revolving Credit Agreement and the terms and provisions set forth therein shall
be incorporated by reference in this Guaranty in their entirety as if fully set
forth herein with the same effect as if applied to this Guaranty. All
capitalized terms set forth in Sections 8, 9 and 10 of the Revolving Credit
Agreement shall have the meanings provided in the Revolving Credit Agreement;
provided that for purposes of this Guaranty, to the extent set forth in the
Revolving Credit Agreement (a) the term "Borrower" shall be deemed to refer to
Guarantor and (b) the terms "Administrative Agent", "Agreement", "Banks",
"Liabilities", "Required Banks", "Loan Documents", "Collateral", "Material
Adverse Effect", and "Material Adverse Change" shall have the respective
meanings provided in the Credit Agreement. Such covenants shall not be affected
in any manner by the termination of the Revolving Credit Agreement.
SECTION 5.2. Certain Indebtedness. Guarantor shall not, and shall not
permit any of its Subsidiaries to amend or modify any provision of the Revolving
Credit Agreement, the Addendum and Affirmation Agreement or the other Revolving
Credit Loan Documents if such amendment or modification could have an adverse
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effect on the Banks or any material provision of the Loan
Documents.
SECTION 5.3. Margin Regulations. Guarantor shall take such actions from
time to time as the Administrative Agent shall reasonably request to maintain
continuous compliance with Regulation G and U.
ARTICLE VI
CONDITIONS AND EFFECTIVENESS OF
THIS AGREEMENT
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 the Guarantor of all of the obligations under this Agreement
and to the satisfaction of the following conditions precedent:
SECTION 6.1. Initial Loans. Prior to or concurrent with the making of
the initial Loans, the Administrative Agent shall have received all of the
following, each, except to the extent otherwise specified below, duly executed
by a Responsible Officer of Guarantor, dated the date of the initial Loans (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:
6.1.1. The Addendum and Affirmation Agreement;
6.1.2. A favorable opinion of Lawrence W. Inlow,
general counsel of the Guarantor and its Subsidiaries
(including BLHC), substantially in the form of Exhibit
B-1, and addressing such other legal matters as the
Administrative Agent may require;
6.1.3. A favorable opinion of Baker & Daniels, outside counsel
to the Guarantor and its Subsidiaries (including BLHC), substantially
in the form of Exhibit B-2, and addressing such other legal matters as
the Administrative Agent may require;
6.1.4. An officer's certificate of the Guarantor, New CIHC,
MDSCG, BNL, CCM and CMCI, substantially in the form of Exhibits C-1
through C-6, respectively, and dated as of the Closing Date, signed by
a Responsible Officer of the Guarantor, New CIHC, MDSCG, BNL, CCM and
CMCI, as the case may be, and attested to by the
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secretary thereof, together with certified copies of the Guarantor's,
New CIHC's, MDSCG's, BNL's, CCM's and CMCI's articles of incorporation,
by-laws and directors resolutions;
6.1.5. Evidence of the good standing or
certificates of compliance of the Guarantor, New CIHC,
MDSCG, BNL, CCM and CMCI in the jurisdiction in which
such entity was incorporated as of the Closing Date;
6.1.6. Evidence that the Guarantor paid to the
Administrative Agent the fees and expenses provided for
herein;
6.1.7. Evidence satisfactory to the Administrative
Agent of compliance by the Guarantor with Regulation G; and
6.1.8. Such other information and documents as
may reasonably be required by the Administrative Agent
and the Administrative Agent's counsel.
ARTICLE VII
SALE AND RELEASE OF PLEDGED SHARES; CASH COLLATERAL
SECTION 7.1. Sale of Pledged Shares. Notwithstanding any
provision set forth in any of the Loan Documents to the contrary, the
Administrative Agent agrees that after the occurrence and during the continuance
of a Default under Section 10.1.2 of the Credit Agreement or 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 7.2 and 7.4 below, it
will not demand that the Guarantor pay the Obligations of such Borrower
(constituting outstanding principal and interest of such Borrower), until after
the Administrative Agent has uses its reasonable best efforts, in good faith, to
sell the Pledged Shares of such Borrower, such sale to be consummated in one or
a series of open market transactions through one or more reputable
broker-dealers at the then fair market value of such Pledged Shares.
SECTION 7.2. Conditions. The obligation of the
Administrative Agent not to demand payment hereunder pursuant to
Section 7.1 is subject to the following conditions:
(a) the Guarantor, within three (3) Business Days after
receipt of written notice of a Borrower Default from the Administrative Agent,
shall deposit with the Administrative Agent
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in the Cash Collateral Account an amount equal to the then outstanding
Obligations of the Borrower related to such Borrower Default and, thereafter,
upon written notice from the Administrative Agent, the Guarantor continues to
deposit funds in the Cash Collateral Account in sufficient amounts to pay in
full any additional interest accrued on the Loans of such Borrower after the
date of the initial deposit to the Cash Collateral Account; and
(b) none of the following has occurred at the time of
such Borrower Default or shall occur thereafter:
(i) a suspension or material limitation in trading in
securities generally or trading in the common stock and/or
PRIDES of the Guarantor on the New York Stock Exchange;
(ii) a general moratorium on commercial banking
activities in New York is declared by any Federal or New York
State authorities;
(iii) the Administrative Agent is prohibited or
materially limited from selling the Pledged Shares as a result
of any federal or state securities laws (including, without
limitation, the rules promulgated thereunder relating to the
disclosure of material information); or
(iv) any other event (including, without limitation,
commencement of any suit, action or litigation, filing of any
claim or any other similar proceeding or any change in any
applicable law) has occurred which, in the reasonable opinion
of the Administrative Agent, would prohibit, have a material
adverse effect on, or materially limit the Administrative
Agent's ability to sell the Pledged Shares as contemplated by
the terms of this Section 7.1.
The Guarantor agrees that in any 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 (including, without limitation,
compliance with such procedures as may restrict the number of prospective
bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own
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account for investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchaser by any governmental regulatory authority or official, and the
Guarantor further agrees that such compliance shall not result in such sale
being considered or deemed not to have been made in a commercially reasonable
manner, nor shall the Administrative Agent be liable or accountable to the
Guarantor for any discount allowed by reason of the fact that such Pledged
Shares is sold in compliance with any such limitation or restriction.
The 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 the Guarantor or any Borrower.
Section 7.3. Release of Pledged Shares. The Administrative
Agent agrees that, so long as the Guarantor is in compliance with Section 7.2(a)
and none of the events set forth in Section 7.2(b) has occurred, it shall not
release any of the Pledged Shares of any Borrower from the Lien granted under
the Pledge Agreement until after the termination of this Guaranty and the
obligations of the Guarantor hereunder with respect to such Borrower.
Notwithstanding the foregoing, the Administrative Agent shall be entitled to
release the Pledged Shares of such Borrower if such Pledged Shares are replaced
by additional common stock of the Guarantor and/or PRIDES.
SECTION 7.4. Borrower Event of Default. The Guarantor hereby
acknowledges and agrees that Sections 7.1 and 7.3 shall not apply to any Default
or Event of Default relating to the Guarantor or any of its Subsidiaries and,
upon the occurrence of an Event of Default relating to the 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. Furthermore nothing contained herein shall be deemed to prohibit or
limit in any way whatsoever the Administrative Agent's or any Bank's right to
receive any portion of the Collateral (as defined under the Revolving Credit
Agreement) upon the exercise by the Revolving
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Credit Agent or the Revolving Credit Banks of their rights and remedies under
the Revolving Credit Loan Documents.
SECTION 7.5. Application of Cash Collateral. If after
compliance by the Administrative Agent with the provisions set forth in Section
7.1 any Obligations remain unpaid with respect to any applicable Borrower, any
funds held in the Cash Collateral Account may be applied by the Administrative
Agent against the payment of the Obligations of such Borrower. The
Administrative Agent, prior to applying such funds against the Obligations of
such Borrower, will certify to the Guarantor (a) if the Pledged Shares of such
Borrower are sold pursuant to Section 7.1, the net proceeds (including a
calculation thereof in reasonable detail) received by the Administrative Agent
from the sale of such Pledged Shares and (b) if the Pledged Shares of such
Borrower are not sold pursuant to Section 7.1, the reason or reasons why such
sale could not be accomplished. Any funds remaining in the Cash Collateral
Account after application thereof to the Obligations as set forth above shall be
returned to the Guarantor. The Administrative Agent agrees that it shall deliver
to the Guarantor, after the application of such funds to the Obligations of such
Borrower, a calculation in reasonable detail of the Obligations of such Borrower
(including principal and interest of the Loans of such Borrower) and the
application of such funds thereto.
ARTICLE VIII
MISCELLANEOUS
8.1. The 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:
(a) 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
(b) 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.
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The Guarantor further agrees to pay, and to save the Administrative Agent and
the Banks 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, this Guaranty or any other Loan Document.
The 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 the Guarantor provided for in this Section 8.1
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 8.1 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.
8.2. The Guarantor agrees to indemnify each Bank and each Bank's
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 Borrowers and the Guarantor provided for in this Section 8.2
shall survive termination of the Credit Agreement and this Guaranty.
8.3. 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 acknowledgement 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 the Guarantor.
Each such notice, request or other communication shall be effective (a) if given
by facsimile or telex, when such
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facsimile or telex is transmitted to the facsimile or telex number specified in
this Section and, in the case of telex, the appropriate answerback 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.
8.4. 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, nor otherwise pledge, encumber or grant any option with
respect to the Collateral, nor any part thereof, except in accordance with the
terms of the Credit Agreement.
8.5. EACH OF GUARANTOR AND THE ADMINISTRATIVE AGENT (I) HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY ILLINOIS STATE OR FEDERAL COURT
SITTING IN THE NORTHERN DISTRICT OF ILLINOIS 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 ILLINOIS STATE OR FEDERAL COURT, AND (II) AGREES NOT TO INSTITUTE ANY
LEGAL ACTION OR PROCEEDING AGAINST THE OTHER PARTY HERETO OR THE DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR PROPERTY OF ANY THEREOF, ARISING OUT OF OR
RELATING TO THIS GUARANTY, IN ANY COURT OTHER THAN AS HEREINABOVE SPECIFIED IN
THIS SECTION 8.5. 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 HEREINABOVE SPECIFIED IN THIS SECTION
8.5 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 THE 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.
8.6. Subject to Section 13.1 of 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 (at the request of the Required
Banks), and then any such amendment, modification, waiver or consent shall be
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effective only in the specific instance and for the specific
purpose for which given.
8.7. 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.
8.8. 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.
8.9. 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.
8.10. 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 THE BORROWERS AND THE GUARANTOR
AND RIGHTS OF THE ADMINISTRATIVE AGENT AND THE BANKS IN RESPECT OF THE
OBLIGATIONS AND THE OBLIGATIONS OF THE GUARANTOR EXPRESSED HEREIN OR IN THE
OTHER LOAN DOCUMENTS SHALL BE IN ADDITION TO AND NOT IN LIMITATION OF THOSE
PROVIDED BY APPLICABLE LAW.
8.11. 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.
8.12. The Administrative Agent acts herein as agent
for itself, the Banks and any and all future holders of the
Obligations.
8.13. WAIVER OF JURY TRIAL. 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.
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8.14. Additional Secured Borrower Obligations; Additional
Secured Borrower Indebtedness. Guarantor agrees and acknowledges that for
purposes of the Revolving Credit Loan Documents, each reference to Additional
Secured Borrower Obligations and Additional Secured Borrower Indebtedness
thereunder shall be deemed to refer to any and all obligations of the Guarantor
hereunder however 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, and each reference to any or all such obligations of the
Guarantor hereunder shall be deemed to refer to the Additional Secured Borrower
Obligations and the Additional Secured Borrower Indebtedness thereunder.
* * *
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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.
CONSECO, INC.
By:/s/ ROLLIN M. DICK
---------------------
Name:Rollin M. Dick
Title:Executive Vice President
and Chief Financial Officer
BORROWER PLEDGE AGREEMENT
dated as of May 13, 1996
among
THE INDIVIDUALS LISTED ON THE SIGNATURE PAGES HERETO
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
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BORROWER PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of May 13,
1996, is made among the individuals listed as pledgors on the signature pages
hereto (herein, collectively called the "Pledgors" and each individually, a
"Pledgor"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Administrative Agent for the Banks (each as hereinafter defined). This is the
Borrower Pledge Agreement referred to in that certain Credit Agreement (as from
time to time, in whole or in part, amended, modified, supplemented, restated,
refinanced, refunded or renewed, the "Credit Agreement"), dated as of May 13,
1996, among the Pledgors, the financial institutions who are or from time to
time become party thereto (the "Banks") and Bank of America National Trust and
Savings Association, as Administrative Agent for the Banks (the "Administrative
Agent").
BACKGROUND:
1. Pursuant to the terms of the Credit Agreement, the Banks
have agreed to make certain Loans to each Pledgor which shall be used by such
Pledgor as provided in the Credit Agreement.
2. As security for the Loans and as a condition precedent to
the making thereof, the Banks have required that each Pledgor execute and
deliver this Agreement.
NOW, THEREFORE, in consideration of any Loan or other
financial accommodation heretofore or hereafter at any time made or granted by
the Banks to the Pledgors and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Pledgor agrees
with the Administrative Agent, for the benefit of the Banks, as follows:
SECTION 1 Definitions. Capitalized terms used herein, unless
otherwise specified, shall have the 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:
"Collateral" - see Section 2.
"Indemnified Liabilities" - see Section
7(b)(vi).
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"Issuer" shall mean Conseco, Inc., an Indiana
corporation.
"Permitted Actions" - see Section 5(b).
"Pledged Shares" - see Section 2.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of Illinois.
SECTION 2 Pledge. To secure the prompt and complete payment
and performance of the respective Liabilities of each such Pledgor, such Pledgor
hereby grants, pledges, hypothecates, assigns, transfers, sets over and delivers
unto the Administrative Agent, for the benefit of the Banks, a Lien on the
following (herein collectively called the "Collateral"):
(a) the shares of capital stock of the Issuer described in
Schedule 1 hereto, whether in certificated form or otherwise, including
the certificates representing or evidencing such shares of capital
stock (herein called the "Pledged Shares"), together with all cash,
securities, interests, dividends, rights, notes, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Pledged
Shares;
(b) all additional shares of capital stock of the Issuer from
time to time acquired by the Pledgor and purchased with proceeds of the
Loans including, without limitation, any uncertificated Securities
(which additional shares of capital stock shall constitute a part of,
and be, "Pledged Shares"), and, in the case of certificated capital
stock of the Issuer, the certificates representing or evidencing such
additional shares, together with all cash, securities, interest,
dividends, rights, notes, instruments and other property at any time
and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such additional shares;
(c) all other property hereafter delivered to the
Administrative Agent in substitution for or in addition to any of the
foregoing, and all certificates and instruments representing or
evidencing such other property, together with all cash, securities,
interest, dividends, rights and
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other property at any time and from time to time
received, receivable or otherwise distributed in
respect of or in exchange for any or all thereof; and
(d) all proceeds, rents, issues, profits and
returns of and from all of the foregoing;
TO HAVE AND TO HOLD the Collateral, together with all rights, titles, interests,
privileges and preferences appertaining or incidental thereto, unto the
Administrative Agent, its successors and assigns, for the benefit of the Banks,
forever; subject, however, to the terms, covenants and conditions hereafter set
forth.
Each Pledgor agrees to deliver to the Administrative Agent,
promptly upon receipt and in the case of the Pledged Shares in due form for
transfer (i.e., endorsed in blank accompanied by undated stock or bond powers
executed in blank or registered on the books of the Issuer) and, subject to the
provisions of Section 6 hereof, any Collateral which may at any time or from
time to time be in or come into possession or control of any Pledgor; and prior
to the delivery thereof to the Administrative Agent, such Collateral shall be
held by such Pledgor separate and apart from its other property and in express
trust for the Administrative Agent, for the benefit of the Banks.
SECTION 3 Representations, Warranties and Covenants.
(a) Each Pledgor represents and warrants to the Administrative
Agent, for the benefit of the Banks, that: (i) except for Liens, claims and
rights of third parties arising solely through acts of the Administrative Agent,
the Administrative Agent has and will continue to have at all times as security
for the Liabilities of such Pledgor, for the benefit of the Banks, a valid,
first priority perfected Lien on the Collateral pledged by such Pledgor and the
proceeds thereof free of all Liens (except for the Lien granted hereunder),
claims and rights of third parties whatsoever; (ii) all of the Pledged Shares of
such Pledgor representing shares of stock pledged under this Agreement are
evidenced by certificates, and such Pledgor has delivered to the Administrative
Agent, for the benefit of the Banks, for pledge under this Agreement on the date
hereof all of the certificates representing all such Pledged Shares; (iii) the
Pledged Shares of such Pledgor represent and will continue to represent all of
the issued and outstanding capital stock of the Issuer purchased with proceeds
of the Loans made to such Pledgor; and (iv) such Pledgor will, at all times,
keep pledged to the Administrative Agent, for the benefit of the Banks, pursuant
hereto all of the capital stock
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of the Issuer of such Pledgor purchased with proceeds of the Loans made to such
Pledgor.
Each Pledgor agrees to endorse and deliver to the
Administrative Agent for pledge hereunder, promptly upon its obtaining any
thereof, any additional Collateral and to hold such Collateral, pending such
delivery, in trust for the Administrative Agent, for the benefit of the Banks,
separate and distinct from any other property of such Pledgor. As of the date of
any such delivery of additional Collateral, certificates or instruments to the
Administrative Agent, such Pledgor represents and warrants that (1) it will own
such Collateral, certificates and instruments free and clear of any rights of
any other Person (other than the rights created in the Administrative Agent
hereunder), (2) it will have good and marketable title to said Collateral,
certificates and instruments and have the right to pledge such Collateral,
certificates and instruments to the Administrative Agent, for the benefit of the
Banks, pursuant to this Agreement, and (3) it will have pledged to the
Administrative Agent, for the benefit of the Banks, as at such date, all of the
capital stock of the Issuer purchased with proceeds of the Loans made to such
Pledgor. By the delivery of any additional Collateral, certificates or
instruments, such Pledgor shall automatically be deemed to have represented and
warranted to the Administrative Agent, for the benefit of the Banks, that at the
time of such delivery the Administrative Agent, for the benefit of the Banks,
has a valid, first priority perfected Lien on such Collateral, certificates or
instruments and the proceeds thereof free of all Liens, claims and rights of
third parties whatsoever. All documentary, stamp and other taxes and fees owing
in connection with the issuance, transfer and/or pledge of the Pledged Shares of
such Pledgor, certificates or instruments have been paid and will hereafter be
paid by such Pledgor as such become due and payable.
(b) Each Pledgor further represents and warrants to the
Administrative Agent, for the benefit of the Banks, that it is the lawful owner
of the Collateral pledged by such Pledgor, free of all Liens, other than the
Lien granted hereunder, with full right to deliver, pledge, assign and transfer
such Collateral to the Administrative Agent, for the benefit of the Banks, as
Collateral hereunder. The pledge of the Collateral of such Pledgor effected by
this Agreement is effective to vest in the Administrative Agent, for the benefit
of the Banks, the rights of the Administrative Agent in such Collateral set
forth herein.
(c) Each Pledgor additionally represents and warrants
to the Administrative Agent, for the benefit of the Banks, that
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(i) such Pledgor has received all material consents and approvals (if any shall
be required) necessary for the execution, delivery and performance of this
Agreement, and such execution, delivery and performance does not and will not
contravene or conflict with, result in any breach of, or constitute a default
under, any material agreement or instrument binding on such Pledgor or result in
the creation or imposition of or the obligation to create or impose any Lien
(except for the Lien granted hereunder) on any of the Collateral pledged by such
Pledgor and (ii) this Agreement is the legal, valid and binding obligation of
such Pledgor, enforceable against such Pledgor in accordance with its terms,
except to the extent such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws affecting the enforcement of creditors' rights generally and by the
effect of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity (including, without limitation, good faith,
materiality and reasonableness) or at law).
(d) Each Pledgor additionally covenants and agrees with the
Administrative Agent, for the benefit of the Banks, that, until the expiration
or termination of the Commitments as to such Pledgor and thereafter so long as
any of the Liabilities of such Pledgor remain outstanding, such Pledgor will,
unless the Administrative Agent and the Required Banks, for the benefit of the
Banks, shall otherwise consent in writing:
(i) at such Pledgor's sole expense, promptly deliver to the
Administrative Agent, from time to time, upon request of the
Administrative Agent or the Required Banks, such stock powers and other
documents (including UCC financing statements), satisfactory in form
and substance to the Administrative Agent, with respect to the
Collateral pledged by such Pledgor as the Administrative Agent or the
Required Banks may reasonably request, to perfect, preserve and protect
the Lien created hereby, and to enable the Administrative Agent to
enforce its rights and remedies hereunder;
(ii) not permit any of the Collateral pledged by such Pledgor
to be evidenced by uncertificated securities, provided, however, that
should for whatsoever reason any of such Collateral become evidenced by
uncertificated Securities, such Pledgor shall automatically, without
request by the Administrative Agent, forthwith (A) notify the
Administrative Agent thereof, (B) cause the books and records of the
Issuer to contain a notation of the
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Lien of the Administrative Agent, for the benefit of the Banks,
thereon, and (C) take such other action as the Administrative Agent
shall reasonably request so that the Administrative Agent shall have at
all times as security for the Liabilities of such Pledgor, for the
benefit of the Banks, a valid, first priority perfected Lien on the
Collateral pledged by such Pledgor and the proceeds thereof free of all
Liens (except for the Lien granted hereunder), claims and rights of
third parties whatsoever; and
(iii) except as otherwise may be permitted by the Credit
Agreement, (A) not sell, assign, exchange, pledge or otherwise dispose
of or transfer any of its rights to any of the Collateral pledged by
such Pledgor, (B) not create or suffer to exist any Lien on or with
respect to any of such Collateral except for the Lien created hereby,
(C) not make or consent to any amendment or other modification or
waiver with respect to any of such Collateral, or enter into any
agreement or permit to exist any restriction with respect to any of
such Collateral other than pursuant hereto, and (D) not take or fail to
take any action which would in any manner impair the enforceability of
the Administrative Agent's Lien, for the benefit of the Banks, on any
of such Collateral.
SECTION 4 Care of Collateral. The Administrative Agent shall
exercise reasonable care in the custody and preservation of the Collateral. In
addition, the Administrative Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral pledged by any Pledgor if
it takes such action for that purpose as such Pledgor requests in writing, but
failure of the Administrative Agent to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of the
Administrative Agent to preserve or protect any rights with respect to such
Collateral against prior or other parties, or to do any act with respect to
preservation of such Collateral not so requested by the Pledgor, shall be deemed
a failure to exercise reasonable care in the custody or preservation of such
Collateral.
SECTION 5 Certain Rights Regarding Collateral and
Liabilities.
(a) Subject to Sections 5(c) and 6 hereof the Administrative
Agent may, and upon the request of the Required Banks shall, from time to time,
after the occurrence and during
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the continuance of a Default pursuant to Section 10.1.2 of the Credit Agreement
as a Pledgor or an Event of Default as to such Pledgor, without notice to such
Pledgor, (i) transfer all or any part of the Collateral pledged by such Pledgor
into the name of the Administrative Agent or its nominee or sub-agent, with or
without disclosing that such Collateral is subject to the Lien hereunder, (ii)
notify any Person obligated on any of the Collateral of such Pledgor to make
payment to the Administrative Agent of any amounts due or to become due
thereunder, and (iii) enforce collection of any of the Collateral pledged by
such Pledgor by suit or otherwise.
(b) If at any time the Administrative Agent takes any or all
of the Permitted Actions (as hereinafter defined) whether such actions are taken
before or after any of the Liabilities of such Pledgor shall be due and payable
and without notice to such Pledgor, such actions shall not affect the
enforceability of this Agreement. The Administrative Agent shall have taken a
"Permitted Action" if it shall (to the extent permitted by the Credit Agreement
and the other Loan Documents): (i) retain or obtain a Lien upon any property to
secure payment and performance of any of the Liabilities or any obligation
hereunder, (ii) retain, obtain or release the primary or secondary obligation of
any Person, in addition to such Pledgor, with respect to one or more of the
Liabilities, (iii) create, extend or renew for any periods (whether or not
longer than the original period) or alter or exchange any of the Liabilities, or
release or compromise any obligation of any nature of any Person with respect to
any of the Liabilities, (iv) release or fail to perfect its Lien upon, or
impair, surrender, release or permit any substitution or exchange for, all or
any part of any property securing any of the Liabilities or any obligation
hereunder, or create, extend or renew for one or more periods (whether or not
longer than the original period) or release, compromise, alter or exchange any
obligations of any nature of any Person with respect to any such property or (v)
resort to the Collateral pledged by such Pledgor for payment of any of the
Liabilities of such Pledgor whether or not the Administrative Agent (A) shall
have resorted to any other property securing any of the Liabilities of such
Pledgor or any obligation hereunder or (B) shall have proceeded against any
Person primarily or secondarily obligated with respect to any of the Liabilities
of such Pledgor (all of the actions referred to in preceding clauses (A) and (B)
being hereby expressly waived by each Pledgor).
(c) The Administrative Agent shall have no right to vote the
Pledged Shares or other Collateral of any Pledgor or give consents, waivers or
ratifications in respect thereof prior to the occurrence and during the
continuance of a Default
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pursuant to Section 10.1.2 of the Credit Agreement as to such Pledgor or an
Event of Default as to such Pledgor. After the occurrence and during the
continuance of a Default pursuant to Section 10.1.2 of the Credit Agreement as
to such Pledgor or an Event of Default as to such Pledgor, such Pledgor shall
have the right to vote any and all of the Pledged Shares and other Collateral of
such Pledgor and give consents, waivers and ratifications in respect thereof
unless and until it receives notice from the Administrative Agent that such
right has been terminated. Each Pledgor agrees to deliver (properly endorsed
when required) to the Administrative Agent, after a Default pursuant to Section
10.1.2 of the Credit Agreement as to such Pledgor or an Event of Default as to
such Pledgor shall have occurred and shall be continuing, promptly upon request
of the Administrative Agent, such proxies and other documents as may be
necessary for the Administrative Agent to exercise the voting power with respect
to the Pledged Shares and other Collateral of such Pledgor then or previously
owned by such Pledgor.
SECTION 6 Dividends, etc.
(a) So long as no Default pursuant to Section 10.1.2 of the
Credit Agreement as to a particular Pledgor or an Event of Default as to such
Pledgor shall have occurred and shall be continuing:
(i) Subject to the provisions of the Credit Agreement and
notwithstanding the provisions of Section 2(a) of this Agreement, such
Pledgor shall be entitled to receive any and all cash dividends and
payments on the Collateral pledged by such Pledgor which it is
otherwise entitled to receive, but any and all capital stock and/or
liquidating dividends, payments, distributions in property, returns of
capital made on or in respect of the Collateral pledged by such
Pledgor, whether resulting from a subdivision, combination,
reclassification or conversion of the outstanding capital stock of the
Issuer, or received in exchange for such Collateral or any part
thereof, or as a result of any merger, consolidation, acquisition or
other exchange of assets to which the Issuer may be a party or
otherwise, and any and all cash and other property received in exchange
for such Collateral shall be and become part of the Collateral pledged
hereunder and, if received by such Pledgor, shall forthwith be
delivered to the Administrative Agent or its designated nominee
(accompanied, if appropriate, by proper instruments of assignment
and/or stock powers executed by such Pledgor in accordance with the
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Administrative Agent's instructions) to be held subject to the terms of
this Agreement.
(ii) If the Collateral pledged by any Pledgor or any part
thereof shall have been registered in the name of the Administrative
Agent or its sub-agent, the Administrative Agent shall execute and
deliver (or cause to be executed and delivered) to such Pledgor all
such dividend orders and other instruments as such Pledgor may request
for the purpose of enabling such Pledgor to receive the dividends or
other payments which it is authorized to receive and retain pursuant to
Section 6(a)(i) above.
(b) Upon the occurrence and during the continuance of a
Default pursuant to Section 10.1.2 of the Credit Agreement as to Pledgor or an
Event of Default as to such Pledgor, all rights of such Pledgor pursuant to
Section 6(a)(i) hereof shall cease and the Administrative Agent shall have the
sole and exclusive right and authority to receive and retain the dividends and
other payments in respect of the Collateral which such Pledgor would otherwise
be authorized to retain. All such dividends and payments, and all other
distributions made on or in respect of the Collateral which may at any time and
from time to time be held by such Pledgor, shall, until delivery to the
Administrative Agent, be held by such Pledgor separate and apart from its other
property in trust for the Administrative Agent, for the benefit of the Banks.
Any and all money and other property paid over to or received by the
Administrative Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Administrative Agent as additional Collateral hereunder and be
applied in accordance with the provisions hereof and until delivery to the
Administrative Agent, shall be held by such Pledgor separate and apart from its
other property in trust for the Administrative Agent, for the benefit of the
Banks.
SECTION 7 Default.
(a) Upon the occurrence and during the continuance of a
Default pursuant to Section 10.1.2 of the Credit Agreement as to Pledgor or an
Event of Default as to such Pledgor, the Administrative Agent may exercise from
time to time any rights and remedies available to it under the Credit Agreement,
the Uniform Commercial Code or the other Loan Documents or otherwise available
to it, including, without limitation, sale, assignment, or other disposal of the
Collateral pledged by such Pledgor in exchange for cash or credit. If any
notification of intended disposition of any of such Collateral is required by
law, such notification, if mailed, shall be deemed reasonably
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and properly given if mailed to such Pledgor at least ten (10) days before such
disposition as provided in Section 13.3 of the Credit Agreement. Any proceeds of
any disposition of Collateral pledged by such Pledgor shall be applied as
provided in Section 8 hereof. No rights and remedies of the Administrative Agent
expressed hereunder are intended to be exclusive of any other right or remedy,
but every such right or remedy shall be cumulative and shall be in addition to
all other rights and remedies herein conferred, or conferred upon the
Administrative Agent under any other agreement or instrument relating to any of
the Liabilities of such Pledgor or security therefor or now or hereafter
existing at law or in equity or by statute. No delay on the part of the
Administrative Agent in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by the Administrative Agent of
any right or remedy shall preclude any other or further exercise thereof or the
exercise of any other right or remedy.
(b)(i) Each Pledgor agrees that in any sale of any of the
Collateral pledged by such Pledgor, 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 order to avoid any
violation of applicable law (including, without limitation, compliance with such
procedures as may restrict the number of prospective bidders and purchasers,
require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such
Collateral), or in order to obtain any required approval of the sale or of the
purchaser by any governmental regulatory authority or official, and such Pledgor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent nor any Bank be liable or accountable to such
Pledgor for any discount allowed by reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.
(iv) Each Pledgor, upon the occurrence and during the
continuance of a Default under Section 10.1.2 of the Credit Agreement as to such
Pledgor or an Event of Default as to such Pledgor, further agrees that the
Administrative Agent shall have the right, for and in the name, place and stead
of such Pledgor to execute endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or any of the
Collateral pledged by such Pledgor, and may, without demand, presentment or
notice of any kind appropriate and apply toward the payment of the Liabilities
of such Pledgor in order
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of application set forth in Section 8 any balances, credits, deposits, accounts
or monies of such Pledgor held by the Administrative Agent.
(v) Without limiting the foregoing paragraph, upon the
occurrence and during the continuance of a Default pursuant to Section 10.1.2 of
the Credit Agreement as to such Pledgor or an Event of Default as to such
Pledgor, the Administrative Agent may, to the fullest extent permitted by
applicable law, without notice, advertisement, hearing or process of law of any
kind, (A) sell any or all of the Collateral, free of all rights and claims of
such Pledgor therein and thereto at any public or private sale or brokers'
board, and (B) bid for and purchase any or all of such Collateral at any such
public sale free from rights of redemption, stay or appraisal of such Pledgor.
SECTION 8 Application of Proceeds. All of the proceeds from
the sale or disposition of any item of the Collateral pledged by the Pledgors
pursuant to the terms of Section 7 hereof and/or, after a Default pursuant to
Section 10.1.2 of the Credit Agreement as to such Pledgor or an Event of Default
as to such Pledgor, the cash held as Collateral hereunder, shall be applied by
the Administrative Agent pursuant to Section 6.2(a) of the Credit Agreement.
SECTION 9 Authority of the Administrative Agent. The
Administrative Agent shall have, and be entitled to exercise, all such powers
hereunder (to the extent permitted by the Credit Agreement) as are specifically
delegated to the Administrative Agent by the terms hereof, together with such
powers as are incidental thereto, for the benefit of the Banks. As to matters
not expressly provided for by this Agreement (including, without limitation,
enforcement or collection of this Agreement) 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. The Administrative Agent may execute any of its
duties hereunder by or through agents or employees and shall be entitled to
retain counsel and to act in reliance upon the reasonable advice of such counsel
concerning all matters pertaining to its duties hereunder. Neither the
Administrative Agent, the Banks nor any director, officer or employee thereof
shall be liable for any action taken or omitted to be taken by it hereunder or
in connection herewith, except for its own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the Administrative
Agent shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
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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; provided that notwithstanding the
foregoing, the Administrative Agent shall comply with Section 4. Each Pledgor
agrees to reimburse the Administrative Agent, on demand, for all reasonable
costs and expenses actually incurred by the Administrative Agent in connection
with the administration and enforcement of this Agreement and for all costs and
expenses of the enforcement of this Agreement (including, without limitation,
reasonable costs and expenses actually incurred by any agent employed by the
Administrative Agent) and agrees to indemnify (which indemnification shall
survive any termination of this Agreement) and hold harmless the Administrative
Agent and the Banks (and any such agent) from and against any and all liability
incurred by the Administrative Agent or any Bank or any such agent thereof
hereunder or in connection herewith, unless such liability shall be due to gross
negligence or willful misconduct on the part of the Administrative Agent or any
Bank or such agent, as the case may be.
SECTION 10 Termination. Each Pledgor agrees that its pledge
hereunder shall (notwithstanding, without limitation, that at any time or from
time to time all Liabilities of such Pledgor may have been paid in full)
terminate only when all such Liabilities (except such Liabilities which by the
terms of the Credit Agreement survive the payment in full of the Loans and the
termination of this Agreement) (including, without limitation, any extensions or
renewals of any thereof) and all expenses (including, without limitation,
reasonable attorneys' fees and legal expenses) paid or actually incurred by the
Administrative Agent in endeavoring to enforce this Agreement, the Credit
Agreement and the other Loan Documents to which the Administrative Agent is a
party or of which it is a beneficiary shall have been finally paid in full and
all other obligations of such Pledgor hereunder and thereunder have been fully
performed, and all Commitments under the Credit Agreement have been terminated,
at which time the Administrative Agent shall reassign and redeliver (or cause to
be reassigned and redelivered) to such Pledgor, or to such Person or Persons as
such Pledgor shall designate, such of the Collateral (if any) as shall not have
been sold or otherwise applied by the Administrative Agent pursuant to the terms
hereof and shall still be held by it hereunder, together with appropriate
instruments of reassignment and release. Any such reassignment shall be without
recourse upon, or representation or warranty by, the Administrative Agent or any
Bank and at the sole cost and expense of such Pledgor.
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SECTION 11 Miscellaneous.
(a) All notices or other communications hereunder shall be
given in the manner specified under Section 13.3 of the Credit Agreement,
whether or not then in effect.
(b) 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 the Pledgors shall not be
permitted to assign this Agreement nor any interest herein nor in the Collateral
pledged by such Pledgor, nor any part thereof, nor otherwise pledge, encumber or
grant any option with respect to such Collateral, nor any part thereof, except
in accordance with the terms of the Credit Agreement.
(c) SUBMISSION TO JURISDICTION; WAIVER OF VENUE. EACH PLEDGOR
AND THE ADMINISTRATIVE AGENT (I) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY ILLINOIS STATE OR FEDERAL COURT SITTING IN THE NORTHERN DISTRICT OF
ILLINOIS OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS, AND EACH PLEDGOR AND THE ADMINISTRATIVE
AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH ILLINOIS STATE OR FEDERAL COURT,
AND (II) AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST ANY
OTHER PARTY HERETO OR THE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY OF
ANY THEREOF, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, IN ANY COURT OTHER THAN AS HEREINABOVE SPECIFIED IN THIS SECTION
11(c). EACH PLEDGOR 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 ANY
PLEDGOR, THE ADMINISTRATIVE AGENT, ANY BANK OR OTHERWISE) IN ANY COURT
HEREINABOVE SPECIFIED IN THIS SECTION 11(c) 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 PLEDGOR
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.
(d) At the option of the Administrative Agent, this Agreement,
or a carbon, photographic or other reproduction of this Agreement or of any
Uniform Commercial Code financing statement covering the Collateral or any
portion thereof, shall be sufficient as a Uniform Commercial Code financing
statement and may be filed as such.
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<PAGE>
(e) Subject to Section 13.1 of 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 the Pledgors and by the Administrative Agent (at the request 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.
(f) 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.
(g) Each Pledgor hereby expressly waives: (i) notice of the
acceptance by the Administrative Agent of this Agreement, (ii) notice of the
existence or creation or non-payment of all or any of the Liabilities of such
Pledgor, (iii) presentment, demand, notice of dishonor, protest, and all other
notices whatsoever (except as otherwise required herein), and (iv) all diligence
in collection or protection of or realization upon the Liabilities of such
Pledgor, or any security for or guaranty of any of the foregoing.
(h) The Administrative Agent may, from time to time, without
notice to any Pledgor, assign or transfer any or all of the Liabilities of such
Pledgor or any interest therein; and, notwithstanding any such assignment or
transfer or any subsequent assignment or transfer thereof, such Liabilities
shall be and remain Liabilities of such Pledgor for the purposes of this
Agreement, and each and every immediate and successive assignee or transferee of
any of such Liabilities or of any interest therein shall, to the extent of the
interest of such assignee or transferee in such Liabilities, be entitled to the
benefits of this Agreement to the same extent as if such assignee or transferee
were the Administrative Agent; provided, however, that, unless the
Administrative Agent shall otherwise consent in writing, the Administrative
Agent shall have an unimpaired right, prior and superior to that of any such
assignee or transferee, to enforce this Agreement, for the benefit of the
Administrative Agent, as to those of the Liabilities which the Administrative
Agent has not assigned or transferred.
(i) Each Pledgor agrees that, if at any time all or any part
of any payment theretofore applied by the Administrative Agent or any Bank to
any of the Liabilities of such Pledgor is or must be rescinded or returned by
the Administrative Agent or any Bank for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy or
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<PAGE>
reorganization of the Issuer), such Liabilities shall, for the purposes of this
Agreement, to the extent that such payment is or must be rescinded or returned,
be deemed to have continued in existence, notwithstanding such application by
the Administrative Agent, and the pledge by such Pledgor hereunder shall
continue to be effective or be reinstated, as the case may be, as to such
Liabilities, all as though such application by the Administrative Agent or such
Bank had not been made.
(j) 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 any Pledgor under this Agreement. Each Pledgor hereby
acknowledges that there are no conditions to the effectiveness of this
Agreement.
(k) All obligations of the Pledgors and rights of the
Administrative Agent or obligation 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 Liabilities.
(l) GOVERNING LAW. THIS AGREEMENT SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(m) 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
Pledgor hereby acknowledges receipt of a true, correct and complete counterpart
of this Agreement.
(n) The Administrative Agent acts herein as agent for itself,
the Banks and any and all future holders of the Liabilities.
(p) WAIVER OF JURY TRIAL. EACH PLEDGOR 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 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 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 AGREEMENT.
(q) Each Pledgor agrees that the Administrative Agent
may amend and replace Schedule 1 to this Agreement from time to
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<PAGE>
time to reflect the purchase and pledge of Additional Pledged Shares hereunder
without any further action on the part of any Pledgor and amend and file
financing statements to reflect the amendments to Schedule 1 from time to time.
* * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
PLEDGORS:
/s/STEPHEN C. HILBERT
---------------------
Stephen C. Hilbert
Notice Address:
Address:
Attention:
Telephone:
<PAGE>
THOMAS C. HILBERT,
IRREVOCABLE TRUST
By: /s/STEPHEN C. HILBERT
---------------------
Stephen C. Hilbert, Trustee
Notice Address:
Address:
Attention:
Telephone:
<PAGE>
CHRISTOPHER L. MYERS,
IRREVOCABLE TRUST
By: /s/STEPHEN C. HILBERT
---------------------
Stephen C. Hilbert, Trustee
Notice Address:
Address:
Attention:
Telephone:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Administrative Agent
By:/s/
---------------------
Name:
Its:
