SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
AMENDMENT NO. _____
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)
October 8, 1999
- --------------------------------------------------------------------------------
(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:
[ ]
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CUSIP No. . . . . . . . . . . . . . . . . . . . . . . . . . . 208464107
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________________________________________________________________________________
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 . . . . . . . . . . . . . 15,911,843
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________________________________________________________
Shares
Beneficially 8. SHARED VOTING POWER . . . . . . . . . . . . . 1,133,822
---------
________________________________________________________
Owned By
Each 9. SOLE DISPOSITIVE POWER . . . . . . . . . . . 15,911,843
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________________________________________________________
Reporting
Person With 10. SHARED DISPOSITIVE POWER . . . . . . . . . . 1,133,822
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________________________________________________________________________________
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,045,665
________________________________________________________________________________
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
________________________________________________________________________________
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1%
----
________________________________________________________________________________
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.
Item 2. Identity and Background
This statement is filed on behalf of Stephen C. Hilbert. Mr. Hilbert is
Chairman of the Board, President and Chief Executive Officer of Conseco.
The business address of Mr. Hilbert is 11825 N. Pennsylvania Street,
Carmel, Indiana 46032. Mr. Hilbert is a citizen of the United States of
America. During the last five years, Mr. Hilbert has not been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors) nor has he been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction resulting in a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The acquisitions which are the subject of this Schedule 13D are the
acquisition of beneficial ownership of shares of Common Stock resulting
from the purchases of such shares by The Thomas C. Hilbert Irrevocable
Trust II ("Hilbert Trust II"), Stephen C. Hilbert Living Trust ("Hilbert
Living Trust") and The Heather Dawn Hilbert Irrevocable Trust ("Heather
Hilbert Trust"). Hilbert Trust II, Hilbert Living Trust and Heather Hilbert
Trust are referred to in this Schedule 13D as the "Trusts". Mr. Hilbert is
the sole trustee of each of the Trusts. All such shares were acquired
pursuant to the 1999 Director and Executive Officer Stock Purchase Plan of
Conseco, Inc., dated September 7, 1999 (the "1999 Plan") in open market
transactions. For the 60 day period ending with the date of this Schedule
13D, the following table sets forth the shares of Common Stock acquired,
the date of each acquisition and the consideration paid on each date:
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<TABLE>
<CAPTION>
Hilbert Trust II Heather Hilbert Trust Hilbert Living Trust
Shares of Consideration Shares of Consideration Shares of Consideration
Common Stock Paid Common Stock Paid Common Stock Paid
------------- ------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sept. 15, 1999 22,418 $ 498,679 - - - -
Sept. 16, 1999 108,368 2,408,457 - - - -
Sept. 17, 1999 31,272 716,051 - - - -
Sept. 20, 1999 92,887 2,079,721 - - - -
Sept. 21, 1999 165,648 3,617,239 - - - -
Sept. 22, 1999 204,352 4,311,970 - - - -
Sept. 24, 1999 92,887 1,837,676 - - - -
Sept. 27, 1999 92,887 1,880,860 - - - -
Sept. 29, 1999 77,405 1,548,100 - - - -
Sept. 30, 1999 36,876 709,863 - - - -
Oct. 1, 1999 - - 7,519 $ 150,380 97,745 $1,954,900
Oct. 4, 1999 - - 90 1,879 1,173 24,486
Oct. 5, 1999 - - 12,030 265,788 156,391 3,455,271
Oct. 8, 1999 - - 1,895 42,874 24,631 557,276
Oct. 11, 1999 - - 211 4,748 2,735 61,538
Oct. 13, 1999 - - 16,720 375,481 217,366 4,881,388
Oct. 14, 1999 - - 10,663 226,933 138,620 2,950,152
</TABLE>
Such acquisitions increased the number of shares of Common Stock
beneficially owned by Mr. Hilbert to 17,045,665 shares, or 5.1% of the
shares of Common Stock deemed to be outstanding under Rule 13d- 3(d) of the
Securities and Exchange Commission. Shares acquired by Hilbert Trust II,
Hilbert Living Trust and the Heather Hilbert Trust were acquired with funds
borrowed from The Chase Manhattan Bank ("Chase"). Pursuant to the 1999
Plan, such loans are guaranteed by Conseco. Shares previously acquired were
acquired with personal funds and funds borrowed from financial institutions
under the Amended and Restated Director, Executive and Senior Officer Stock
Purchase Plan of Conseco, Inc. (the "Purchase Plan").
Item 4. Purpose of Transaction
Mr. Hilbert has acquired beneficial ownership of the Common Stock for
investment purposes. Mr. Hilbert through Hilbert Living Trust and the
Heather Hilbert Trust has current plans to acquire an additional 712,211
shares of Common Stock in open market transactions from time to time
pursuant to the 1999 Purchase Plan. Mr. Hilbert has also entered into an
Amended and Restated Employment Agreement, dated as of May 26, 1999,
pursuant to which Mr. Hilbert has agreed to receive his after-tax bonus for
the last three quarters of 1999 in shares of Common Stock at a price equal
to the greater of $50 per share or the market value of the stock at the
time the quarterly bonus payments are made.
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Item 5. Interest in Securities of the Issuer
Set forth below is information concerning the shares of Common Stock
beneficially owned by Mr. Hilbert on the date hereof.
(a) 17,045,665 shares, which number includes (i) 5,681,132 shares of
Common Stock which may be acquired by Mr. Hilbert within 60 days upon
exercise of stock options, (ii) 10,141,596 shares of Common Stock which are
owned by trusts of which Mr. Hilbert is the sole trustee (the "Trusts"),
(iii) 89,115 shares of Common Stock which are owned jointly by Mr. Hilbert
and his wife, (iv) 955,000 shares of Common Stock which are owned by The
Hilbert Foundation (the "Foundation") of which Mr. Hilbert and his wife are
trustees, (v) 20,000 shares of Common Stock which may be acquired by the
Foundation within 60 days upon exercise of a warrant to purchase 20,000
shares of Common Stock for $19.54 per share (the "Warrant"), (vi) 98,822
shares of Common Stock which are owned by the Stephen C. Hilbert 1996
Grantor Retained Annuity Trust Agreement (the "Hilbert GRAT") of which Mr.
Hilbert is a co-trustee and (vii) 60,000 shares of Common Stock which are
owned by Tomisue Hilbert Trust of which Mrs. Hilbert is the sole trustee
and ownership of which Mr. Hilbert expressly disclaims beneficial
ownership. Such amount is 5.1% of the deemed outstanding shares of Common
Stock of Conseco.
(b) Except for shares held by Mr. Hilbert and his wife jointly, the
Foundation, the Hilbert GRAT and Tomisue Hilbert Trust as indicated in (a),
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 or warrants, do not have voting rights prior to exercise of such
options or warrants, as the case may be.
(c) Except as disclosed herein, Mr. Hilbert has not engaged in any
transactions concerning the Common Stock during the past 60 days.
(d) Except as disclosed herein, no other person has the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the
sale of the shares of Common Stock beneficially owned by Mr. Hilbert.
(e) Not applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
The shares of Common Stock beneficially owned by Mr. Hilbert include
5,681,132 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) 2,410,136 shares of Common Stock at a price of $39.44 per
share, (ii) 151,656 shares of Common Stock at a price of $40.19 per share,
(iii) 897,551 shares of Common Stock at a price of $48.19 per share, (iv)
174,346 shares of Common Stock at a price of $35.97 per share and (v)
2,047,443 shares of Common Stock at a price of $30.81 per share. Mr.
Hilbert also holds options not exercisable within 60 days to acquire
1,508,000 shares of Common Stock. All such options were granted under the
Conseco 1994 Stock and Incentive Plan and the Conseco 1997 Non-qualified
Stock Option Plan.
Mr. Hilbert holds an aggregate of 1,807,629 stock units (1,410,006 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 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.
Mr. Hilbert's employment agreement contains certain change in control
provisions. In the event of a Control Termination (as defined in the
employment agreement) of Mr. Hilbert, Mr. Hilbert may elect, within sixty
(60) days after such Control Termination, to receive a payment from Conseco
in return for surrender by Mr. Hilbert of all or any portion of the options
then outstanding held by Mr. Hilbert to purchase shares of Common Stock
("Unexercised Options") and shares of Common Stock held by Mr. Hilbert.
Unexercised Options include all outstanding options whether or not then
exercisable. For each Unexercised Option to purchase one share of Common
Stock and each share of Common Stock, Conseco must pay to Mr. Hilbert an
amount equal to the greater of (i) the per share price at the time the
change of control occurs or (ii) the 20 day average price per share at the
time Mr. Hilbert gives notice that such a purchase is to occur. To
compensate Mr. Hilbert for
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loss of the potential future speculative value of the Unexercised Options,
no deduction may be made for the exercise price per share for each
Unexercised Option from the amount to be received by Mr. Hilbert.
3,170,000 shares of Common Stock held by various trusts of which Mr.
Hilbert is the sole trustee were purchased pursuant to the Purchase Plan
with the proceeds of a loan obtained pursuant to the B of A Credit
Agreement (as defined herein). The B of A Credit Agreement is filed as an
exhibit hereto and is made a part hereof. 3,170,000 of the shares owned by
the Trusts and by Mr. Hilbert, individually, have been pledged to Bank of
America under the Bank of America Borrower Pledge Agreement and Bank of
America Reaffirmation Agreement of Pledge Agreement filed as exhibits
hereto and made a part hereof. 1,612,789 shares of Common Stock held by the
Trusts were purchased pursuant to the 1999 Plan with the proceeds of a loan
obtained pursuant to the Chase Credit Agreement (as defined herein). The
Chase Credit Agreement is filed as an exhibit hereto and is made a part
hereof. 1,612,789 of the shares owned by the Trusts have been pledged to
Chase under the Chase Borrower Pledge Agreement and Chase Reaffirmation
Agreement of Pledge Agreement filed as exhibits hereto and made a part
hereof.
The Warrant contains a provision allowing Mr. Hilbert to cause Conseco to
purchase the Warrant for the difference between the exercise price and the
then current market price. The Warrant expires September 29, 2005. See
Exhibit 8 to this Schedule 13D.
Mr. Hilbert entered into an Amended and Restated Employment Agreement,
dated as of May 26, 1999, pursuant to which Mr. Hilbert has agreed to
receive his after-tax bonus for the last three quarters of 1999 in shares
of Common Stock at a price equal to the greater of $50 per share or the
market value of the stock at the time the quarterly bonus payments are
made. Mr. Hilbert has already received such shares for the second quarter
of 1999.
Mr. Hilbert has current plans to acquire an additional 712,212 shares of
Common Stock in open market transactions from time to time pursuant to the
1999 Plan.
Item 7. Material to Be Filed as Exhibits
1. Employment Agreement dated as of January 1, 1998 and amended
and restated as of May 26, 1999, between Conseco and Stephen
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C. Hilbert, was filed as Exhibit 10.1.2 to Conseco's Report on Form
10-Q for the quarter ended June 30, 1999 and is incorporated herein by
this reference.
2. 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.
3. 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.
4. Amended and Restated Director, Executive and Senior Officer
Stock Purchase Plan of Conseco, Inc., dated July 30, 1998, was filed as
Exhibit 10.8.11 to Conseco's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998 and is incorporated herein by this
reference.
5. Credit Agreement, (the "B of A Credit Agreement"), dated as of
August 21, 1998, among the Borrowers (including some of the Trusts),
the financial institutions party thereto and Bank of America.
6. Guaranty of Conseco, Inc., dated as of August 21, 1998 was
filed as Exhibit 10.8.12 to Conseco's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1999 and is incorporated herein by this
reference.
7. Borrower Pledge Agreement, dated August 21, 1998, between some
of the Trusts and Bank of America.
8. Conseco, Inc. Warrant dated January 21, 1997 was filed by Mr.
Hilbert as Exhibit 9 to Amendment No. 3 to Schedule 13D dated January
31, 1997. Such document is incorporated herein by this reference and
the Certificate of Adjustment, dated as of February 11, 1997, is
filed herewith.
9. Conseco, Inc. Amended and Restated 1997 Non-qualified Stock
Option Plan was filed as Exhibit 10.8.14 to Conseco's Annual
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Report on Form 10-K for 1997 and is incorporated herein by this
reference.
10. 1999 Director and Executive Officer Stock Purchase Plan
of Conseco, Inc., dated September 7, 1999.
11. Credit Agreement, dated as of September 15, 1999, among the
Borrowers (including some of the Trusts), the financial institutions
party thereto from time to time and The Chase Manhattan Bank.
12. Guaranty, dated as of September 15, 1999 between Conseco, Inc.
and The Chase Manhattan Bank.
13. Borrower Pledge Agreement, dated as of September 15, 1999,
between some of the Trusts and The Chase Manhattan Bank.
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SIGNATURES
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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: October 18, 1999.
/s/ STEPHEN C. HILBERT
-------------------------------
Stephen C. Hilbert
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CREDIT AGREEMENT
Dated as of August 21, 1998,
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
================================================================================
<PAGE>
The following Table of Contents has been inserted for convenience only and does
not constitute a part of this Agreement.
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS...................................1
1.1 Certain Defined Terms...............................................1
1.2 Other Definitional Provisions.......................................13
1.3 Accounting and Financial Determinations.............................13
SECTION 2. THE COMMITMENTS AND THE LOANS.....................................14
2.1 Commitment..........................................................14
2.2 Procedure for Borrowings............................................14
2.3 Funding Reliance for Borrowings.....................................15
2.4 Conversion and Continuation Elections...............................16
2.5 Repayment of Loans..................................................17
2.6 Loan Accounts; Record Keeping.......................................18
SECTION 3. INTEREST..........................................................18
3.1 Interest Rates......................................................18
3.2 Default Interest Rate...............................................19
3.3 Interest Payment Dates..............................................19
3.4 Setting and Notice of Rates.........................................19
3.5 Fees................................................................19
3.6 Computation of Interest and Fees....................................19
SECTION 4. PAYMENTS AND PREPAYMENTS..........................................20
4.1 Voluntary Termination or Reduction of
Commitments.....................................................20
4.2 Optional Prepayments................................................20
4.3 Payments by the Borrowers...........................................21
4.4 Application of Prepayments..........................................21
4.5 Sharing of Payments.................................................22
4.6 Setoff..............................................................22
4.7 Net Payments........................................................23
SECTION 5. CHANGES IN CIRCUMSTANCES..........................................24
5.1 Increased Costs.....................................................24
5.2 Change in Rate of Return............................................25
5.3 Basis for Determining Interest Rate Inadequate or
Unfair..........................................................26
5.4 Changes in Law Rendering Certain Loans Unlawful.....................27
5.5 Funding Losses......................................................27
5.6 Right of Banks to Fund Through Other Offices........................28
5.7 Discretion of Banks as to Manner of Funding.........................28
5.8 Replacement of Banks................................................28
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5.9 Conclusiveness of Statements; Survival of
Provisions......................................................29
SECTION 6. COLLATERAL AND OTHER SECURITY.....................................29
6.1 Collateral Documents................................................29
6.2 Application of Proceeds from Collateral.............................29
6.3 Further Assurances..................................................30
SECTION 7. REPRESENTATIONS AND WARRANTIES OF BORROWERS.......................30
7.1 No Conflict.........................................................31
7.2 Validity............................................................31
7.3 Financial Statements................................................31
7.4 Material Adverse Change.............................................31
7.5 Litigation and Contingent Obligations...............................31
7.6 Liens...............................................................31
7.7 Taxes...............................................................31
7.8 Accuracy of Information.............................................32
7.9 Proceeds............................................................32
7.10 Securities Laws....................................................32
7.11 Solvency...........................................................32
7.12 No Default.........................................................32
7.13 Organization, etc..................................................32
7.14 Authorization......................................................33
7.15 Margin Regulations.................................................33
7.16 No Default or Event of Default.....................................33
SECTION 8. COVENANTS OF BORROWERS............................................34
8.1 Reports, Certificates and Other Information.........................34
8.2 Taxes and Liabilities...............................................35
8.3 Compliance with Laws................................................35
8.4 Other Agreements....................................................35
SECTION 9. CONDITIONS AND EFFECTIVENESS OF
THIS AGREEMENT..................................................35
9.1 Initial Loans.......................................................36
9.2 All Loans...........................................................38
SECTION 10. EVENTS OF DEFAULT AND THEIR EFFECT...............................39
10.1 Events of Default..................................................39
10.2 Effect of Event of Default.........................................41
SECTION 11. THE AGENT........................................................41
11.1 Authorization and Action...........................................41
11.2 Liability of the Administrative Agent..............................42
11.3 Administrative Agent and Affiliates................................43
11.4 Bank Credit Decision...............................................43
11.5 Indemnification....................................................43
11.6 Successor Agent....................................................44
SECTION 12. ASSIGNMENTS AND PARTICIPATIONS...................................44
12.1 Assignments........................................................44
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12.2 Participations.....................................................46
12.3 Disclosure of Information..........................................47
12.4 Foreign Transferees................................................48
SECTION 13. MISCELLANEOUS....................................................48
13.1 Waivers and Amendments.............................................48
13.2 Failure to Consent.................................................49
13.3 Notices............................................................50
13.4 Indemnity..........................................................50
13.5 Subsidiary References..............................................51
13.6 Captions...........................................................51
13.7 GOVERNING LAW......................................................51
13.8 Counterparts.......................................................51
13.9 SUBMISSION TO JURISDICTION; WAIVER OF VENUE........................51
13.10 Successors and Assigns............................................52
13.11 WAIVER OF JURY TRIAL..............................................52
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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 Notice of Conversion/Continuation
EXHIBIT D Form of Pledge Agreement
EXHIBIT E Form of Guaranty
EXHIBIT F-1 Form of Opinion of John J. Sabl, counsel to
Guarantor
EXHIBIT F-2 Form of Opinion of Baker & Daniels, outside
counsel to Guarantor
EXHIBIT G Form of Confidentiality Letter
EXHIBIT H Form of Assignment Agreement
EXHIBIT I Funding Loss Formula
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of August 21, 1998, 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, certain of the Borrowers, certain of the Banks and the
Administrative Agent are parties to that certain Amended and Restated Credit
Agreement, dated as of August 26, 1997 (as amended or modified through the date
hereof, the "Existing Credit Agreement"), whereby the Banks party thereto made
term loans to the Borrowers party thereto, on the terms and subject to the
conditions set forth in the Existing Credit Agreement;
WHEREAS, the Borrowers have requested that the Banks agree to make
term loans in an aggregate principal amount of $200,000,000;
WHEREAS, the proceeds of the term loans to be made under this Agreement
will also be used by the Borrowers solely to purchase up to 4,500,000 shares of
common stock of Guarantor;
WHEREAS, the Banks are willing, on the terms and conditions
hereinafter set forth, to make the term loans to the Borrowers;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" - see Preamble.
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"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.
"Affected Bank" - see Section 5.4.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, owns, holds, controls, is controlled by or is under
common control with such Person (including all beneficial control as a trustee,
guardian or other fiduciary). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors, managing general partners or
managers; or (b) to direct or cause the direction of the management and policies
of such Person whether through the ownership of voting securities, membership
interests, by contract or otherwise.
"Agent-Related Persons" shall mean BofA and any successor agent arising
under Section 11.6, together with its Affiliates (including, in the case of
BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agreement" shall mean this Amended and Restated Credit Agreement, as
amended or modified.
"Arranger" shall mean BancAmerica Robertson Stephens, a Delaware
corporation.
"Assignment Agreement" - see Section 12.1.
"Bank" or "Banks" - 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
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
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<PAGE>
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 Loan" shall mean a Loan bearing interest at the Base Rate.
"BofA" - see Preamble.
"Borrower" or "Borrowers" - see Preamble.
"Borrower Collateral Percentage" shall mean, as to any Borrower, a
fraction, the numerator of which is equal to the principal amount of the Loans
to such Borrower then outstanding hereunder and the denominator of which is
equal to the aggregate principal amount of the Loans to all Borrowers then
outstanding hereunder.
"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) one hundred
eighty (180) days after the Closing Date (including the Closing Date) 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 and, if the applicable Business Day
relates to any Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"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.
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"Collateral Ratio" shall mean, as to any Borrower, the ratio of (a) the
sum of the Loan Value of Direct Collateral of such Borrower plus the Borrower
Collateral Percentage of the Loan Value of Indirect Collateral to (b) the
aggregate principal amount of the Loans of such Borrower then outstanding.
"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.
"Conversion/Continuation Date" shall mean any date on which, under
Section 2.4, Guarantor (on behalf of the Borrowers) (a) converts Loans of one
Type to another Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"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.
"Direct Collateral" shall mean, with respect to any Borrower, all
property, assets and/or rights on or in which a Lien is now or hereafter granted
by such Borrower to the Administrative Agent (or to any agent, trustee or other
party acting on behalf of the Administrative Agent) for the benefit of the
Banks, pursuant to the Pledge Agreement and any other instruments or documents
provided for herein or therein or delivered hereunder or thereunder or in
connection herewith or therewith.
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
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"Eligible Assignee" shall mean any bank, pension fund, mutual fund,
investment fund or other financial institution (other than an insurance company
or any Affiliate of an insurance company except those to which the Borrowers
consent).
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate."
"Event of Default" - see Section 10.1.
"Existing Credit Agreement" - see first recital.
"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 the opinions and pronouncements
of the Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, and any entity exercising executive, legislative,
judicial, regulatory or 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" shall mean the Guaranty of Guarantor, dated as of the date
hereof, executed and delivered in favor of the Administrative Agent, for the
benefit of the Banks, in substantially the form of Exhibit E.
"Hedging Obligations" shall have the meaning provided in the Revolving
Credit Agreement.
"IBOR" has the meaning set forth in the definition of Offshore Rate.
"Indebtedness" shall mean, with respect to any Person at any date,
without duplication: (a) all obligations of such Person for borrowed money or in
respect of loans or advances; (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (c) all obligations in
respect of letters of credit, whether or not drawn, and bankers' acceptances
issued for the account 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.
"Indirect Collateral" shall mean any assets of Guarantor which, as
determined by the Administrative Agent in its sole discretion exercised in good
faith, shall be deemed to "indirectly secure" the Liabilities pursuant to
Regulation U as a result of the negative pledge agreement of Guarantor set forth
in the Guaranty.
"Interest Payment Date" shall mean, as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and, as
to any Base Rate Loan, the last Business Day of each calendar quarter and each
date such Loan is converted into another Type of Loan, provided, however, that
if any Interest Period for an Offshore Rate Loan exceeds three months, the date
that falls three months (as the case may be) after the beginning of such
Interest Period and after each
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Interest Payment Date thereafter is also an Interest Payment Date.
"Interest Period" shall mean, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three or six months thereafter as selected by
Guarantor (on behalf of the Borrowers) in its Notice of Borrowing or Notice of
Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to
the following Business Day unless, in the case of an Offshore Rate
Loan, the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate Loan
that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such
Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the
Termination Date.
"Lending Office" shall mean, with respect to any Bank, any office
designated by such Bank in its sole discretion beneath its signature hereto (or
in an Assignment Agreement) or otherwise from time to time by written notice to
the Borrowers and the Administrative Agent, as a Lending Office for purposes
hereunder. A Bank may designate separate Lending Offices for the purposes of
making and maintaining Loans.
"Liabilities" shall mean, as to any Borrower, all obligations of such
Borrower to the Banks or the Administrative Agent, howsoever created, arising or
evidenced, whether direct or indirect, joint or several, absolute or contingent,
or now or hereafter existing, or due or to become due, which arise out of or in
connection with this Agreement, the Notes, if any, or the other Loan Documents.
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"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other) or other priority or preferential arrangement of any kind or nature
whatsoever.
"Litigation" shall mean any litigation (including, without limitation,
any governmental proceeding or arbitration proceeding), tax audit or
investigative proceeding, claim, lawsuit, and/or investigation pending or
threatened against or involving any Borrower, or Guarantor or any of its
Subsidiaries or any of its or their businesses or operations.
"Loan(s)" shall have the meaning set forth in Section 2.1 and may be a
Base Rate Loan or an Offshore Rate Loan (each, a "Type of Loan").
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
if any, the Guaranty, the Pledge 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.
"Loan Value of Direct Collateral" shall mean, with respect to any
Borrower, (a) the current market value of the common stock of Guarantor pledged
by such Borrower to the Administrative Agent, for the benefit of the Banks,
under the Pledge Agreement, plus (b) without duplication, the current market
value of any other Direct Collateral constituting Margin Stock pledged by such
Borrower to the Administrative Agent, for the benefit of the Banks, under any
Loan Document, plus (c) without duplication, the maximum loan value of all
Direct Collateral of such Borrower not constituting Margin Stock, it being
understood that the maximum loan value of Direct Collateral shall be its good
faith loan value (i.e., the value of such Direct Collateral as determined from
time to time by the Administrative Agent (with the concurrence of the Required
Lenders) exercising sound banking judgment) without regard to such Borrower's
assets securing any unrelated transactions. The Administrative Agent and/or the
Required Lenders shall have the right at any time in their sole discretion to
recompute the Loan Value of Direct Collateral.
"Loan Value of Indirect Collateral" shall mean, with respect to any
Borrower, the sum of the maximum loan value of Indirect Collateral under
Regulation U, after taking into account any other Indebtedness of Guarantor
"indirectly secured" (as set forth in Regulation U and the interpretations
thereof) by the assets of Guarantor, it being understood that (a) the maximum
loan value of Indirect Collateral constituting Margin Stock shall be 50% of its
current market value and (b) the maximum loan value of Indirect Collateral not
constituting Margin Stock shall be its
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good faith loan value (i.e., the value of such Indirect Collateral as determined
from time to time by the Administrative Agent (with the concurrence of the
Required Lenders) exercising sound banking judgment), in each case without
regard to Guarantor's assets securing any unrelated transactions. Until further
notice from the Administrative Agent to the Borrower, the Loan Value of Indirect
Collateral shall be deemed to be $1,759,352,500, it being understood that the
Administrative Agent and/or the Required Lenders shall have the right at any
time in their sole discretion to recompute the Loan Value of Indirect
Collateral.
"Margin Stock" shall mean "margin stock" as such term is defined in
Regulation U and Regulation G.
"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 Guarantor and its
Subsidiaries taken as a whole, or (c) materially impairs the ability of any
Borrower or Guarantor to perform his, hers or its obligations under this
Agreement or any of the other Loan Documents to which he, she or it is a party,
or (d) materially 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.
"NationsBank" shall mean NationsBank, N.A. (South), a
national banking association.
"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.
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"Notice of Conversion/Continuation" shall mean a notice in
substantially the form of Exhibit C.
"Obligations" shall have the meaning provided in the Guaranty.
"Offshore Rate" shall mean, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of interest
per annum (rounded upward to the next 1/100th of 1%) determined by the
Administrative Agent as follows:
Offshore Rate = IBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Bank) under regulations issued from time to time by
the FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" shall mean the rate of interest per annum (computed for the
actual number of days elapsed on the basis of a 360- day year)
determined by the Administrative Agent as the rate at which dollar
deposits (rounded upward to the next 1/100th of 1% in the approximate
amount of the Loans of such Borrower for an Interest Period 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.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" shall mean a Loan that bears interest based on the
Offshore Rate.
"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
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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" shall mean the Pledge Agreement, dated as of the
date hereof, substantially in the form of Exhibit D.
"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 5.8.
"Replacement Bank" - see Section 5.8.
"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 senior or
executive vice 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 November 22, 1996, among Guarantor, the Revolving Credit Banks,
BofA, as syndication agent for the Revolving Credit Banks, First Union National
Bank of North Carolina, as documentation agent for the Revolving Credit Banks,
and NationsBank, as administrative agent for the Revolving Credit Banks, as the
same may be amended or modified from time to time 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).
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"Revolving Credit Loan Documents" shall mean the Loan Documents (as
defined in the Revolving Credit Agreement).
"Significant Subsidiary" shall have the meaning provided in the
Revolving Credit Agreement as in effect on the Closing Date.
"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 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.
"Subsidiary" shall have the meaning provided in the Revolving Credit
Agreement as in effect on the Closing Date.
"Substitute Bank" - see Section 13.2.
"Taxes" or "Tax" shall mean all taxes of any nature whatsoever and
howsoever denominated, including, without limitation, retaliatory, income,
premium, withholding, guaranty fund or similar assessments, excise, import,
governmental fees, duties and all other charges, as well as additions to tax,
penalties and interest thereon, imposed by any Governmental Authority.
"Termination Date" shall mean, as to any Borrower, the earlier of (a)
August 26, 2001, 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.
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"Type" or "Type of Loan" has the meaning specified in the definition of
"Loan."
"UCC" shall mean the Uniform Commercial Code or comparable statute or
any successor statutes thereto, as in effect from time to time in the relevant
jurisdiction.
"United States" and "U.S." each means the United States of America.
SECTION 1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
above-defined meanings when used in any Loan Document, or any
certificate, report or other document made or delivered pursuant
to this Agreement, unless the context therein shall clearly
otherwise require.
(b) The words "hereof," "herein," "hereunder" and similar
terms when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement; and
subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) The words "amended or modified" when used in any Loan
Document shall mean with respect to such Loan Document as from
time to time, in whole or in part, amended, modified,
supplemented, restated, refinanced, refunded or renewed.
(d) In the computation of periods of time in this Agreement
from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each
means "to but excluding."
(e) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the
Administrative Agent, the Borrowers and the other parties, and are
the products of all parties. Accordingly, they shall not be
construed against the Banks or the Administrative Agent merely
because of the Administrative Agent's or Banks' involvement in
their preparation.
SECTION 1.3 Accounting and Financial Determinations. For purposes of
this Agreement, unless otherwise specified or the context otherwise requires,
all accounting terms used in any Loan Document shall be interpreted, all
accounting determinations and
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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 Closing 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 $200,000,000 (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 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) (i) three Business Days prior to the
requested Borrowing Date, in the case of Offshore Rate Loans and (ii) on the
requested Borrowing Date, in the case of Base Rate Loans, 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 last Borrowing to be made under
this Agreement shall not be required to be in an integral
multiple of $100,000; and provided, further, that the
Borrowers, collectively,
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shall not be entitled to make more than thirty (30) Borrowings
hereunder in the aggregate;
(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;
(iii) the Type of Loans comprising such Borrowing;
and
(iv) with respect to any Borrowing comprised of
Offshore Rate Loans, the duration of the Interest Period
applicable to such Offshore Rate Loan included in such notice.
If the Notice of Borrowing fails to specify the duration of
the Interest Period for any Borrowing comprised of Offshore
Rate Loans, such Interest Period shall be three (3) months.
(b) The Administrative Agent will promptly notify each Bank of
its receipt of 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.
(d) After giving effect to any Borrowing, unless the
Administrative Agent shall otherwise consent, there may not be more than one (1)
Interest Period in effect for all Loans then outstanding.
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
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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 the Type of
Loans comprising 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.
SECTION 2.4 Conversion and Continuation Elections. (a) Guarantor (on
behalf of the Borrowers) may, upon irrevocable written notice to the Agent in
accordance with Section 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in
the case of Offshore Rate Loans, to convert any such Loans (or any
part thereof in an amount not less than $5,000,000, or that is in
an integral multiple of $1,000,000 in excess thereof) into Loans
of any other Type; or
(ii) elect as of the last day of the applicable Interest
Period, to continue any Offshore Rate Loans having Interest
Periods expiring on such day (or any part thereof) in an amount
not less than $5,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof;
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $5,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of Guarantor (on behalf of the Borrowers) to continue such Loans as, or convert
such Loans into, Offshore Rate Loans, as the case may be, shall terminate.
(b) Guarantor (on behalf of the Borrowers) shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 9:00 A.M.
(San Francisco time) at least (i) three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as Offshore Rate Loans; and (ii) one Business Day in advance of the
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Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the Type of Loans resulting from the proposed conversion
or continuation; and
(D) in the case of conversions into Offshore Rate Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, Guarantor (on behalf of the Borrowers) has failed to select
timely a new Interest Period to be applicable to such Offshore Rate Loans or if
any Default or Event of Default then exists, Guarantor (on behalf of the
Borrowers) shall be deemed to have elected to convert such Offshore Rate Loans
into Base Rate Loans effective as of the expiration date of such Interest
Period.
(d) The Administrative Agent will promptly notify each Bank of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by Guarantor (on behalf of the Borrowers), the Administrative Agent
will promptly notify each Bank of the details of any automatic conversion. All
conversions and continuations shall be made ratably according to the respective
outstanding principal amounts of the Loans with respect to which the notice was
given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the existence
of a Default or Event of Default, Guarantor (on behalf of the Borrowers) may not
elect to have a Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Loans,
unless the Administrative Agent shall otherwise consent, there may not be more
than one (1) Interest Period in effect for all Loans hereunder.
SECTION 2.5 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.
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SECTION 2.6 Loan Accounts; Record Keeping.
(a) The Loans made by each Bank shall be evidenced by one or more
loan accounts or records maintained by such Bank in the ordinary course of
business and the Administrative Agent. The loan accounts or records maintained
by the Administrative Agent and each Bank shall be conclusive absent manifest
error of the amount of the Loans made by the Banks to the Borrowers and the
interest and payments thereon; provided, that in the event of a conflict between
information recorded by the Administrative Agent and any Bank as to such Bank's
Loans, the records of the Administrative Agent absent manifest error shall
control. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligations of any Borrower hereunder or to pay
any amount owing with respect to the Loans.
(b) The Loans made by the Banks to each Borrower shall, upon the
request of the Administrative Agent, be evidenced by a Note executed and
delivered by such Borrower payable to the Administrative Agent, for the benefit
of the Banks, in an aggregate principal amount equal to the aggregate
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 AND FEES
SECTION 3.1 Interest Rates. With respect to each Loan made to any
Borrower hereunder, such Borrower hereby promises to pay interest on the unpaid
principal amount thereof for the period commencing on the Borrowing Date of such
Loan until such Loan is paid in full as follows:
(a) at all times while such Loan or any portion thereof is a Base
Rate Loan, at a rate per annum equal to the Base Rate from time to time
in effect minus 2.00%.
(b) at all times while such Loan or any portion thereof is an
Offshore Rate Loan, at a rate per annum equal to the
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Offshore Rate, plus the Eurodollar Rate Committed Margin (as defined
in the Revolving Credit Agreement) plus .125% per annum.
SECTION 3.2 Default Interest Rate. Notwithstanding the provisions of
Section 3.1, in the event that any Default under Section 10.1.2 or any Event of
Default shall occur with respect to any Borrower, such Borrower hereby promises
to pay, automatically in the case of a Default under Section 10.1.2 or upon
demand therefor by the Administrative Agent for any Event of Default (other than
pursuant to Section 10.1.2), interest on the unpaid principal amount of the
Loans of such Borrower (and interest thereon to the extent permitted by law) for
the period commencing on the date of such Default or demand until such Loans are
paid in full or such Default or Event of Default is cured or waived in
accordance with Sections 10.2 and 13.1 at a rate per annum equal to the
applicable interest rate from time to time in effect (but not less than the
applicable interest rate as at such date of demand), plus 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 Setting and Notice of Rates. The applicable Offshore Rate
shall be determined by the Administrative Agent. Each determination of the
applicable Offshore Rate shall be conclusive and binding upon the parties
hereto, in the absence of manifest error. If the Administrative Agent is unable
to determine such a rate, the provisions of Section 5.3 shall apply. The
Administrative Agent shall, upon written request of Guarantor (on behalf of the
Borrowers) or a Bank, deliver to Guarantor (on behalf of the Borrowers) or such
Bank a statement showing the computations used by the Administrative Agent in
determining any applicable Offshore Rate hereunder.
SECTION 3.5 Fees. The Borrowers agree to pay the fees set forth in the
Summary of Indicative Terms and Conditions dated August 10, 1998, for the sole
benefit of the Administrative Agent.
SECTION 3.6 Computation of Interest and Fees. Interest on Offshore Rate
Loans shall be computed for the actual number of days elapsed on the basis of a
360-day year, and interest on Base
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Rate Loans shall be computed for the actual number of days elapsed on the basis
of a 365/366-day year. Each determination of an interest rate by the
Administrative Agent shall be conclusive and binding on the Borrowers and the
Banks in the absence of manifest error. Notwithstanding anything contained
herein to the contrary interest on the Loans shall not exceed the maximum
interest permitted by applicable law.
SECTION 4. PAYMENTS AND PREPAYMENTS
SECTION 4.1 Voluntary Termination or Reduction of Commitments. Each
Borrower may, upon not less than three (3) 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 three (3) 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 (unless such Borrower is prepaying the total amount of the Loans then
outstanding with respect to such Borrower). Such notice of prepayment shall
specify the date, the amount of such prepayment and the Types of Loans to be
prepaid. The Administrative Agent will promptly notify each Bank of its receipt
of any such notice, and of such Bank's Percentage of such prepayment. If such
notice is given by such Borrower, such Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 5.5. 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.
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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 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 or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
Interest Period, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Administrative Agent receives notice from the
applicable Borrower prior to the date on which any payment is due to the Banks
that such Borrower will not make such payment in full as and when required, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent such Borrower has not made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent on demand 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.
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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 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
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(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 (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 with respect to payments received
hereunder (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
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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 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
Closing Date, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or any
Lending Office of such Bank) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency,
(i) shall subject any Bank (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
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(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
(iii) shall impose on any Bank (other than a Defaulting Bank) (or
its Lending Office) any other condition affecting its Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D referred to above, to impose a cost on) such Bank (or any
Lending Office of such Bank) of making or maintaining Offshore Rate Loans to
reduce the amount of any sum received or receivable by such Bank (or the Lending
Office of such Bank) under this Agreement or under its Loans with respect
thereto, then within thirty (30) days after demand by such Bank (which demand
shall be accompanied by a statement setting forth in reasonable detail the basis
of such 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
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amounts (including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on such Borrowers. In
determining such amount, such Bank may use any method of averaging and
attribution that it shall deem reasonably applicable. Each Bank shall promptly,
but in no event more than ninety (90) days after it has knowledge thereof,
notify such Borrowers of any event occurring after the Closing Date, which will
entitle such Bank to compensation pursuant to this Section 5.2.
SECTION 5.3 Basis for Determining Interest Rate Inadequate or Unfair.
If with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Administrative Agent in the offshore dollar interbank
market for such Interest Period, or the Administrative Agent otherwise
determines (which determination shall be conclusive and binding on all
parties) that by reason of circumstances affecting the offshore dollar
interbank market adequate and reasonable means do not exist for
ascertaining the applicable Offshore Rate; or
(b) any Bank advises the Administrative Agent that the Offshore
Rate as determined by the Administrative Agent, will not adequately and
fairly reflect the cost to such Bank of maintaining or funding such
Loan for such Interest Period, or that the making or funding of
Offshore Rate Loans has become impracticable as a result of an event
occurring after the Closing Date which in the opinion of such Bank
materially changes such Loans;
then, so long as such circumstances shall continue:
(i) the Administrative Agent shall promptly notify Guarantor (on
behalf of the Borrowers) and the Banks thereof,
(ii) no Bank shall be under any obligation to make or continue or
convert into Offshore Rate Loans so affected, and
(iii) on the last day of the then current Interest Period for
Offshore Rate Loans so affected, such Offshore Rate Loans shall, unless
then repaid in full, automatically convert to Base Rate Loans.
Notwithstanding the foregoing, the Administrative Agent and each Bank shall take
any reasonable actions available to it (including designation of a different
Lending Office),
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consistent with legal and regulatory restrictions, that will avoid the need to
take the steps described in this Section 5.3, which will not, in the reasonable
judgment of the Administrative Agent or such Bank, be disadvantageous to the
Administrative Agent or such Bank.
SECTION 5.4 Changes in Law Rendering Certain Loans Unlawful. In the
event that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for a Bank or the Lending Office
of such Bank ("Affected Bank") to make, maintain or fund Offshore Rate Loans,
then (a) the Affected Bank shall promptly notify each of the other parties
hereto, (b) the obligation of all Banks to make or continue or convert into
Offshore Rate Loans or make Offshore Rate Loans made unlawful for the Affected
Bank shall, upon the effectiveness of such event, be suspended for the duration
of such unlawfulness, and (c) on the last day of the current Interest Period for
Offshore Rate Loans (or, in any event, if the Affected Bank so requests, on such
earlier date as may be required by the relevant law, regulation or
interpretation), the Offshore Rate Loans shall, unless then repaid in full,
automatically convert to Base Rate Loans. Notwithstanding the foregoing, the
Administrative Agent and each Bank shall take any reasonable actions available
to it (including designation of a different Lending Office), consistent with
legal and regulatory restrictions, that will avoid the need to take the steps
described in this Section 5.4, which will not, in the reasonable judgment of the
Administrative Agent or such Bank, be disadvantageous to Administrative Agent or
such Bank.
SECTION 5.5 Funding Losses. Each Borrower hereby agrees that upon
demand by any Bank to the Administrative Agent (which demand shall be made
within three (3) Business Days after receipt of notice of any payment or
proposed payment by such Borrower under this Agreement giving rise to
indemnification under this Section 5.5 and shall be accompanied by a statement
setting forth in reasonable detail using the methodology set forth in Exhibit I)
such Borrower will indemnify such Bank against any loss or expense which such
Bank may sustain or incur (including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund or maintain Offshore Rate Loans), as reasonably
determined by such Bank, as a result of (a) any payment or prepayment or
conversion of any Offshore Rate Loans of such Bank on a date other than the last
day of an Interest Period for such Offshore Rate Loan, or (b) any failure of
such Borrower to borrow on the date of any Borrowing set
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forth in any Notice of Borrowing or (c) any failure of such Borrower to convert
or continue any portion of the Loans on a date specified therefor in the Notice
of Continuation/Conversion delivered pursuant to this Agreement. For this
purpose, all notices to the Administrative Agent pursuant to this Agreement
shall be deemed to be irrevocable.
SECTION 5.6 Right of Banks to Fund Through Other Offices. Each Bank
may, if it so elects, fulfill its commitment as to any Offshore Rate Loans by
causing any of its Lending Offices to make such Offshore Rate Loans; provided,
that in such event for the purposes of this Agreement, such Loan shall be deemed
to have been made by such Bank and the obligation of the Borrower to repay such
Offshore Rate Loan shall nevertheless be to such Bank and shall be deemed held
by it, to the extent of such Offshore Rate Loan, for the account of such branch
or affiliate.
SECTION 5.7 Discretion of Banks as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Bank shall
be entitled to fund and maintain its funding of all or any part of its Loans in
any manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder shall be made as if such Bank had
actually funded and maintained each Offshore Rate Loan during each Interest
Period for such Loan through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
Offshore Rate, as the case may be, for such Interest Period.
SECTION 5.8 Replacement of Banks. If any Bank shall become affected by
any of the changes or events described in Section 5.1, 5.2, 5.3(b), or 5.4 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, 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 bank (a "Replacement Bank") acceptable to the
Administrative Agent in its reasonable discretion, to which such Replaced Bank
shall, subject to its receipt (unless a later date for the remittance thereof
shall be agreed upon by the relevant Borrowers and the Replaced Bank) of all
amounts owed to such Replaced Bank under Section 5.1, 5.2, 5.3(b), or 5.4 above,
assign all (but not less than all) of its rights, obligations, Loans and
Commitment hereunder and execute an Assignment Agreement with such Replacement
Bank; provided, that all Liabilities (except Liabilities which by the terms
hereof survive the payment in full of the Loans and termination of this
Agreement) due and payable to the Replaced Bank shall be paid in full as of the
date of such assignment. Upon any assignment by
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any Bank pursuant to this Section 5.8 becoming effective, the Replacement Bank
shall thereupon be deemed to be a "Bank" for all purposes of this Agreement and
such Replaced Bank shall thereupon cease to be a "Bank" for all purposes of this
Agreement and shall have no further rights or obligations hereunder (other than
pursuant to Sections 5.1, 5.2, 5.5, 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 5.8, the Replaced Bank shall cease to be a "Bank"
for all purposes of this Agreement and the Replacement Bank substituted therefor
upon payment to the Replaced Bank by the Replacement Bank of all amounts set
forth in this Section 5.8 without any further action of the Replaced Bank.
SECTION 5.9 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of the Administrative Agent or any Bank pursuant
to Sections 5.1, 5.2, 5.3, 5.4 and Section 5.5 shall be conclusive absent
demonstrable error. The provisions of Sections 5.1, 5.2, 5.5 and this Section
5.9 shall survive termination of this Agreement.
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 Banks, a pledge
agreement, substantially in the form of Exhibit D (herein, as the same
may be amended or modified, called the "Pledge Agreement"), whereby
each of the Borrowers shall pledge all of the issued and outstanding
common stock of Guarantor owned by each Borrower and purchased with
proceeds of the Loans.
(b) Guaranty. Guarantor shall execute and deliver to the
Administrative Agent the Guaranty, covering (i) the payment and
performance of all of the Liabilities and (ii) the other Obligations.
SECTION 6.2 Application of Proceeds from Collateral. As to each
Borrower, all proceeds received by the Administrative Agent from the sale or
disposition of any of the Direct Collateral furnished by such Borrower pursuant
to this Agreement or Indirect Collateral furnished by Guarantor pursuant to the
Guaranty shall be applied by the Administrative Agent in the following order
after receipt thereof:
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First: to the payment of all of the reasonable costs and
expenses of the Administrative Agent in connection with (a) the
administration, sale or disposition of such Direct Collateral or
Indirect Collateral, as the case may be, and (b) the
administration and enforcement of this Agreement and the other
Loan Documents, to the 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.
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 Direct Collateral, and (b) such Borrower shall
forthwith execute and deliver or cause to be executed and delivered to the
Administrative Agent, in due form for filing or recording (and pay the cost of
filing or recording the same in all public offices deemed necessary by the
Administrative Agent), such further assignment agreements, security agreements,
pledge agreements, instruments, consents, waivers, financing statements, stock
or bond powers, searches, releases, and other documents, and do such other acts
and things, all as the Administrative Agent may from time to time reasonably
request to establish and maintain to the satisfaction of the Administrative
Agent a valid perfected Lien on all Direct Collateral (free of all other Liens)
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:
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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 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, 1997, delivered to the Administrative Agent, 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, 1997 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 Direct 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 the best of such Borrower's knowledge, other governmental investigation
of the tax liability of such Borrower and there is no unresolved claim by a
taxing authority
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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 up to 4,500,000 shares of common stock of
Guarantor.
SECTION 7.10 Securities Laws. Neither such Borrower nor, to the best of
such Borrower's knowledge, any of its Affiliates, nor anyone acting on behalf of
any such Person, has directly or indirectly offered any interest in the Loans or
any other Liabilities for sale to, or solicited any offer to acquire any such
interest from, or has sold any such interest to, any Person 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
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to so qualify could reasonably be expected to have a Material Adverse Effect.
SECTION 7.14 Authorization. Each Borrower (other than any Borrower
which is an individual) (a) has the power to execute, deliver and perform this
Agreement and the other Loan Documents to which it is a party, and (b) has taken
all necessary action to authorize the execution, delivery and performance by it
of this Agreement and the other Loan Documents to which it is a party.
SECTION 7.15 Margin Regulations.
(a) None of the obligations of such Borrower to Guarantor is or will be
secured, directly or indirectly, by Margin Stock;
(b) Neither Guarantor nor any third party acting on behalf of Guarantor
has taken or will take possession of such Borrower's Margin Stock to secure,
directly or indirectly, any of the obligations of such Borrower to Guarantor;
(c) Guarantor does not and will not have any right to prohibit such
Borrower from selling, pledging, encumbering or otherwise disposing of any
Margin Stock owned by such Borrower so long as the Guaranty is in effect or any
of the obligations of such Borrower or the obligations of Guarantor under the
this Agreement, the Guaranty or any of the Loan Documents remain outstanding;
(d) Such Borrower has not granted and will not grant Guarantor or any
third party acting on behalf of Guarantor the right to accelerate repayment of
any of the obligations under this Agreement of such Borrower if any of the
Margin Stock owned by such Borrower is sold by such Borrower or otherwise; and
(e) There is no agreement or other arrangement between such Borrower
and Guarantor or any third party acting on behalf of Guarantor (and no such
agreement or arrangement shall be entered into so long as this Agreement or
Guaranty is in effect or any of the Obligations of such Borrower or the
obligations of Guarantor under the Guaranty or any of the Loan Documents remain
outstanding) under which the Margin Stock of such Borrower would be made more
readily available as security to Guarantor than to other creditors of such
Borrower.
SECTION 7.16 No Default or Event of Default. No Default or Event of
Default (as such terms are defined in the Existing Credit Agreement) has
occurred and is continuing under the Existing Credit Agreement.
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SECTION 8. COVENANTS OF BORROWERS
Each Borrower agrees that, on and after the Closing 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:
SECTION 8.1 Reports, Certificates and Other Information. Unless otherwise
provided herein, furnish or cause to be furnished to the Administrative Agent
and each Bank:
8.1.1 Borrower Financials. Upon the request of the Administrative
Agent, a financial statement of such Borrower in a form acceptable to the
Required Banks;
8.1.2 Tax Returns and Reports. If requested by the Administrative Agent
or the Required Banks, copies of all federal, state, local and foreign Tax
Returns and Reports filed by such Borrower;
8.1.3 Notice of Default and Litigation. Promptly upon learning of the
occurrence of any of the following, written notice thereof, describing the
same and the steps being taken by such Borrower with respect thereto:
(a) the occurrence of a Default;
(b) the institution of any Material Litigation or the occurrence
of any Material Litigation Development as to such Borrower;
(c) the commencement of any dispute which might reasonably be
expected to lead to the material modification, transfer, revocation,
suspension or termination of any Loan Document; or
(d) any Material Adverse Change as to such Borrower;
8.1.4 Collateral Ratio. Upon the request of the Administrative Agent or
the Required Banks, cause Guarantor (on behalf of the Borrowers) to provide
to the Administrative Agent, for the benefit of the Banks, a computation of
the Collateral Ratio certified by its chief financial officer or a vice
president with responsibility for or knowledge of financial matters of
Guarantor. Nothing contained in this Section 8.1.4 shall
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be deemed to limit in any way whatsoever the Administrative Agent's right,
on behalf of the Banks, to calculate the Loan Value of Direct Collateral or
the Loan Value of Indirect Collateral or the Collateral Ratio at any time
it deems appropriate or necessary. If after making such calculation, the
Administrative Agent or the Required Banks determine that the amount of
such Collateral Ratio is different from the Collateral Ratio most recently
provided by Guarantor or the Administrative Agent, as the case may be, the
Administrative Agent shall deliver written notice of such amount to
Guarantor (on behalf of the Borrowers); provided that the Administrative
Agent's failure to deliver such notice shall not prejudice the rights of
the Administrative Agent and the Banks or the obligations of the Borrowers
under this Agreement or the other Loan Documents; and
8.1.5 Other Information. From time to time, such other information
concerning such Borrower as the Administrative Agent or a Bank may
reasonably request.
SECTION 8.2 Taxes and Liabilities. Pay when due all of its Taxes and
other material liabilities, except as contested in good faith and by appropriate
proceedings.
SECTION 8.3 Compliance with Laws. Comply with all federal, state and
local laws, rules and regulations related to such Borrower, except where such
failure to comply could not reasonably be expected to have a Material Adverse
Effect.
SECTION 8.4 Other Agreements. Not enter into any agreement containing
any provision which (a) would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by such Borrower hereunder or in connection herewith, (b) prohibits or
restricts the ability of such Borrower to amend or otherwise modify this
Agreement, any other Loan Document or any other document executed in connection
herewith or (c) constitutes an agreement to a limitation or restriction of the
type described in clauses (a) and (b) with respect to any other Indebtedness.
SECTION 9. CONDITIONS AND EFFECTIVENESS OF
THIS AGREEMENT
The obligation of the Banks to make the Loans and the effectiveness of this
Agreement is subject to the performance by the Borrowers and Guarantor of all of
the obligations under this
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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;
9.1.3 The Administrative Agent's receipt of all common stock of
Guarantor owned by each Borrower which have been purchased with proceeds of
Loans or any of the foregoing relating thereto as required by the Pledge
Agreement, together with appropriate stock powers for such shares endorsed
in blank and/or other appropriate evidence of the perfection of the
Administrative Agent's Lien, including UCC financing statements and/or
registrations or acknowledgements of the Lien of the Administrative Agent
on any applicable brokerage account of each Borrower;
9.1.4 The Guaranty, together with the documents provided in Article V
of the Guaranty;
9.1.5 A favorable opinion of John J. Sabl, counsel of Guarantor,
substantially in the form of Exhibit F-1, and addressing such other legal
matters as the Administrative Agent may require;
9.1.6 A favorable opinion of Baker & Daniels, outside counsel to
Guarantor, substantially in the form of Exhibit F-2, and addressing such
other legal matters as the Administrative Agent may require;
9.1.7 Certified copies of each material consent, license and approval
(including, without limitation, any consent or approval required under the
Revolving Credit Agreement) required in connection with the execution,
delivery, performance, validity and enforceability of
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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;
9.1.8 A certificate of Guarantor certifying that since December 31,
1997, no event has occurred which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect as to the
Guarantor;
9.1.9 Schedules and Exhibits satisfactory to the Administrative Agent
and the Banks;
9.1.10 Evidence satisfactory to the Administrative Agent of compliance
by each Borrower and Guarantor with Regulation U and Regulation G in
connection with the financing transactions contemplated hereby;
9.1.11 Evidence of each filing, registration or recordation (and
payment of any necessary fee, Tax or expense relating thereto) with respect
to each document (including, without limitation, any UCC financing
statement) required by the Loan Documents or under law or requested by the
Administrative Agent to be filed, registered or recorded in order to
create, in favor of the Administrative Agent, for the benefit of the Banks
a valid perfected Lien on all Direct Collateral (free of all other Liens)
(other than UCC financing statements to be filed in connection with the
Loan Documents which will be delivered for filing on the Closing Date);
9.1.12 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
9.1.13 Certified copies of any indemnification or similar agreements or
arrangements between any Borrower and Guarantor relating to the
reimbursement by such Borrower of any payments made by 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), as the same may have been amended or modified.
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9.1.14 A Federal Reserve Form U-1 for the benefit of the Banks, duly
executed by each Borrower and the Guarantor, the statements made in which
shall be such, in the opinion of the Administrative Agent, as to permit the
transactions contemplated by this Agreement in accordance with Regulation
U.
9.1.15 Such other information and documents including direction
letters, powers of attorney, and Borrower authorizations to the
Administrative Agent to supplement Form U-1 statements in connection with
subsequent Loans as may reasonably be required by the Administrative Agent
and the Administrative Agent's counsel.
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 Guarantor 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;
9.2.5 No Material Adverse Change has occurred with respect to the
Guarantor or any Borrower since the date of the most recent respective
financial statements of the Guarantor and each such Borrower delivered to
the Banks pursuant to this Agreement or the Guaranty, respectively;
9.2.6 The Collateral Ratio for such Borrower, after giving effect to
such Loan, is at least 2.0 to 1.0.
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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, 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, 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, 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,
Guarantor or such Significant Subsidiary or for a substantial part of the
property of such Borrower, 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, Guarantor
or such Significant Subsidiary and if such case or proceeding is not
commenced by such Borrower, Guarantor or such Significant Subsidiary, it is
consented to or acquiesced in by such Borrower, Guarantor or such
Significant Subsidiary or remains for sixty (60) days undismissed.
10.1.3 Defaults Under this Agreement. Failure by such Borrower or
Guarantor (or any of its Subsidiaries) to comply with or perform any of the
covenants or agreements of such Borrower, Guarantor or any of its
Subsidiaries set forth in this Agreement or the
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other Loan Documents applicable to such Borrower, 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 Guarantor, in each case after notice thereof to such Borrower or
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 Guarantor 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 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 Collateral Ratio. The Collateral Ratio for such Borrower is less
than 1.5 to 1.0.
10.1.7 Defaults under Revolving Credit Agreement. An event of default
shall have occurred and be continuing under the Revolving Credit Agreement.
If the Revolving Credit Agreement is terminated, the occurrence of any
event or the existence of any circumstance which would have, had it
occurred or existed prior to such termination, constituted an event of
default, shall constitute an Event of Default hereunder; provided that if
such termination results from Guarantor's execution and delivery of a new
credit facility in replacement, restatement or substitution for the
Revolving Credit Agreement, so long as (a) the terms of such new credit
facility could not reasonably be expected to have a material adverse effect
on the Banks, Guarantor or any material provision of the Loan Documents,
(b) no Default or Event of Default exists or would result therefrom and (c)
no violation or contravention of Regulation U or Regulation G exists or
would result therefrom, the events of default set forth in such new credit
facility shall be deemed to replace and be substituted for the events of
default set forth in the Revolving Credit Agreement.
10.1.8 Defaults Under Existing Credit Agreement. An event of default
shall have occurred and be continuing under the Existing Credit Agreement.
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10.1.9 Default Under Other Indebtedness. The Guarantor or any
Significant Subsidiary defaults in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness of Guarantor or any Significant Subsidiary (other than
Indebtedness in respect of the Guaranty) in an amount in excess of
$75,000,000.
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 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 Guarantor, any 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 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
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thereto. As to matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of this Agreement or any other
Loan Document) the Administrative Agent shall not be required to exercise any
discretion, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Banks and such instructions shall be binding upon all Banks. Under
no circumstances shall the Administrative Agent have any fiduciary duties to any
Bank or be required to take any action which exposes the Administrative Agent to
personal liability or which is contrary to this Agreement or to the other Loan
Documents or applicable law.
SECTION 11.2 Liability of the Administrative Agent. None of the
Administrative Agent or any Agent-Related Person shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement and the other Loan Documents, except for its own gross negligence or
willful misconduct. Without limiting the generality of the foregoing, the
Administrative Agent: (a) may treat a Bank as such until the Administrative
Agent receives an executed Assignment Agreement entered into between a Bank and
an Eligible Assignee pursuant to Section 12.1 hereof; (b) may consult with legal
counsel (including counsel for any Borrower), independent public accountants and
other experts or consultants selected by it; (c) shall not be liable for any
action taken or omitted to be taken in good faith by the Administrative Agent in
accordance with the advice of counsel, accountants, consultants or experts; (d)
shall make no warranty or representation to any Bank and shall not be
responsible to any Bank for any recitals, statements, warranties or
representations, whether written or oral, made in or in connection with this
Agreement or the other Loan Documents; (e) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
obligations, covenants or conditions of this Agreement on the part of any
Borrower or to inspect the property (including, without limitation, any books
and records) of any Borrower; (f) shall not be responsible to any Bank for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document or other support or security
(including the validity, priority or perfection of any Lien), or any other
document furnished in connection with any of the foregoing; and (g) shall incur
no liability under or in respect of this Agreement or any other Loan Document by
action upon any written notice, statement, certificate, order, telephone
message, facsimile or other document which the Administrative Agent believes in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person.
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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, Guarantor and any of its Subsidiaries and any Person who may do
business with or own securities of 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 financial statements referred to in Section 7.3 hereof and
Section 3.7 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 and each Agent-Related Person (to the extent not reimbursed
by the Borrower), ratably according to their Percentages, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or assessed against the
Administrative Agent in any way relating to or arising out of this Agreement 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)
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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 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. 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 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, if any. Any such assignment shall
be
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pursuant to an assignment agreement, substantially in the form of Exhibit H
(an "Assignment Agreement"), duly executed by such Bank and the Eligible
Assignee, and acknowledged by the Administrative Agent. Notwithstanding the
foregoing, each Bank may make assignments to its Affiliates or to any
Federal Reserve Bank without obtaining consent of the Administrative Agent.
(b) Each assignment shall be pro rata with respect to all rights
and obligations of the assigning Bank including the 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 be deemed to be amended
to the extent, and only to the extent, necessary to reflect the addition of
such Eligible Assignee, and such Eligible Assignee shall for all purposes
be a Bank party hereto and shall have, to the extent of such assignment,
the same rights and obligations as a Bank hereunder.
(c) An assignment shall become effective hereunder when all of the
following shall have occurred:
(i) the Assignment Agreement shall have been executed by the
assigning Bank and the Eligible Assignee,
(ii) the Assignment Agreement shall have been acknowledged
by the Administrative Agent,
(iii) either the assigning Bank or the Eligible Assignee
shall have paid a processing fee of $3,000 to the Administrative Agent for
its own account; provided that the Eligible Assignee shall be solely
responsible for such processing fee with respect to any assignment pursuant
to Sections 5.8 and 13.2, and
(iv) the assigning Bank and the Administrative Agent shall
have agreed upon a date upon which such assignment shall become effective.
Upon such assignment becoming effective, the Administrative Agent shall
forward all payments of interest, principal, fees and other amounts that
would have been made to the
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assigning Bank, in proportion to the percentage of the assigning Bank's
rights transferred, to the Eligible Assignee.
(d) Upon the effectiveness of any assignment, the assigning Bank
shall be relieved from its obligations hereunder to the extent of the
obligations so assigned (except to the extent, if any, that any Borrower,
any other Bank or the Administrative Agent have rights against such
assigning Bank as a result of any default by such Bank under this
Agreement). Promptly following the effectiveness of each assignment, the
Administrative Agent shall furnish to the Borrowers and each Bank a revised
Schedule 2.1, revised to reflect such assignment.
SECTION 12.2 Participations.
(a) Each Bank may grant participations in all or any part of its
Loans, 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 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.
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(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 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, Guarantor and
its Subsidiaries which has been delivered to such Bank by such Borrower and/or
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/or 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 G in which it
agrees that it shall hold all non-public, confidential and proprietary
information obtained pursuant to the requirements of this Agreement in
accordance with safe and sound banking and business practices and may make
disclosure reasonably required by any bona fide participant, assignee or
Eligible Assignee in connection with the contemplated transfer of any portion of
the Loans or as required or requested by any Governmental Authority or
representative thereof or pursuant to legal process. For the purposes of this
Section 12.3, by execution of this Agreement each of the Banks shall be deemed
to have agreed to and executed the confidentiality agreement contained in
Exhibit G.
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SECTION 12.4 Foreign Transferees. If, pursuant to this Section 12, any
interest in this Agreement or any Loans or the Note is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any state thereof or upon the request of the Administrative
Agent, the transferor Bank shall cause such Transferee (other than any
participant), and may cause any participant, concurrently with the effectiveness
of such transfer,
(a) to represent to the transferor Bank (for the benefit of the
transferor Bank, the Administrative Agent and the Borrowers) that under
applicable law and treaties no Taxes will be required to be withheld by the
Administrative Agent,
(b) to represent to the Borrowers or the transferor Bank that
under applicable law and treaties no Taxes will be required to be withheld
with respect to any payments to be made to such Transferee in respect of
the Loans or, if applicable, the Notes,
(c) to furnish to the transferor Bank, the Administrative Agent
and the Borrowers either U.S. Internal Revenue Service Form 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:
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(a) which would modify any requirement hereunder that any
particular action be taken by all Banks or by the Required Banks, shall be
effective without the consent of each Bank;
(b) which would modify this Section 13.1, change the definition of
"Required Banks," change any Percentage for any Bank (except pursuant to an
Assignment Agreement), reduce any fees, extend the maturity date of any
Loan, reduce any rate of interest payable on the Loans or subject any Bank
to any additional obligations, shall be effective without the consent of
each Bank;
(c) which would permit the release of all or any material portion
of the Direct Collateral or Indirect Collateral or the release or
termination of Guarantor's obligations in the aggregate, or any material
obligation individually, under the Guaranty, 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 "Non-Consenting Bank") then in such case, 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 Non-Consenting 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, 5.5,
11.5 and 13.4, and Sections 7.1 and 7.2 of the Guaranty while such
Non-Consenting Bank was a Bank);
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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
Non-Consenting Bank, the Borrowers may not require one Bank to assign its rights
and obligations to a Substitute Bank unless all Non-Consenting Banks are
required to make such an assignment. Notwithstanding any Non-Consenting Bank's
failure or refusal to assign its rights, obligations, Loans and Commitment under
this Section 13.2, the Non-Consenting Bank shall cease to be a "Bank" for all
purposes of this Agreement and the Substitute Bank substituted therefor upon
payment to the Non-Consenting Bank by the Substitute Bank of all amounts set
forth in this Section 13.2 without any further action of the Non-Consenting
Bank.
SECTION 13.3 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile or
similar writing) and shall be given to such party at its address, facsimile or
telex number set forth on the signature or 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
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 2, 3, 4 and 10 shall not be effective
until received by the Administrative Agent.
SECTION 13.4 Indemnity. The Borrowers agree, jointly and severally, to
indemnify each Bank, its Affiliates and each of their respective directors,
officers, employees, persons controlling or controlled by any of them or their
respective agents, consultants, attorneys and advisors (the "Indemnified
Parties") and hold each Indemnified Party harmless from and against any and all
liabilities, losses, claims, damages, costs and expenses of any kind to which
any of the Indemnified Parties may become subject, whether directly or
indirectly (including, without limitation, the reasonable fees and disbursements
of counsel for any Indemnified Party), relating to or arising out of this
Agreement, the other Loan Documents, or any actual or
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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 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.
SECTION 13.7 GOVERNING LAW. THIS AGREEMENT, THE NOTES, IF ANY, 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 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 Closing
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
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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 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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Executed as of the day and year first above written at Chicago, Illinois.
BORROWERS:
[INSERT BORROWERS]
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ADMINISTRATIVE AGENT:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/Elizabeth W. F. Bishop
------------------------------
Name: Elizabeth W. F. Bishop
Title:Vice President
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<PAGE>
BANKS:
BANK OF AMERICA NATIONAL TRUST AND
AND SAVINGS ASSOCIATION
By: /s/Elizabeth W. F. Bishop
------------------------------
Name: Elizabeth W. F. Bishop
Title:Vice President
Lending Office
Address: 231 S. LaSalle Street
Chicago, IL 60697
Attention: Denise M. Christy
Telephone: (312) 828-4184
Facsimile: (312) 974-9524
Notice Address:
Address: 231 S. LaSalle Street
Chicago, IL 60697
Attention: Debra Basler
Telephone: (312) 828-3734
Facsimile: (312) 974-0889
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ACCEPTANCE AND ACKNOWLEDGEMENT
CONSECO, INC. hereby acknowledges and agrees to make such deliveries as
are required by it and comply with the covenants and other provisions applicable
to it contained in this Agreement.
CONSECO, INC.
By:/s/Rollin M. Dick
-------------------------------
Name: Rollin M. Dick
Title:Executive Vice President and
Chief Financial Officer
Notice Address:
11825 N. Pennsylvania Street
Carmel, IN 46032
Attention: John J. Sabl
Telephone: (317) 817-6163
Facsimile: (317) 817-6327
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BORROWER PLEDGE AGREEMENT
dated as of August 21, 1998
among
THE INDIVIDUALS LISTED ON THE SIGNATURE PAGES HERETO
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
================================================================================
<PAGE>
BORROWER PLEDGE AGREEMENT
THIS BORROWER PLEDGE AGREEMENT (this "Agreement"), dated as of August
21, 1998, 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 August 21,
1998, 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).
<PAGE>
"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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<PAGE>
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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<PAGE>
(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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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<PAGE>
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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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 time to
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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 have entered into this Agreement on the
date first above written.
Stephen C. Hilbert August 1998 Trust
By: /s/Stephen C. Hilbert
--------------------------------
Stephen C. Hilbert, Trustee
Notice Address:
11825 N. Pennsylvania Street
Carmel, IN 46032
Attention: Stephen C. Hilbert
Telephone Number: 317-817-6150
<PAGE>
SCHEDULE 1
LISTING OF STOCK PLEDGED
Number of
Borrower Certificate No. Shares
- -------- --------------- ---------
CERTIFICATE OF ADJUSTMENT
This Certificate of Adjustment is dated this 11th day of February, 1997
with respect to the adjustment to Warrant No. TH-1 of Conseco, Inc. pursuant to
Section 4.1 of the Warrant.
In connection with the 2-for-1 stock split effective this 11th day of
February, 1997, the holder of the above-referenced Warrant is now entitled to
acquire 20,000 shares of Common Stock (as defined in the Warrant) at a purchase
price of $19.64285 per share.
IN WITNESS WHEREOF, the undersigned has executed this certificate
effective as of the date first above written for on behalf of Conseco, Inc.
CONSECO, INC.
By: /s/ Rollin M. Dick
----------------------------
Rollin M. Dick
Executive Vice President and
Chief Financial Officer
1999 DIRECTOR AND EXECUTIVE OFFICER
STOCK PURCHASE PLAN
OF CONSECO, INC.
1. PURPOSE. The 1999 Director and Executive Officer Stock Purchase Plan
(the "Plan") of Conseco, Inc. ("Conseco" or the "Company") is adopted
to facilitate the purchase by the Directors and Executive Officers of
Conseco of Conseco's common stock ("Common Stock"). 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 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 or an executive officer
of the Company("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 a portion of the Common Stock 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.
Up to an aggregate of [number of shares that can be purchased for not
more than $150 million] shares of Common Stock may be purchased by all
Participants, with the individual allocations to be approved by the
Chief Executive Officer of Conseco. 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 (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.
Conseco has arranged the opportunity for each Participant to obtain a
loan through Chase Manhattan Bank and other participating financial
institutions (collectively, the "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.
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.
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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 may 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 or the Participant Designee, as the case may be, may elect
to cause Conseco to pay the estate or the Participant Designee, as the
case may be, an amount equal to the balance of the Participant's Loan
minus the value of such shares based upon the closing price of Common
Stock on the New York Stock Exchange on the first trading date after
the date of death. The estate or the Participant Designee, as the case
may be, of a deceased Participant must make such election, in writing,
within 30 days after written notice from Conseco. 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 balance of the Participant's
Loan minus the value of such shares based upon the closing price of
Common Stock on the New York Stock Exchange on the first trading date
after the final date of employment. The Participant must make such
election, in writing, within 30 days after written notice from Conseco.
"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
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by Conseco of amounts described in this Section 8 is conditioned on the
payment in full of the Participant's Loan (if any), the release of the
Company's guarantee with respect thereto, and the payment in full of
the Interest Payment Loan. This Section 8 will terminate January 1,
2001.
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,
(including, but not limited to, offsetting amounts owed to Conseco
against wages, fees or other amounts owed to the Participant from
Conseco) 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. LOAN OF INTEREST PAYMENTS AND FEES. At the discretion of the
Directors, Conseco or one of its subsidiaries (the "Lender") may loan
funds to the Participants equal to the amount of current interest
payments and up-front fees owed by the Participants pursuant to the
Credit Agreement (collectively, the "Interest Payment Loans"). All
Interest Payment Loans shall be evidenced by promissory notes, the
terms and conditions of which shall be determined at the sole
discretion of the Lender. If a Participant specifies a Participant
Designee, the Participant shall enter into an indemnification agreement
to indemnity the Lender for any losses under the Interest Payment Loan.
11. MARGIN REGULATIONS.
(a) None of the obligations of the Participants to Conseco or
one of its subsidiaries (collectively, Conseco and its subsidiaries
shall be referred to as "Conseco" for the purposes of this Section 11)
hereunder is or will be secured, directly or indirectly, by Margin
Stock (as such term is defined in Regulation U promulgated by the Board
of Governors of the Federal Reserve System);
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(b) Neither Conseco nor any third party acting on behalf of
Conseco has taken or will take possession of a Participant's Margin
Stock to secure, directly or indirectly, any of the obligations of such
Participant to Conseco;
(c) Conseco does not and will not have any right to prohibit
such Participant from selling, pledging, encumbering or otherwise
disposing of any Margin Stock owned by such Participant so long as the
obligations of such Participant under this Plan remain outstanding;
(d) Such Participant has not granted and will not grant Conseco
or any third party acting on behalf of Conseco the right to accelerate
repayment of any of the obligations under this Plan of such Participant
if any of the Margin Stock owned by such Participant is sold by such
Participant or otherwise; and
(e) There is no agreement or other arrangement between such
Participant and Conseco or any third party acting on behalf of Conseco
(and no such agreement or arrangement shall be entered into so long as
this Plan is in effect or any of the obligations of such Participant
under this Plan remain outstanding) under which the Margin Stock of
Participant would be made more readily available as security to Conseco
than to other creditors of such Participant.
12. 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 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
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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.
13. OTHER TERMINATION. If a Participant ceases to be a Director,
officer or employee of Conseco in circumstances other than as described
in section 12, Conseco shall notify the Participant or Participant
Designee that such Participant or Participant Designee shall have the
option to either (i) within 30 days of the notice, retire the Loan and
release Conseco's guaranty or (ii) continue the Loan and the Interest
Payment Loan until their maturity date with Conseco's guaranty, but
commence paying all future interest payments on such Loans as due.
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:
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(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 higher of (1) the market value of the
Related Shares at the Participant's termination date and (2)
the original purchase price of the Related Shares 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.
14. 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.
15. PAYMENT OF EXPENSES. The expenses of administering the Plan
shall be paid by the Company except those expenses which are expenses
of the Participants.
16. 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.
17. 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
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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.
18. 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.
19. GOVERNING LAW. This Plan shall be construed in accordance with the
laws of the State of Indiana.
20. APPROVAL. If a Participant purchases Purchased Shares, such purchase
shall constitute formal approval of this Plan by the Participant and
such Participant's agreement to be bound by the terms and conditions of
the Plan.
Effective Date: September 7, 1999
8
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CREDIT AGREEMENT
Dated as of September 15, 1999
among
THE INDIVIDUALS LISTED ON THE SIGNATURE PAGES HERETO,
as Borrowers,
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,
and
THE CHASE MANHATTAN BANK
as Administrative Agent
================================================================================
<PAGE>
Page The following Table of Contents has been inserted for convenience only and
does not constitute a part of this Agreement.
TABLE OF CONTENTS
PAGE
----
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS................................. 1
1.1 Certain Defined Terms.............................................. 1
1.2 Other Definitional Provisions......................................12
1.3 Accounting and Financial Determinations............................13
SECTION 2. THE COMMITMENTS AND THE LOANS....................................13
2.1 Commitment.........................................................13
2.2 Procedure for Borrowings...........................................14
2.3 Funding Reliance for Borrowings....................................15
2.4 Conversion and Continuation Elections..............................15
2.5 Repayment of Loans.................................................16
2.6 Loan Accounts; Record Keeping......................................16
SECTION 3. INTEREST AND FEES................................................17
3.1 Interest Rates.....................................................17
3.2 Default Interest Rate..............................................17
3.3 Interest Payment Dates.............................................18
3.4 Setting and Notice of Rates........................................18
3.5 Fees...............................................................18
3.6 Computation of Interest and Fees...................................18
SECTION 4. PAYMENTS AND PREPAYMENTS.........................................18
4.1 Voluntary Termination or Reduction of Commitments..................18
4.2 Optional Prepayments...............................................19
4.3 Payments by the Borrowers..........................................19
4.4 Application of Prepayments.........................................20
4.5 Sharing of Payments................................................20
4.6 Setoff.............................................................20
4.7 Net Payments.......................................................21
SECTION 5. CHANGES IN CIRCUMSTANCES.........................................22
5.1 Increased Costs....................................................22
5.2 Change in Rate of Return...........................................23
5.3 Basis for Determining Interest Rate Inadequate or Unfair...........23
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Page
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5.4 Changes in Law Rendering Certain Loans Unlawful....................24
5.5 Funding Losses.....................................................24
5.6 Right of Banks to Fund Through Other Offices.......................25
5.7 Discretion of Banks as to Manner of Funding........................25
5.8 Replacement of Banks...............................................25
5.9 Conclusiveness of Statements; Survival of Provisions...............25
SECTION 6. COLLATERAL AND OTHER SECURITY....................................26
6.1 Collateral Documents...............................................26
6.2 Application of Proceeds from Collateral............................26
6.3 Further Assurances.................................................26
SECTION 7. REPRESENTATIONS AND WARRANTIES OF BORROWERS......................27
7.1 No Conflict........................................................27
7.2 Validity...........................................................27
7.3 Financial Statements...............................................27
7.4 Material Adverse Change............................................27
7.5 Litigation and Contingent Obligations..............................27
7.6 Liens..............................................................28
7.7 Taxes..............................................................28
7.8 Accuracy of Information............................................28
7.9 Proceeds...........................................................28
7.10 Securities Laws...................................................28
7.11 Solvency..........................................................28
7.12 No Default........................................................28
7.13 Organization, etc.................................................28
7.14 Authorization.....................................................29
7.15 Margin Regulations................................................29
7.16 No Default or Event of Default....................................29
SECTION 8. COVENANTS OF BORROWERS...........................................29
8.1 Reports, Certificates and Other Information........................30
8.1.1 Borrower Financials.......................................30
8.1.2 Tax Returns and Reports...................................30
8.1.3 Notice of Default and Litigation..........................30
8.1.4 Collateral Ratio..........................................30
8.1.5 Other Information.........................................31
8.2 Taxes and Liabilities..............................................31
8.3 Compliance with Laws...........................................31
8.4 Other Agreements..............................................31
SECTION 9. CONDITIONS AND EFFECTIVENESS OF
THIS AGREEMENT......................................................31
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9.1 Initial Loans......................................................31
9.2 All Loans..........................................................33
SECTION 10. EVENTS OF DEFAULT AND THEIR EFFECT..............................34
10.1 Events of Default.................................................34
10.1.1 NonPayment of Loans, etc. ...............................34
10.1.2 Bankruptcy, Insolvency, etc..............................34
10.1.3 Defaults Under this Agreement............................34
10.1.4 Representations and Warranties...........................35
10.1.5 Collateral Ratio.........................................35
10.1.6 Defaults under Revolving Credit Agreement................35
10.1.7 Defaults Under Existing Credit Agreement.................35
10.1.8 Default Under Other Indebtedness.........................35
10.2 Effect of Event of Default.........................................35
SECTION 11. THE AGENT.......................................................36
11.1 Authorization and Action...........................................36
11.2 Liability of the Administrative Agent..............................36
11.3 Administrative Agent and Affiliates................................37
11.4 Bank Credit Decision...............................................37
11.5 Indemnification....................................................37
11.6 Successor Agent....................................................37
SECTION 12. ASSIGNMENTS AND PARTICIPATIONS..................................38
12.1 Assignments........................................................38
12.2 Participations.....................................................39
12.3 Disclosure of Information..........................................40
12.4 Foreign Transferees................................................40
SECTION 13. MISCELLANEOUS...................................................41
13.1 Waivers and Amendments.............................................41
13.2 Failure to Consent.................................................42
13.3 Notices............................................................42
13.4 Indemnity..........................................................43
13.5 Subsidiary References..............................................43
13.6 Captions...........................................................43
13.7 GOVERNING LAW......................................................43
13.8 Counterparts.......................................................43
13.9 SUBMISSION TO JURISDICTION; WAIVER OF VENUE........................44
13.10 Successors and Assigns............................................44
13.11 WAIVER OF JURY TRIAL..............................................44
iii
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Page
----
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 Notice of Conversion/Continuation
EXHIBIT D Form of Pledge Agreement
EXHIBIT E Form of Guaranty
EXHIBIT F-1 Form of Opinion of John J. Sabl, counsel to Guarantor
EXHIBIT F-2 Form of Opinion of Baker & Daniels, outside counsel to Guarantor
EXHIBIT G Form of Confidentiality Letter
EXHIBIT H Form of Assignment Agreement
EXHIBIT I Funding Loss Formula
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of September 15, 1999, 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 THE CHASE MANHATTAN BANK
("Chase"), as administrative agent for the Banks (herein in such capacity,
together with any successors thereto in such capacity, called the
"Administrative Agent").
Background
WHEREAS, the Borrowers have requested that the Banks agree to make term
loans in an aggregate principal amount of $150,000,000;
WHEREAS, the proceeds of the term loans to be made under this Agreement
will be used by the Borrowers solely to purchase shares of common stock of
Conseco, Inc.;
WHEREAS, Conseco, Inc. will guarantee all term loans made hereunder;
and
WHEREAS, the Banks are willing, on the terms and conditions hereinafter
set forth, to make the term loans to the Borrowers;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" - see Preamble.
"Administrative Agent's Office" shall mean 270 Park Avenue, New York,
New York 10017, or such other address designated by the Administrative
Agent (or any successor agent) to the Borrowers and the Banks from time to
time.
"Affected Bank" - see Section 5.4.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, owns, holds, controls, is controlled by or is under
common control with such Person (including
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all beneficial control as a trustee, guardian or other fiduciary). A Person
shall be deemed to be "controlled by" any other Person if such other Person
possesses, directly or indirectly, power (a) to vote 10% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors, managing general partners or managers; or (b) to
direct or cause the direction of the management and policies of such Person
whether through the ownership of voting securities, membership interests,
by contract or otherwise.
"Agent-Related Persons" shall mean Chase and any successor agent
arising under Section 11.6, together with its Affiliates (including, in the
case of Chase, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agreement" shall mean this Credit Agreement, as amended or modified.
"Arranger" shall mean Chase Securities Inc., solely in its capacity as
arranger.
"Assignment Agreement" see Section 12.1.
"Bank" or "Banks" - 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 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" for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Rate for such day plus 1/2 of 1%. For purposes
hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to be
the lowest rate of interest charged by Chase in connection with extensions
of credit to debtors); "Base CD Rate" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; "Three- Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if
such day shall not be a Business Day, the next preceding Business Day) by
the Board of Governors of the Federal Reserve System (the "Board") through
the public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center
banks in New York City received
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<PAGE>
at approximately 10:00 A.M., New York City time, on such day (or, if such
day shall not be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; and "Federal Funds
Rate" shall mean, for any day, the rate at which U.S. Dollar deposits with
an overnight maturity are offered by Chase in the Federal funds market at
11:00 a.m., New York City time, on such day. Any change in the Base Rate
due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Three-Month Secondary
CD Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" shall mean a Loan bearing interest at the Base Rate.
"Borrower" or "Borrowers" - see Preamble.
"Borrower Collateral Percentage" shall mean, as to any Borrower, a
fraction, the numerator of which is equal to the principal amount of the
Loans to such Borrower then outstanding hereunder and the denominator of
which is equal to the aggregate principal amount of the Loans to all
Borrowers then outstanding hereunder.
"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) November 15,
1999 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 and, if the applicable
Business Day relates to any Offshore Rate Loan, means such a day on which
dealings are carried on in the applicable offshore dollar interbank market.
"C/D Assessment Rate" for any day as applied to any Base Rate Loan, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund maintained by the Federal Deposit Insurance
Corporation (the "FDIC") classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. ss. 327.4 (or any successor
provision) to the FDIC (or any successor) for the FDIC's (or such
successor's) insuring time deposits at offices of such institution in the
United States.
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"C/D Reserve Percentage" for any day as applied to any Base Rate Loan,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars having a maturity of
30 days or more.
"Charges" see Section 4.7.
"Chase" - see Preamble.
"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 Ratio" shall mean, as to any Borrower, the ratio of (a) the
sum of the Loan Value of Direct Collateral of such Borrower plus the
Borrower Collateral Percentage of the Loan Value of Indirect Collateral to
(b) the aggregate principal amount of the Loans of such Borrower then
outstanding.
"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.
"Conversion/Continuation Date" shall mean any date on which, under
Section 2.4, Guarantor (on behalf of the Borrowers) (a) converts Loans of
one Type to another Type, or (b) continues as Loans of the same Type, but
with a new Interest Period, Loans having Interest Periods expiring on such
date.
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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.
"Direct Collateral" shall mean, with respect to any Borrower, all
property, assets and/or rights on or in which a Lien is now or hereafter
granted by such Borrower to the Administrative Agent (or to any agent,
trustee or other party acting on behalf of the Administrative Agent) for
the benefit of the Banks, pursuant to the Pledge Agreement and any other
instruments or documents provided for herein or therein or delivered
hereunder or thereunder or in connection herewith or therewith.
"Dollars" and the sign "$" shall mean lawful money of the United States
of America.
"Eligible Assignee" shall mean any bank, pension fund, mutual fund,
investment fund or other financial institution (other than an insurance
company or any Affiliate of an insurance company except those to which the
Borrowers consent).
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate."
"Event of Default" - see Section 10.1.
"Existing Credit Agreement" shall mean the Amended and Restated Credit
Agreement, dated as of August 21, 1998 (as amended or modified through the
date hereof), among the borrowers listed on the signature pages thereof,
certain of the Banks and Bank of America National Trust and Savings
Association, as 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 the opinions and
pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements
of the Financial Accounting Standards Board (or agencies with similar
functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority)
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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.
"Guarantor" shall mean Conseco, Inc., an Indiana corporation.
"Guaranty" shall mean the Guaranty of Guarantor, dated as of the date
hereof, executed and delivered in favor of the Administrative Agent, for
the benefit of the Banks, in substantially the form of Exhibit E.
"Hedging Obligations" shall have the meaning provided in the Revolving
Credit Agreement.
"IBOR" has the meaning set forth in the definition of Offshore Rate.
"Indebtedness" shall mean, with respect to any Person at any date,
without duplication: (a) all obligations of such Person for borrowed money
or in respect of loans or advances; (b) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (c) all
obligations in respect of letters of credit, whether or not drawn, and
bankers' acceptances issued for the account 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.
"Indirect Collateral" shall mean any assets of Guarantor which, as
determined by the Administrative Agent in its sole discretion exercised in
good faith, shall be deemed to "indirectly secure" the Liabilities pursuant
to Regulation U as a result of the negative pledge agreement and/or other
covenants of Guarantor set forth in the Guaranty.
"Interest Payment Date" shall mean, as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan
and, as to any Base Rate Loan, the last Business Day of each calendar
quarter and each date such Loan is converted into another Type of Loan,
provided, however, that if any Interest Period for an Offshore Rate Loan
exceeds three months, the date that falls three months (as the case may be)
after the beginning of such Interest Period and after each Interest Payment
Date thereafter is also an Interest Payment Date.
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"Interest Period" shall mean, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two or
three weeks (for Interest Periods ending prior to the Borrowing Termination
Date), or one, two, three or six months thereafter as selected by Guarantor
(on behalf of the Borrowers) in its Notice of Borrowing or Notice of
Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to
the following Business Day unless, in the case of an Offshore Rate
Loan, the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period of a duration of one month or longer
pertaining to an Offshore Rate Loan that begins on the last
Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period;
(c) any Interest Period which commences prior to the Borrowing
Terminate Date and would otherwise end on a date following the
Borrowing Termination Date shall end on the Borrowing Termination
Date;
(d) no more than one Interest Period shall be in effect at any
time after the Borrowing Termination Date; and
(e) no Interest Period for any Loan shall extend beyond the
Termination Date.
"Lending Office" shall mean, with respect to any Bank, any office
designated by such Bank in its sole discretion beneath its signature hereto
(or in an Assignment Agreement) or otherwise from time to time by written
notice to the Borrowers and the Administrative Agent, as a Lending Office
for purposes hereunder. A Bank may designate separate Lending Offices for
the purposes of making and maintaining Loans.
"Liabilities" shall mean, as to any Borrower, all obligations of such
Borrower to the Banks or the Administrative Agent, howsoever created,
arising or evidenced, whether direct or indirect, joint or several,
absolute or contingent, or now or hereafter existing, or due or to become
due, which arise out of or in connection with this Agreement, the Notes, if
any, or the other Loan Documents.
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<PAGE>
"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other) or other priority or preferential arrangement of any
kind or nature whatsoever.
"Litigation" shall mean any litigation (including, without limitation,
any governmental proceeding or arbitration proceeding), tax audit or
investigative proceeding, claim, lawsuit, and/or investigation pending or
threatened against or involving any Borrower, or Guarantor or any of its
Subsidiaries or any of its or their businesses or operations.
"Loan(s)" shall have the meaning set forth in Section 2.1 and may be a
Base Rate Loan or an Offshore Rate Loan (each, a "Type of Loan").
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
if any, the Guaranty, the Pledge Agreement, the Syndication Letter
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.
"Loan Value of Direct Collateral" shall mean, with respect to any
Borrower, (a) the current market value of the common stock of Guarantor
pledged by such Borrower to the Administrative Agent, for the benefit of
the Banks, under the Pledge Agreement, plus (b) without duplication, the
current market value of any other Direct Collateral constituting Margin
Stock pledged by such Borrower to the Administrative Agent, for the benefit
of the Banks, under any Loan Document, plus (c) without duplication, the
maximum loan value of all Direct Collateral of such Borrower not
constituting Margin Stock, it being understood that the maximum loan value
of Direct Collateral shall be its good faith loan value (i.e., the value of
such Direct Collateral as determined from time to time by the
Administrative Agent (with the concurrence of the Required Lenders)
exercising sound banking judgment) without regard to such Borrower's assets
securing any unrelated transactions. The Administrative Agent and/or the
Required Lenders shall have the right at any time in their sole discretion
to recompute the Loan Value of Direct Collateral.
"Loan Value of Indirect Collateral" shall mean, with respect to any
Borrower, the sum of the maximum loan value of Indirect Collateral under
Regulation U, after taking into account any other Indebtedness of Guarantor
"indirectly secured" (as set forth in Regulation U and the interpretations
thereof) by the assets of Guarantor, it being understood that (a) the
maximum loan value of Indirect Collateral constituting Margin Stock shall
be 50% of its current market value and (b) the maximum loan value of
Indirect Collateral not constituting Margin Stock shall be its good faith
loan value (i.e., the value of such Indirect Collateral as determined from
time to time by the Administrative Agent (with the concurrence of the
Required Lenders) exercising sound banking judgment), in each case without
regard to Guarantor's assets securing any unrelated transactions. Until
further notice from the Administrative Agent to the Borrower, the Loan
Value of Indirect Collateral shall be deemed to be $2,000,000,000, it being
understood
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<PAGE>
that the Administrative Agent and/or the Required Lenders shall have the
right at any time in their sole discretion to recompute the Loan Value of
Indirect Collateral.
"Margin Stock" shall mean "margin stock" as such term is defined in
Regulation U.
"Material Adverse Change" or "Material Adverse Effect" shall mean any
change, event, action, condition or effect which individually or in the
aggregate (a) impairs the validity or enforceability of this Agreement or
any other Loan Document, or (b) materially and adversely affects the
consolidated business, operations, financial prospects or condition of
Guarantor and its Subsidiaries taken as a whole, or (c) materially impairs
the ability of any Borrower or Guarantor to perform his, hers or its
obligations under this Agreement or any of the other Loan Documents to
which he, she or it is a party, or (d) materially 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.
"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.
"Notice of Conversion/Continuation" shall mean a notice in
substantially the form of Exhibit C.
"Obligations" shall have the meaning provided in the Guaranty.
"Offshore Rate" shall mean, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/100th of 1%) determined by
the Administrative Agent as follows:
Offshore Rate = IBOR
----------------------------------
1.00 Eurodollar Reserve Percentage
Where,
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"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on
such day (whether or not applicable to any Bank) under regulations
issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities"); and
"IBOR" shall mean the rate of interest per annum (computed for
the actual number of days elapsed on the basis of a 360-day year)
appearing on Page 3750 of the Telerate Service (or any successor
or substitute page of such Service, or any successor to or
substitute to such Service, providing rate quotations comparable
to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately
11:00 A.M. (London time) two (2) Business Days prior to the
commencement of such Interest Period, provided that, for Interest
Periods shorter than one month, IBOR shall be derived from such
source as the Administrative Agent shall reasonably determine.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" shall mean a Loan that bears interest based on the
Offshore Rate.
"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" shall mean the Pledge Agreement, dated as of the
date hereof, substantially in the form of Exhibit D.
"Regulation "D" and "U" shall mean Regulation D and Regulation U,
respectively, or any successor regulation thereto, promulgated by the FRB
as from time to time in effect.
"Replaced Bank" - see Section 5.8.
"Replacement Bank" - see Section 5.8.
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"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 senior or executive vice president; or, in the case of each such
officer, the individual designated by such officer to act on its behalf
hereunder. If 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
(five-year facility), dated as of September 25, 1998, among Guarantor, the
Revolving Credit Banks, Bank of America National Trust and Savings
Association, as agent, and others, as the same may be amended, modified,
replaced, restated or substituted from time to time provided, that each of
the Banks has received at least 10 days' prior written notice of any such
amendment, modification replacement, restatement or substitution and the
Required Banks (either directly or through the Administrative Agent) have
not prior to the end of such 10 day period given notice to Guarantor that
such amendment, modification, replacement, restatement or substitution is
not acceptable.
"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).
"Significant Subsidiary" shall have the meaning provided in the
Revolving Credit Agreement as in effect on the Closing Date.
"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
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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 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.
"Subsidiary" shall have the meaning provided in the Revolving
Credit Agreement as in effect on the Closing Date.
"Substitute Bank" - see Section 13.2.
"Syndication Letter Agreement" shall mean the Syndication Letter
Agreement, dated the date hereof, among Guarantor, the Administrative
Agent and the Arranger.
"Taxes" or "Tax" shall mean all taxes of any nature whatsoever and
howsoever denominated, including, without limitation, retaliatory,
income, premium, withholding, guaranty fund or similar assessments,
excise, import, governmental fees, duties and all other charges, as
well as additions to tax, penalties and interest thereon, imposed by
any Governmental Authority.
"Termination Date" shall mean, as to any Borrower, the earlier of
(a) March 31, 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.
"Type" or "Type of Loan" has the meaning specified in the
definition of "Loan."
"UCC" shall mean the Uniform Commercial Code or comparable statute
or any successor statutes thereto, as in effect from time to time in
the relevant jurisdiction.
"United States" and "U.S." each means the United States of
America.
SECTION 1.2 Other Definitional Provisions. (a) All terms defined in
this Agreement shall have the above defined meanings when used in any Loan
Document, or any certificate, report or other
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document made or delivered pursuant to this Agreement, unless the context
therein shall clearly otherwise require.
(b) The words "hereof," "herein," "hereunder" and similar terms when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; and subsection, Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(c) The words "amended or modified" when used in any Loan Document
shall mean with respect to such Loan Document as from time to time, in whole or
in part, amended, modified, supplemented, restated, refinanced, refunded or
renewed.
(d) In the computation of periods of time in this Agreement from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
(e) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Administrative
Agent merely because of the Administrative Agent's or Banks' involvement in
their preparation.
SECTION 1.3 Accounting and Financial Determinations. For purposes of
this Agreement, unless otherwise specified or the context otherwise requires,
all accounting terms used in any Loan Document shall be interpreted, all
accounting determinations and computations hereunder or thereunder shall be
made, and all financial statements required to be delivered hereunder or
thereunder shall be prepared, in accordance with GAAP.
SECTION 2. THE COMMITMENTS AND THE LOANS
Subject to the terms and conditions of this Agreement and relying on
the representations and warranties herein set forth:
SECTION 2.1 Commitment. Each of the Banks, severally and for itself
alone, agrees, on the terms and conditions set forth herein, to make term loans
(herein collectively called the "Loans" and individually called a "Loan") to the
Borrowers in the aggregate principal amount for each Bank set forth on Schedule
2.2 from the Closing 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 make 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 make hereunder to the
Borrowers shall not at any one time exceed $150,000,000 (or such reduced amount
as may be fixed
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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 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 (i) 4:00 P.M. (New York City time)
three Business Days prior to the requested Borrowing Date, in the case of
Offshore Rate Loans with Interest Periods shorter than one month borrowed prior
to the Borrowing Termination Date, (ii) 12:00 Noon (New York City time) three
Business Days prior to the requested Borrowing Date, in the case of all other
Offshore Rate Loans, and (iii) 12:00 Noon (New York City time) on the requested
Borrowing Date, in the case of Base Rate Loans, 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 last
Borrowing to be made under this Agreement shall not be required to be
in an integral multiple of $100,000;
(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;
(iii) the Type of Loans comprising such Borrowing; and
(iv) with respect to any Borrowing comprised of Offshore Rate
Loans, the duration of the Interest Period applicable to such Offshore
Rate Loan included in such notice. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing comprised
of Offshore Rate Loans, such Interest Period shall be one (1) months.
(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 2:00 P.M. (New York
City 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.
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<PAGE>
(d) After giving effect to any Borrowing, unless the Administrative
Agent shall otherwise consent, there may not be more than five (5) Interest
Periods in effect for all Loans then outstanding.
SECTION 2.3 Funding Reliance for Borrowings. Unless the Administrative
Agent shall have been notified by telephone, confirmed in writing, by any Bank
by 12:30 P.M. (New York City 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 the Type of Loans comprising 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.
SECTION 2.4 Conversion and Continuation Elections. (a) Guarantor (on behalf
of the Borrowers) may, upon irrevocable written notice to the Agent in
accordance with Section 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans, or
as of the last day of the applicable Interest Period, in the case of
Offshore Rate Loans, to convert any such Loans (or any part thereof in an
amount not less than $5,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof) into Loans of any other Type; or
(ii) elect as of the last day of the applicable Interest Period, to
continue any Offshore Rate Loans having Interest Periods expiring on such
day (or any part thereof) in an amount not less than $5,000,000, or that is
in an integral multiple of $1,000,000 in excess thereof;
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than
$5,000,000, such Offshore Rate Loans shall automatically convert into Base Rate
Loans, and on and after such date the right of Guarantor (on behalf of the
Borrowers) to continue such Loans as, or convert such Loans into, Offshore Rate
Loans, as the case may be, shall terminate.
(b) Guarantor (on behalf of the Borrowers) shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 11:00 A.M.
(New York City time)
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at least (i) three Business Days in advance of the Conversion/Continuation Date,
if the Loans are to be converted into or continued as Offshore Rate Loans; and
(ii) one Business Day in advance of the Conversion/Continuation Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
(D) in the case of conversions into Offshore Rate Loans, the duration
of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, Guarantor (on behalf of the Borrowers) has failed to select
timely a new Interest Period to be applicable to such Offshore Rate Loans or if
any Default or Event of Default then exists, Guarantor (on behalf of the
Borrowers) shall be deemed to have elected to convert such Offshore Rate Loans
into Base Rate Loans effective as of the expiration date of such Interest
Period.
(d) The Administrative Agent will promptly notify each Bank of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by Guarantor (on behalf of the Borrowers), the Administrative Agent
will promptly notify each Bank of the details of any automatic conversion. All
conversions and continuations shall be made ratably according to the respective
outstanding principal amounts of the Loans with respect to which the notice was
given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the existence
of a Default or Event of Default, Guarantor (on behalf of the Borrowers) may not
elect to have a Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Loans,
unless the Administrative Agent shall otherwise consent, there may not be more
than five (5) Interest Periods in effect for all Loans hereunder.
SECTION 2.5 Repayment of Loans. Subject to the provisions of Sections 4.1,
4.2 and 10.2, the Loans of each Bank shall be payable in full (and each Borrower
agrees to pay such Loans) on the Termination Date.
SECTION 2.6 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
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Banks to the Borrowers and the interest and payments thereon; provided, that in
the event of a conflict between information recorded by the Administrative Agent
and any Bank as to such Bank's Loans, the records of the Administrative Agent
absent manifest error shall control. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligations of any
Borrower hereunder or to pay any amount owing with respect to the Loans.
(b) The Loans made by the Banks to each Borrower shall, upon the
request of the Administrative Agent, be evidenced by a Note executed and
delivered by such Borrower payable to the Administrative Agent, for the benefit
of the Banks, in an aggregate principal amount equal to the aggregate
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 AND FEES
SECTION 3.1 Interest Rates. With respect to each Loan made to any Borrower
hereunder, such Borrower hereby promises to pay interest on the unpaid principal
amount thereof for the period commencing on the Borrowing Date of such Loan
until such Loan is paid in full as follows:
(a) at all times while such Loan or any portion thereof is a Base Rate
Loan, at a rate per annum equal to the Base Rate from time to time in
effect.
(b) at all times while such Loan or any portion thereof is an Offshore
Rate Loan, at a rate per annum equal to the Offshore Rate, plus the
Applicable Facility Fee plus the Applicable Offshore Rate Margin (each as
defined in the Revolving Credit Agreement) plus .40% per annum.
SECTION 3.2 Default Interest Rate. Notwithstanding the provisions of
Section 3.1, in the event that any Default under Section 10.1.2 or any Event of
Default shall occur with respect to any Borrower, such Borrower hereby promises
to pay, automatically in the case of a Default under Section 10.1.2 or upon
demand therefor by the Administrative Agent for any Event of Default (other than
pursuant to Section 10.1.2), interest on the unpaid principal amount of the
Loans of such Borrower (and interest thereon to the extent permitted by law) for
the period commencing on the date of such Default or demand until such Loans are
paid in full or such Default or Event of Default is cured or waived in
accordance with Sections 10.2 and 13.1 at a rate per annum equal to the
applicable interest
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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 Setting and Notice of Rates. The applicable Offshore Rate shall
be determined by the Administrative Agent. Each determination of the applicable
Offshore Rate shall be conclusive and binding upon the parties hereto, in the
absence of manifest error. If the Administrative Agent is unable to determine
such a rate, the provisions of Section 5.3 shall apply. The Administrative Agent
shall, upon written request of Guarantor (on behalf of the Borrowers) or a Bank,
deliver to Guarantor (on behalf of the Borrowers) or such Bank a statement
showing the computations used by the Administrative Agent in determining any
applicable Offshore Rate hereunder.
SECTION 3.5 Fees. The Borrowers agree to pay (a) to Chase on behalf of each
Bank, a commitment fee, payable quarterly in arrears, on the average daily
undrawn amount of the undrawn Commitments, calculated at the rate per annum of
0.25% and (b) to Chase, the fees set forth in the Fee Letter dated September 13,
1999, between Guarantor and Chase.
SECTION 3.6 Computation of Interest and Fees. Interest on Offshore Rate
Loans shall be computed for the actual number of days elapsed on the basis of a
360-day year, and interest on Base Rate Loans shall be computed for the actual
number of days elapsed on the basis of a 365/366-day year. Each determination of
an interest rate by the Administrative Agent shall be conclusive and binding on
the Borrowers and the Banks in the absence of manifest error. Notwithstanding
anything contained herein to the contrary interest on the Loans shall not exceed
the maximum interest permitted by applicable law.
SECTION 4. PAYMENTS AND PREPAYMENTS
SECTION 4.1 Voluntary Termination or Reduction of Commitments. Each
Borrower may, upon not less than three (3) 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
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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 three (3) Business Day's irrevocable written
notice with respect to such Borrower's Loans to the Administrative Agent by
12:00 Noon (New York City time), ratably prepay such Loans in whole or in part,
in minimum amounts of $100,000 or any integral multiple of $100,000 in excess
thereof (unless such Borrower is prepaying the total amount of the Loans then
outstanding with respect to such Borrower). Such notice of prepayment shall
specify the date, the amount of such prepayment and the Types of Loans to be
prepaid. The Administrative Agent will promptly notify each Bank of its receipt
of any such notice, and of such Bank's Percentage of such prepayment. If such
notice is given by such Borrower, such Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 5.5. 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 setoff, recoupment or counterclaim.
Except as otherwise expressly provided herein, all payments by such Borrower
shall be made to the Administrative Agent for the account of the Banks at the
Administrative Agent's Office, and shall be made in Dollars and in immediately
available funds, no later than 1:30 P.M. (New York City time) on the date
specified herein. The Administrative Agent will promptly distribute to each Bank
its Percentage (or other applicable share as expressly provided herein) of such
payment in like funds as received. Any payment received by the Administrative
Agent later than 1:30 P.M. (New York City time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue.
(b) Subject to the provisions set forth in the definition of Interest
Period, whenever any payment is due on a day other than a Business Day, such
payment shall be made on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
(c) Unless the Administrative Agent receives notice from the applicable
Borrower prior to the date on which any payment is due to the Banks that such
Borrower will not make such payment in full as and when required, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent such Borrower has not made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent on demand such amount distributed to such Bank, together
with interest
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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 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
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addition to other rights and remedies (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 with respect to payments received
hereunder (such nonexcluded items being called "Charges"). In the event that any
withholding or deduction from any payment to be made by any Borrower hereunder
is required in respect of any Charges pursuant to any applicable law, rule or
regulation, then such Borrower will:
(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
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,
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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 Closing
Date, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or any
Lending Office of such Bank) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency,
(i) shall subject any Bank (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
(iii) shall impose on any Bank (other than a Defaulting Bank) (or its
Lending Office) any other condition affecting its Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D referred to above, to impose a cost on) such Bank (or any
Lending Office of such Bank) of making or maintaining Offshore Rate Loans to
reduce the amount of any sum received or receivable by such Bank (or the Lending
Office of such Bank) under this Agreement or under its Loans with respect
thereto, then within thirty (30) days after demand by such Bank (which demand
shall be accompanied by a statement setting forth in reasonable detail the basis
of such 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.
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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 such Borrowers of any event occurring after the
Closing Date, which will entitle such Bank to compensation pursuant to this
Section 5.2.
SECTION 5.3 Basis for Determining Interest Rate Inadequate or Unfair. If
with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Administrative Agent in the offshore dollar interbank market
for such Interest Period, or the Administrative Agent otherwise determines
(which determination shall be conclusive and binding on all parties) that
by reason of circumstances affecting the offshore dollar interbank market
adequate and reasonable means do not exist for ascertaining the applicable
Offshore Rate; or
(b) any Bank advises the Administrative Agent that the Offshore Rate as
determined by the Administrative Agent, will not adequately and fairly
reflect the cost to such Bank of maintaining or funding such Loan for such
Interest Period, or that the making or funding of Offshore Rate Loans has
become impracticable as a result of an event occurring after the Closing
Date which in the opinion of such Bank materially changes such Loans;
then, so long as such circumstances shall continue:
(i) the Administrative Agent shall promptly notify Guarantor (on behalf
of the Borrowers) and the Banks thereof,
(ii) no Bank shall be under any obligation to make or continue or
convert into Offshore Rate Loans so affected, and
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(iii) on the last day of the then current Interest Period for Offshore
Rate Loans so affected, such Offshore Rate Loans shall, unless then repaid
in full, automatically convert to Base Rate Loans.
Notwithstanding the foregoing, the Administrative Agent and each Bank shall take
any reasonable actions available to it (including designation of a different
Lending Office), consistent with legal and regulatory restrictions, that will
avoid the need to take the steps described in this Section 5.3, which will not,
in the reasonable judgment of the Administrative Agent or such Bank, be
disadvantageous to the Administrative Agent or such Bank.
SECTION 5.4 Changes in Law Rendering Certain Loans Unlawful. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for a Bank or the Lending Office
of such Bank ("Affected Bank") to make, maintain or fund Offshore Rate Loans,
then (a) the Affected Bank shall promptly notify each of the other parties
hereto, (b) the obligation of all Banks to make or continue or convert into
Offshore Rate Loans or make Offshore Rate Loans made unlawful for the Affected
Bank shall, upon the effectiveness of such event, be suspended for the duration
of such unlawfulness, and (c) on the last day of the current Interest Period for
Offshore Rate Loans (or, in any event, if the Affected Bank so requests, on such
earlier date as may be required by the relevant law, regulation or
interpretation), the Offshore Rate Loans shall, unless then repaid in full,
automatically convert to Base Rate Loans. Notwithstanding the foregoing, the
Administrative Agent and each Bank shall take any reasonable actions available
to it (including designation of a different Lending Office), consistent with
legal and regulatory restrictions, that will avoid the need to take the steps
described in this Section 5.4, which will not, in the reasonable judgment of the
Administrative Agent or such Bank, be disadvantageous to Administrative Agent or
such Bank.
SECTION 5.5 Funding Losses. Each Borrower hereby agrees that upon demand by
any Bank to the Administrative Agent (which demand shall be made within three
(3) Business Days after receipt of notice of any payment or proposed payment by
such Borrower under this Agreement giving rise to indemnification under this
Section 5.5 and shall be accompanied by a statement setting forth in reasonable
detail using the methodology set forth in Exhibit I) such Borrower will
indemnify such Bank against any loss or expense which such Bank may sustain or
incur (including, without limitation, any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such Bank
to fund or maintain Offshore Rate Loans), as reasonably determined by such Bank,
as a result of (a) any payment or prepayment or conversion of any Offshore Rate
Loans of such Bank on a date other than the last day of an Interest Period for
such Offshore Rate Loan, or (b) any failure of such Borrower to borrow on the
date of any Borrowing set forth in any Notice of Borrowing or (c) any failure of
such Borrower to convert or continue any portion of the Loans on a date
specified therefor in the Notice of Continuation/Conversion delivered pursuant
to this Agreement. For this purpose, all notices to the Administrative Agent
pursuant to this Agreement shall be deemed to be irrevocable.
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SECTION 5.6 Right of Banks to Fund Through Other Offices. Each Bank may, if
it so elects, fulfill its commitment as to any Offshore Rate Loans by causing
any of its Lending Offices to make such Offshore Rate Loans; provided, that in
such event for the purposes of this Agreement, such Loan shall be deemed to have
been made by such Bank and the obligation of the Borrower to repay such Offshore
Rate Loan shall nevertheless be to such Bank and shall be deemed held by it, to
the extent of such Offshore Rate Loan, for the account of such branch or
affiliate.
SECTION 5.7 Discretion of Banks as to Manner of Funding. Notwithstanding
any provision of this Agreement to the contrary, each Bank shall be entitled to
fund and maintain its funding of all or any part of its Loans in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Bank had actually funded
and maintained each Offshore Rate Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Offshore Rate, as the
case may be, for such Interest Period.
SECTION 5.8 Replacement of Banks. If any Bank shall become affected by any
of the changes or events described in Section 5.1, 5.2, 5.3(b), or 5.4 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, 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 bank (a "Replacement Bank") acceptable to the
Administrative Agent in its reasonable discretion, to which such Replaced Bank
shall, subject to its receipt (unless a later date for the remittance thereof
shall be agreed upon by the relevant Borrowers and the Replaced Bank) of all
amounts owed to such Replaced Bank under Section 5.1, 5.2, 5.3(b), or 5.4 above,
assign all (but not less than all) of its rights, obligations, Loans and
Commitment hereunder and execute an Assignment Agreement with such Replacement
Bank; provided, that all Liabilities (except Liabilities which by the terms
hereof survive the payment in full of the Loans and termination of this
Agreement) due and payable to the Replaced Bank shall be paid in full as of the
date of such assignment. Upon any assignment by any Bank pursuant to this
Section 5.8 becoming effective, the Replacement Bank shall thereupon be deemed
to be a "Bank" for all purposes of this Agreement and such Replaced Bank shall
thereupon cease to be a "Bank" for all purposes of this Agreement and shall have
no further rights or obligations hereunder (other than pursuant to Sections 5.1,
5.2, 5.5, 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 5.8, the Replaced Bank shall cease to be a "Bank" for all purposes of
this Agreement and the Replacement Bank substituted therefor upon payment to the
Replaced Bank by the Replacement Bank of all amounts set forth in this Section
5.8 without any further action of the Replaced Bank.
SECTION 5.9 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of the Administrative Agent or any Bank pursuant
to Sections 5.1, 5.2, 5.3, 5.4 and Section 5.5 shall be conclusive absent
demonstrable error. The provisions of Sections 5.1, 5.2, 5.5 and this Section
5.9 shall survive termination of this Agreement.
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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 Banks, a pledge agreement,
substantially in the form of Exhibit D (herein, as the same may be amended
or modified, called the "Pledge Agreement"), whereby each of the Borrowers
shall pledge all of the issued and outstanding common stock of Guarantor
owned by each Borrower and purchased with proceeds of the Loans.
(b) Guaranty. Guarantor shall execute and deliver to the Administrative
Agent the Guaranty, covering (i) the payment and performance of all of the
Liabilities and (ii) the other Obligations.
SECTION 6.2 Application of Proceeds from Collateral. As to each Borrower,
all proceeds received by the Administrative Agent from the sale or disposition
of any of the Direct Collateral furnished by such Borrower pursuant to this
Agreement or Indirect Collateral furnished by Guarantor pursuant to the Guaranty
shall be applied by the Administrative Agent in the following order after
receipt thereof:
First: to the payment of all of the reasonable costs and expenses of
the Administrative Agent in connection with (a) the administration, sale or
disposition of such Direct Collateral or Indirect Collateral, as the case
may be, and (b) the administration and enforcement of this Agreement and
the other Loan Documents, to the 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.
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 Direct Collateral, and (b) such Borrower shall
forthwith execute and deliver or cause to be executed and delivered to the
Administrative Agent, in due form for filing or recording (and pay the cost of
filing or recording the same in all public offices deemed necessary by the
Administrative Agent), such further assignment agreements, security agreements,
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pledge agreements, instruments, consents, waivers, financing statements, stock
or bond powers, searches, releases, and other documents, and do such other acts
and things, all as the Administrative Agent may from time to time reasonably
request to establish and maintain to the satisfaction of the Administrative
Agent a valid perfected Lien on all Direct Collateral (free of all other Liens)
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 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 when
delivered to the Administrative Agent upon the request of the Administrative
Agent, shall accurately present the financial condition of such Borrower at the
date of such financial statement.
SECTION 7.4 Material Adverse Change. No Material Adverse Change has
occurred since December 31, 1998 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.
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SECTION 7.6 Liens. None of the Direct 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 ("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 the best of such Borrower's knowledge, other
governmental investigation of the tax liability of such Borrower and there is no
unresolved claim by a taxing authority concerning such Borrower's tax liability,
for any period for which returns have been filed or were due.
SECTION 7.8 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 shares of common stock of Guarantor.
SECTION 7.10 Securities Laws. Neither such Borrower nor, to the best of
such Borrower's knowledge, any of its Affiliates, nor anyone acting on behalf of
any such Person, has directly or indirectly offered any interest in the Loans or
any other Liabilities for sale to, or solicited any offer to acquire any such
interest from, or has sold any such interest to, any Person 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
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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 any Borrower which is
an individual) (a) has the power to execute, deliver and perform this Agreement
and the other Loan Documents to which it is a party, and (b) has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement and the other Loan Documents to which it is a party.
SECTION 7.15 Margin Regulations. (a) None of the obligations of such
Borrower to Guarantor is or will be secured, directly or indirectly, by Margin
Stock;
(b) Neither Guarantor nor any third party acting on behalf of Guarantor has
taken or will take possession of such Borrower's Margin Stock to secure,
directly or indirectly, any of the obligations of such Borrower to Guarantor;
(c) Guarantor does not and will not have any right to prohibit such
Borrower from selling, pledging, encumbering or otherwise disposing of any
Margin Stock owned by such Borrower so long as the Guaranty is in effect or any
of the obligations of such Borrower or the obligations of Guarantor under the
this Agreement, the Guaranty or any of the Loan Documents remain outstanding;
(d) Such Borrower has not granted and will not grant Guarantor or any third
party acting on behalf of Guarantor the right to accelerate repayment of any of
the obligations under this Agreement of such Borrower if any of the Margin Stock
owned by such Borrower is sold by such Borrower or otherwise; and
(e) There is no agreement or other arrangement between such Borrower and
Guarantor or any third party acting on behalf of Guarantor (and no such
agreement or arrangement shall be entered into so long as this Agreement or
Guaranty is in effect or any of the Obligations of such Borrower or the
obligations of Guarantor under the Guaranty or any of the Loan Documents remain
outstanding) under which the Margin Stock of such Borrower would be made more
readily available as security to Guarantor than to other creditors of such
Borrower.
SECTION 7.16 No Default or Event of Default. No Default or Event of Default
(as such terms are defined in the Existing Credit Agreement) has occurred and
is continuing under the Existing Credit Agreement, and no Default or Event of
Default has occurred and is continuing hereunder.
SECTION 8. COVENANTS OF BORROWERS
Each Borrower agrees that, on and after the Closing Date until the
termination or expiration of the Commitments and for so long thereafter as any
of the Liabilities remain unpaid or outstanding
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(except Liabilities which by the terms hereof survive the payment in full of the
Loans and termination of this Agreement), such Borrower will:
SECTION 8.1 Reports, Certificates and Other Information. Unless otherwise
provided herein, furnish or cause to be furnished to the Administrative Agent
and each Bank:
8.1.1 Borrower Financials. Upon the request of the Administrative
Agent, a financial statement of such Borrower in a form acceptable to the
Required Banks;
8.1.2 Tax Returns and Reports. If requested by the Administrative Agent
or the Required Banks, copies of all federal, state, local and foreign Tax
Returns and Reports filed by such Borrower;
8.1.3 Notice of Default and Litigation. Promptly upon learning of the
occurrence of any of the following, written notice thereof, describing the
same and the steps being taken by such Borrower with respect thereto:
(a) the occurrence of a Default;
(b) the institution of any Material Litigation or the
occurrence of any Material Litigation Development as to such
Borrower;
(c) the commencement of any dispute which might reasonably be
expected to lead to the material modification, transfer,
revocation, suspension or termination of any Loan Document; or
(d) any Material Adverse Change as to such Borrower;
8.1.4 Collateral Ratio. Upon the request of the Administrative Agent or
the Required Banks, cause Guarantor (on behalf of the Borrowers) to provide
to the Administrative Agent, for the benefit of the Banks, a computation of
the Collateral Ratio certified by its chief financial officer or a vice
president with responsibility for or knowledge of financial matters of
Guarantor. Nothing contained in this Section 8.1.4 shall be deemed to limit
in any way whatsoever the Administrative Agent's right, on behalf of the
Banks, to calculate the Loan Value of Direct Collateral or the Loan Value
of Indirect Collateral or the Collateral Ratio at any time it deems
appropriate or necessary. If after making such calculation, the
Administrative Agent or the Required Banks determine that the amount of
such Collateral Ratio is different from the Collateral Ratio most recently
provided by Guarantor or the Administrative Agent, as the case may be, the
Administrative Agent shall deliver written notice of such amount to
Guarantor (on behalf of the Borrowers); provided that the Administrative
Agent's failure to deliver such notice shall not prejudice the rights of
the Administrative Agent and the Banks or the obligations of the Borrowers
under this Agreement or the other Loan Documents; and
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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.
SECTION 8.3 Compliance with Laws. Comply with all federal, state and local
laws, rules and regulations related to such Borrower, except where such failure
to comply could not reasonably be expected to have a Material Adverse Effect.
SECTION 8.4 Other Agreements. Not enter into any agreement containing any
provision which (a) would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by such Borrower hereunder or in connection herewith, (b) prohibits or
restricts the ability of such Borrower to amend or otherwise modify this
Agreement, any other Loan Document or any other document executed in connection
herewith or (c) constitutes an agreement to a limitation or restriction of the
type described in clauses (a) and (b) with respect to any other Indebtedness.
SECTION 9. CONDITIONS AND EFFECTIVENESS OF
THIS AGREEMENT
The obligation of the Banks to make the Loans and the effectiveness of this
Agreement is subject to the performance by the Borrowers and 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;
9.1.3 The Administrative Agent's receipt of all shares of common stock
of Guarantor owned by each Borrower which have been purchased with proceeds
of Loans or any of the
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foregoing relating thereto as required by the Pledge Agreement, together
with appropriate stock powers for such shares endorsed in blank and/or
other appropriate evidence of the perfection of the Administrative Agent's
Lien, including UCC financing statements and/or registrations or
acknowledgments of the Lien of the Administrative Agent on any applicable
brokerage account of each Borrower;
9.1.4 The Guaranty, together with the documents provided in Article V
of the Guaranty;
9.1.5 A favorable opinion of John J. Sabl, counsel of Guarantor,
substantially in the form of Exhibit F-1, and addressing such other legal
matters as the Administrative Agent may require;
9.1.6 A favorable opinion of Baker & Daniels, outside counsel to
Guarantor, substantially in the form of Exhibit F-2, and addressing such
other legal matters as the Administrative Agent may require;
9.1.7 Certified copies of each material consent, license and approval
(including, without limitation, any consent or approval required under the
Revolving Credit Agreement) 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;
9.1.8 A certificate of Guarantor certifying that since December 31,
1998, no event has occurred which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect as to the
Guarantor;
9.1.9 Schedules and Exhibits satisfactory to the Administrative Agent
and the Banks;
9.1.10 Evidence satisfactory to the Administrative Agent of compliance
by each Borrower and Guarantor with Regulation U in connection with the
financing transactions contemplated hereby;
9.1.11 Evidence of each filing, registration or recordation (and
payment of any necessary fee, Tax or expense relating thereto) with respect
to each document (including, without limitation, any UCC financing
statement) required by the Loan Documents or under law or requested by the
Administrative Agent to be filed, registered or recorded in order to
create, in favor of the Administrative Agent, for the benefit of the Banks
a valid perfected Lien on all Direct Collateral (free of all other Liens)
(other than UCC financing statements to be filed in connection with the
Loan Documents which will be delivered for filing on the Closing Date);
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9.1.12 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
9.1.13 Certified copies of any indemnification or similar agreements or
arrangements between any Borrower and Guarantor relating to the
reimbursement by such Borrower of any payments made by 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), as the same may have been amended or modified.
9.1.14 A Federal Reserve Form U-1 for the benefit of the Banks, duly
executed by each Borrower and the Guarantor, the statements made in which
shall be such, in the opinion of the Administrative Agent, as to permit the
transactions contemplated by this Agreement in accordance with Regulation
U.
9.1.15 Such other information and documents including direction
letters, powers of attorney, and Borrower authorizations to the
Administrative Agent to supplement Form U-1 statements in connection with
subsequent Loans as may reasonably be required by the Administrative Agent
and the Administrative Agent's counsel.
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 Guarantor 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;
9.2.5 No Material Adverse Change has occurred with respect to the
Guarantor or any Borrower since the date of the most recent respective
financial statements of the Guarantor and each such Borrower delivered to
the Banks pursuant to this Agreement or the Guaranty, respectively;
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9.2.6 The Collateral Ratio for such Borrower, after giving effect to
such Loan, is at least 2.0 to 1.0.
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 NonPayment of Loans, etc.
(a) Default by such Borrower in the payment or prepayment when
due of any principal on the Loans made to such Borrower, or
(b) Default by such Borrower in the payment within five (5) days
of when due of any interest on the Loans made to such Borrower or any
other amount owing by such Borrower pursuant to this Agreement.
10.1.2 Bankruptcy, Insolvency, etc. Such Borrower, 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, 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, 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,
Guarantor or such Significant Subsidiary or for a substantial part of the
property of such Borrower, 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, Guarantor
or such Significant Subsidiary and if such case or proceeding is not
commenced by such Borrower, Guarantor or such Significant Subsidiary, it is
consented to or acquiesced in by such Borrower, Guarantor or such
Significant Subsidiary or remains for sixty (60) days undismissed.
10.1.3 Defaults Under this Agreement. Failure by such Borrower or
Guarantor (or any of its Subsidiaries) to comply with or perform any of the
covenants or agreements of such Borrower, Guarantor or any of its
Subsidiaries set forth in this Agreement or the other Loan Documents
applicable to such Borrower, 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
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with respect to Guarantor, in each case after notice thereof to such
Borrower or 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 Guarantor 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 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 Collateral Ratio. The Collateral Ratio for such Borrower is less
than 1.5 to 1.0.
10.1.6 Defaults under Revolving Credit Agreement. An event of default
shall have occurred and be continuing under the Revolving Credit Agreement.
If the Revolving Credit Agreement is terminated (and not replaced, restated
or substituted as permitted pursuant to the definition of "Revolving Credit
Agreement" in Section 1.1), the occurrence of any event or the existence of
any circumstance which would have, had it occurred or existed prior to such
termination, constituted an event of default, shall constitute an Event of
Default hereunder.
10.1.7 Defaults Under Existing Credit Agreement. An event of default
shall have occurred and be continuing under the Existing Credit Agreement.
10.1.8 Default Under Other Indebtedness. The Guarantor or any
Significant Subsidiary defaults in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness of Guarantor or any Significant Subsidiary (other than
Indebtedness in respect of the Guaranty) in an amount in excess of
$75,000,000.
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 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 Guarantor, any 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 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
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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. Under
no circumstances shall the Administrative Agent have any fiduciary duties to any
Bank or be required to take any action which exposes the Administrative Agent to
personal liability or which is contrary to this Agreement or to the other Loan
Documents or applicable law.
SECTION 11.2 Liability of the Administrative Agent. None of the
Administrative Agent or any Agent-Related Person shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement and the other Loan Documents, except for its own gross negligence or
willful misconduct. Without limiting the generality of the foregoing, the
Administrative Agent: (a) may treat a Bank as such until the Administrative
Agent receives an executed Assignment Agreement entered into between a Bank and
an Eligible Assignee pursuant to Section 12.1 hereof; (b) may consult with legal
counsel (including counsel for any Borrower), independent public accountants and
other experts or consultants selected by it; (c) shall not be liable for any
action taken or omitted to be taken in good faith by the Administrative Agent in
accordance with the advice of counsel, accountants, consultants or experts; (d)
shall make no warranty or representation to any Bank and shall not be
responsible to any Bank for any recitals, statements, warranties or
representations, whether written or oral, made in or in connection with this
Agreement or the other Loan Documents; (e) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms,
obligations, covenants or conditions of this Agreement on the part of any
Borrower or to inspect the property (including, without limitation, any books
and records) of any Borrower; (f) shall not be responsible to any Bank for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document or other support or security
(including the validity, priority or perfection of any Lien), or any other
document furnished in connection with any of the foregoing; and (g) shall incur
no liability under or in respect of this Agreement or any other Loan Document by
action upon any written notice, statement, certificate, order, telephone
message, facsimile
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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, Chase shall have the same rights and powers under this Agreement and
the other Loan Documents as any other Bank and may exercise the same as though
it were not the Administrative Agent; and the term "Bank" or "Banks" shall,
unless otherwise expressly indicated, include Chase in its individual capacity.
Chase and its Affiliates may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with, any
Borrower, Guarantor and any of its Subsidiaries and any Person who may do
business with or own securities of Guarantor or any such Subsidiary, all as if
Chase was not the Administrative Agent and without any duty to account therefor
to the Banks.
SECTION 11.4 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank and based on the financial statements referred to in Section 7.3 hereof and
Section 3.7 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 and each Agent-Related Person (to the extent not reimbursed
by the Borrower), ratably according to their Percentages, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or assessed against the
Administrative Agent in any way relating to or arising out of this Agreement 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 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
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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. 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 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, if any. Any such assignment shall be
pursuant to an assignment agreement, substantially in the form of Exhibit H (an
"Assignment Agreement"), duly executed by such Bank and the Eligible Assignee,
and acknowledged by the Administrative Agent. Notwithstanding the foregoing,
each Bank may make assignments to its Affiliates or to any Federal Reserve Bank
without obtaining consent of the Administrative Agent.
(b) Each assignment shall be pro rata with respect to all rights and
obligations of the assigning Bank including the 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 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:
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<PAGE>
(i) the Assignment Agreement shall have been executed by the assigning
Bank and the Eligible Assignee,
(ii) the Assignment Agreement shall have been acknowledged by the
Administrative Agent,
(iii) either the assigning Bank or the Eligible Assignee shall have
paid a processing fee of $3,000 to the Administrative Agent for its own
account; provided that the Eligible Assignee shall be solely responsible
for such processing fee with respect to any assignment pursuant to Sections
5.8 and 13.2, and
(iv) the assigning Bank and the Administrative Agent shall have agreed
upon a date upon which such assignment shall become effective. Upon such
assignment becoming effective, the Administrative Agent shall forward all
payments of interest, principal, fees and other amounts that would have
been made to the assigning Bank, in proportion to the percentage of the
assigning Bank's rights transferred, to the Eligible Assignee.
(d) Upon the effectiveness of any assignment, the assigning Bank shall
be relieved from its obligations hereunder to the extent of the obligations so
assigned (except to the extent, if any, that any Borrower, any other Bank or the
Administrative Agent have rights against such assigning Bank as a result of any
default by such Bank under this Agreement). Promptly following the effectiveness
of each assignment, the Administrative Agent shall furnish to the Borrowers and
each Bank a revised Schedule 2.1, revised to reflect such assignment.
SECTION 12.2 Participations. (a) Each Bank may grant participations in all
or any part of its Loans, 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 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.
39
<PAGE>
(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 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, Guarantor and
its Subsidiaries which has been delivered to such Bank by such Borrower and/or
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/or 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 G in which it
agrees that it shall hold all non-public, confidential and proprietary
information obtained pursuant to the requirements of this Agreement in
accordance with safe and sound banking and business practices and may make
disclosure reasonably required by any bona fide participant, assignee or
Eligible Assignee (or potential participant, assignee or Eligible Assignee) in
connection with the contemplated transfer of any portion of the Loans or as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process. For the purposes of this Section 12.3, by execution
of this Agreement each of the Banks shall be deemed to have agreed to and
executed the confidentiality agreement contained in Exhibit G.
SECTION 12.4 Foreign Transferees. If, pursuant to this Section 12, any
interest in this Agreement or any Loans or the Note is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any state thereof or upon the request of the Administrative
Agent, the transferor Bank shall cause such Transferee (other than any
participant), and may cause any participant, concurrently with the effectiveness
of such transfer,
40
<PAGE>
(a) to represent to the transferor Bank (for the benefit of the
transferor Bank, the Administrative Agent and the Borrowers) that under
applicable law and treaties no Taxes will be required to be withheld by the
Administrative Agent,
(b) to represent to the Borrowers or the transferor Bank that under
applicable law and treaties no Taxes will be required to be withheld with
respect to any payments to be made to such Transferee in respect of the
Loans or, if applicable, the Notes,
(c) to furnish to the transferor Bank, the Administrative Agent and the
Borrowers either U.S. Internal Revenue Service Form 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;
(c) which would permit the release of all or any material portion of
the Direct Collateral or Indirect Collateral or the release or termination
of Guarantor's obligations in the aggregate, or any material obligation
individually, under the Guaranty, shall be effective without the consent of
each Bank;
41
<PAGE>
(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 directly affected thereby; 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 "Non-Consenting Bank") then in such case, Guarantor
(on behalf of the Borrowers) may, upon at least five (5) Business Days' written
notice to the Administrative Agent and such Non-Consenting Bank, designate a
substitute lender (a "Substitute Bank") acceptable to the Administrative Agent
in its sole discretion, to which such Non-Consenting Bank shall assign all (but
not less than all) of its rights and obligations under the Loans 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, 5.5,
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 Non-Consenting Bank
shall be paid in full as of the date of such assignment. Notwithstanding the
foregoing, in the event that in connection with any amendment, modification or
waiver more than one Bank is a Non-Consenting Bank, the Borrowers may not
require one Bank to assign its rights and obligations to a Substitute Bank
unless all Non-Consenting Banks are required to make such an assignment.
Notwithstanding any Non-Consenting Bank's failure or refusal to assign its
rights, obligations, Loans and Commitment under this Section 13.2, the
Non-Consenting Bank shall cease to be a "Bank" for all purposes of this
Agreement and the Substitute Bank substituted therefor upon payment to the
Non-Consenting Bank by the Substitute Bank of all amounts set forth in this
Section 13.2 without any further action of the Non-Consenting Bank.
SECTION 13.3 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile or
similar writing) and shall be given to such party at its address, facsimile or
telex number set forth on the signature or 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
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
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<PAGE>
to the Administrative Agent under Sections 2, 3, 4 and 10 shall not be effective
until received by the Administrative Agent.
SECTION 13.4 Indemnity. The Borrowers agree, jointly and severally, to
indemnify each Bank, its Affiliates and each of their respective directors,
officers, employees, persons controlling or controlled by any of them or their
respective agents, consultants, attorneys and advisors (the "Indemnified
Parties") and hold each Indemnified Party harmless from and against any and all
liabilities, losses, claims, damages, costs and expenses of any kind to which
any of the Indemnified Parties may become subject, whether directly or
indirectly (including, without limitation, the reasonable fees and disbursements
of counsel for any Indemnified Party), relating to or arising out of this
Agreement, the other Loan Documents, 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 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.
SECTION 13.7 GOVERNING LAW. THIS AGREEMENT, THE NOTES, IF ANY, AND THE
LOANS SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK. ALL OBLIGATIONS OF THE BORROWERS AND GUARANTOR AND RIGHTS OF THE
ADMINISTRATIVE AGENT AND THE BANKS IN RESPECT OF THE 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 Closing
Date hereof, and at such time the Administrative Agent shall notify the
Borrowers and each Bank.
43
<PAGE>
SECTION 13.9 SUBMISSION TO JURISDICTION; WAIVER OF VENUE. THE
ADMINISTRATIVE AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY SUBMIT TO
THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, AND THE ADMINISTRATIVE
AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. THE ADMINISTRATIVE
AGENT, EACH BANK AND EACH BORROWER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION IT OR THEY MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE IN ANY ACTION OR PROCEEDING (WHETHER BROUGHT BY ANY
BORROWER, THE ADMINISTRATIVE AGENT, ANY BANK, OR OTHERWISE) IN ANY COURT
HEREINABOVE SPECIFIED IN THIS SECTION 13.9 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 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;
44
<PAGE>
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS
AGREEMENT.
* * *
45
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by themselves or their respective authorized officers as of the
day and year first above written.
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Bank
By: /s/Helen L. Newcomb
------------------------------
Name: Helen L. Newcomb
Title: Vice President
<PAGE>
BORROWERS:
THOMAS C. HILBERT IRREVOCABLE TRUST, II
(By: Stephen C. Hilbert, as Trustee)
/s/ Stephen C. Hilbert
----------------------------------------
Name: Stephen C. Hilbert
<PAGE>
MARYJOSC, LP
(By: Rollin M. Dick, General Partner)
/s/ Rollin M. Dick
----------------------------------------
Name: Rollin M. Dick
<PAGE>
NGAIRE E. CUNEO
/s/ Ngaire E. Cuneo
----------------------------------------
Name: Ngaire E. Cuneo
<PAGE>
JOHN J. SABL
/s/ John J. Sabl
----------------------------------------
Name: John J. Sabl
<PAGE>
THOMAS J. KILIAN
/s/ Thomas J. Kilian
----------------------------------------
Name: Thomas J. Kilian
<PAGE>
JAMES S. ADAMS
/s/ James S. Adams
----------------------------------------
Name: James S. Adams
<PAGE>
MAXWELL B. BUBLITZ
/s/ Maxwell B. Bublitz
----------------------------------------
Name: Maxwell B. Bublitz
<PAGE>
BRUCE A. CRITTENDEN
/s/ Bruce A. Crittenden
----------------------------------------
Name: Bruce A. Crittenden
<PAGE>
DENNIS E. MURRAY, SR.
/s/ Dennis E. Murray, Sr.
----------------------------------------
Name: Dennis E. Murray, Sr.
<PAGE>
DPM, LTD
(By: Dennis E. Murray, Sr. and
Margaret A. Murray, General Partners
/s/ Dennis E. Murray, Sr.
----------------------------------------
Name: Dennis E. Murray, Sr.
/s/ Margaret A. Murray
----------------------------------------
Name: Margaret A. Murray
<PAGE>
DAVID R. DECATUR
/S/ David R. Decatur
----------------------------------------
Name: David R. Decatur
<PAGE>
JAMES D. MASSEY
/S/ JAMES D. MASSEY
----------------------------------------
Name: James D. Massey
<PAGE>
LAWRENCE M. COSS
/S/ Lawrence M. Coss
----------------------------------------
Name: Lawrence M. Coss
<PAGE>
JOHN M. MUTZ
/S/ John M. Mutz
----------------------------------------
Name: John M. Mutz
<PAGE>
M. PHIL HATHAWAY
/S/ M. Phil Hathaway
----------------------------------------
Name: M. Phil Hathaway
<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
-----------------------------
CONSECO, INC. hereby acknowledges and agrees to make such deliveries as are
required by it and comply with the covenants and other provisions applicable to
it contained in this Agreement.
CONSECO, INC.
By: /S/Rollin M. Dick
----------------------------------------
Name: Rollin M. Dick
Title: Executive Vice President
and Chief Financial Officer
Notice Address:
11825 N. Pennsylvania Street
Carmel, IN 46032
Attention: John J. Sabl
Telephone: (317) 817-6163
Facsimile: (317) 817-6327
================================================================================
GUARANTY
Dated as of September 15, 1999
between
CONSECO, INC.,
as Guarantor,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
================================================================================
<PAGE>
EXHIBITS
EXHIBIT A-1 Form of Opinion of John J. Sabl, counsel to Guarantor
EXHIBIT A-2 Form of Opinion of Baker & Daniels, outside counsel to Guarantor
EXHIBIT B Form of Officer's Certificate
EXHIBIT C Form of Conseco Corporate Structure
<PAGE>
GUARANTY
THIS GUARANTY (this "Guaranty") is entered into as of September 15,
1999 by CONSECO, INC., an Indiana corporation ("Guarantor"), in favor of THE
CHASE MANHATTAN BANK, as administrative agent (the "Administrative Agent") for
the financial institutions (the "Banks" and together with Administrative Agent,
collectively, the "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 hereof.
WITNESSETH:
WHEREAS, Guarantor has established a stock purchase program for certain
of its officers and directors to increase Guarantor's ability to attract and
retain able executive and senior officers and directors and, accordingly,
promote the interest of Guarantor and its stockholders, while at the same time
providing these individuals with additional incentive to work toward Guarantor's
future success;
WHEREAS, Guarantor has determined it to be in the best interest of
Guarantor and its stockholders to expand the stock purchase program to permit
the purchase of shares of common stock of Guarantor;
WHEREAS, concurrently with Guarantor's execution and delivery of this
Guaranty, certain other individuals (herein, collectively called, the
"Borrowers" and each individually, a "Borrower") will enter into that certain
Credit Agreement, dated as of September 15, 1999 (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 Borrowers,
the Banks and the Administrative Agent, whereby the Banks, among other things,
have agreed to make term loans to the Borrowers in an aggregate principal amount
of $150,000,000 on the terms and subject to the conditions contained in the
Credit Agreement;
WHEREAS, as a condition precedent to the Banks executing and delivering
the Credit Agreement and making the initial Loans thereunder, Guarantor is
required to execute and deliver this Guaranty;
WHEREAS, Guarantor has been duly authorized to execute, deliver and
perform this Guaranty; and
WHEREAS, it is in the best interest of Guarantor to execute this
Guaranty inasmuch as Guarantor has and 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;
<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 respective meanings assigned thereto in
the Credit Agreement; provided that such definitions shall survive any
termination of the Credit Agreement. In addition, when used herein the following
terms shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" - see Preamble.
"Banks" or "Bank" - see Preamble.
"Borrowers" or "Borrower" - see third recital.
"Borrower Default" - see Section 6.1.
"Cash Collateral Account" shall mean the custody account, account
number 910-2-572212, 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
Guarantor pursuant to Section 6.1.
"Credit Agreement" - see third recital.
"Guarantied Party" - see Preamble.
"Guaranty" - see Preamble.
"Indemnified Liabilities" - see Section 6.2.
"Indemnified Parties" - see Section 7.2.
"Obligations" - see Section 2.1.
"Permitted Liens" - see Section 4.4.
2
<PAGE>
"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, except as set forth in Article VI, 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 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
3
<PAGE>
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(s) 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:
(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;
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(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 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
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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 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 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.
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
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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. Guarantor (a) has the power to execute,
deliver and perform this Guaranty and the other Loan Documents to which it is a
party, and (b) has taken all necessary action to authorize the execution,
delivery and performance by it of this Guaranty and the other Loan Documents to
which it is a party.
SECTION 3.3. No Conflict. The execution, delivery and performance by
Guarantor of this Guaranty and the other Loan Documents to which it is a party
does not and will not (a) contravene or conflict with any provision of any law,
statute, rule or regulation, (b) contravene or conflict with, result in any
breach of, or constitute a default under, any material agreement or instrument
binding on Guarantor or any of its Subsidiaries (including, without limitation,
any writ, judgment, injunction or other similar court order), (c) result in the
creation or imposition of or the obligation to create or impose any Lien (except
for Permitted Liens) upon any of the property or assets of Guarantor or any of
its Subsidiaries or (d) contravene or conflict with any provision of the
articles of incorporation or bylaws of Guarantor.
SECTION 3.4. Margin Regulations.
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(a) None of the transactions contemplated hereunder or in connection
herewith will in any way violate, contravene or conflict with any of the
provisions of Regulation U;
(b) None of the obligations of any Borrower to Guarantor is or will be
directly or indirectly secured by "margin stock" (as defined in Regulation U);
(c) Neither Guarantor nor any third party acting on behalf of Guarantor
has taken or will take possession of any Borrower's "margin stock" to secure,
directly or indirectly, any of the Obligations of such Borrower or the
obligations of Guarantor under this Guaranty or any of the Loan Documents;
(d) Guarantor does not and will not have any right to prohibit any
Borrower from selling, pledging, encumbering or otherwise disposing of any
margin stock owned by such Borrower so long as this Guaranty is in effect or any
of the Obligations of such Borrower or the obligations of Guarantor under this
Guaranty or any of the Loan Documents remain outstanding;
(e) None of the Borrowers have granted or will grant Guarantor or any
third party acting on behalf of Guarantor the right to accelerate repayment of
any of the Obligations of such Borrower if any of the margin stock owned by such
Borrower is sold by such Borrower or otherwise; and
(f) There is no agreement or other arrangement between any Borrower and
Guarantor or any third party acting on behalf of Guarantor (and no such
agreement or arrangement shall be entered into so long as this Guaranty is in
effect or any of the Obligations of such Borrower or the obligations of
Guarantor under this Guaranty or any of the Loan Documents remain outstanding)
under which the margin stock of such Borrower would be made more readily
available as security to Guarantor than to other creditors of such Borrower.
SECTION 3.5. Conseco Corporate Structure. The corporate structure of
Guarantor and its Subsidiaries as of the date hereof is as set forth on Exhibit
C.
SECTION 3.6. No Default or Event of Default. No Default or Event of
Default has occurred and is continuing with respect to Guarantor and no default
or event of default has occurred and is continuing under the Revolving Credit
Agreement.
SECTION 3.7. Incorporation by Reference.. Guarantor agrees that the
representations and warranties of Guarantor set forth in Section 5 of the
Revolving Credit Agreement 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"
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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.
Notwithstanding the foregoing, if Section 5 of the Revolving Credit
Agreement (or any successor section thereto) or any definitions set forth or
used therein are amended or modified in accordance with the terms of the
Revolving Credit Agreement either as the result of an amendment or modification
to such section in the Revolving Credit Agreement or Guarantor's execution and
delivery of a new credit facility in replacement, restatement or substitution
for the Revolving Credit Agreement, this Section 3.7 shall be deemed to be
amended and modified to the extent set forth in the Revolving Credit Agreement
(as amended or modified) or any new credit facility entered into in replacement,
restatement or substitution for the Revolving Credit Agreement; provided, that
each of the Banks has received at least 10 days prior written notice of any such
amendment, modification, replacement, restatement or substitution and the
Required Banks (either directly or through the Administrative Agent) have not
prior to the end of such 10 day period given notice to Guarantor that such
amendment, modification, replacement, restatement or substitution is not
acceptable.
ARTICLE IV.
COVENANTS
SECTION 4.1. Guarantor agrees that, on and after the date hereof 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), Guarantor will comply
with the covenants set forth Sections 6 and 7 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 6 and 7 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.
Notwithstanding the foregoing, if Sections 6 or 7 of the Revolving
Credit Agreement (or any successor section thereto) or any definitions set forth
or used therein are amended or modified in accordance with the terms of the
Revolving Credit Agreement either as the result of an amendment or modification
to such section in the Revolving Credit Agreement or Guarantor's execution and
delivery of a new credit facility in replacement, restatement or substitution
for the Revolving Credit Agreement, this Section 4.1 shall be deemed to be
amended and modified to the extent set forth in the Revolving Credit Agreement
(as amended or modified) or any new credit facility entered into in replacement,
restatement or substitution for the Revolving
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Credit Agreement; provided, that each of the Banks has received at least 10 days
prior written notice of any such amendment, modification, replacement,
restatement or substitution and the Required Banks (either directly or through
the Administrative Agent) have not prior to the end of such 10 day period given
notice to Guarantor that such amendment, modification, replacement, restatement
or substitution is not acceptable.
SECTION 4.2. Certain Indebtedness. Guarantor shall not, and shall not
permit any of its Subsidiaries to amend or modify any provision of the Revolving
Credit Agreement or the other Revolving Credit Loan Documents if such amendment
or modification could reasonably be expected to have a material adverse effect
on the Banks, Guarantor or any material provision of the Loan Documents.
SECTION 4.3. Margin Regulations. Guarantor shall take such actions and
execute and deliver such instruments or documents from time to time as the
Administrative Agent shall reasonably request to maintain continuous compliance
with Regulation U.
SECTION 4.4. [Reserved]
SECTION 4.5. Limitation on Additional Purpose Credit/Sale of Assets.
Notwithstanding any other provision of this Guaranty, the Credit Agreement or
the Revolving Credit Agreement to the contrary, Guarantor will not, and will not
permit any of its Wholly-Owned Subsidiaries and/or Significant Subsidiaries to
(a) incur or assume any Indebtedness which constitutes "purpose credit" secured
"directly or indirectly" as defined in Regulation U by Margin Stock or (b) sell,
transfer or otherwise dispose of any of its assets (other than as permitted in
Section 7.03 of the Revolving Credit Agreement) unless in the case of both
clauses (a) and (b) the Administrative Agent shall have been given at least 10
days' prior written notice thereof and either:
(x) in the case of a disposition of assets, either (i) if permitted by
the Revolving Credit Agreement, an amount equal to the Net Proceeds (as
defined in the Revolving Credit Agreement) received by Guarantor, such
Wholly-Owned Subsidiary and/or such Significant Subsidiary, as the case may
be, in connection with any such disposition of assets shall be promptly
applied to repay, pro rata, the principal amount of the Loans made to the
Borrowers (together with any interest accrued thereon); provided that to
the extent the Net Proceeds of any such disposition exceed the amount of
the Loans, or the Loans shall have been paid in full, such Net Proceeds
shall be applied to repay any remaining Liabilities or (ii) the Borrowers
shall prepay their respective Liabilities hereunder in an amount equal to
the product of (A) the Net Proceeds received by Guarantor, such
Wholly-Owned Subsidiary and/or such Significant Subsidiary, as the case may
be, in connection with such disposition of assets, multiplied by a
fraction, the numerator of which is the Liabilities of such Borrower and
the denominator of which is the aggregate of all Liabilities of all the
Borrowers; or
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(y) (i) no Default or Event of Default exists under the Credit
Agreement or this Guaranty or shall result therefrom;
(ii) the Required Banks have determined, in their sole and absolute
discretion, that such proposed incurrence of Indebtedness or proposed
disposition of assets, as the case may be, will not in any way violate,
contravene or conflict with Regulation U (and the Administrative Agent
shall have received such information from the Guarantor as may be requested
by the Administrative Agent to make such determination, including a
calculation of the "good faith loan value" of the assets comprising the
Indirect Collateral remaining after giving effect to such incurrence of
Indebtedness and/or disposition of assets);
(iii) if requested by the Administrative Agent, the Banks shall
have received (A) a certificate of the chief financial officer or a vice
president with responsibility for or knowledge of financial matters of the
Guarantor setting forth a calculation of the Collateral Ratio (which
calculation shall reflect any adjustment in the "good faith loan value" of
the Indirect Collateral as determined by the Required Lenders pursuant to
clause (ii) above) and/or (B) an opinion of counsel satisfactory to the
Administrative Agent and its counsel to the effect that such proposed
incurrence of Indebtedness or disposition of assets, as the case may be,
will not in way violate, contravene or conflict with Regulation U
addressing such other legal matters as reasonably requested by the
Administrative Agent; and
(iv) after giving effect to the incurrence of such Indebtedness
and/or the disposition of such assets, the Collateral Ratio shall be at
least 2 to 1.
SECTION 4.6. Compliance with Credit Agreement; Provision of Collateral
Ratio Information. Guarantor acknowledges that it is the attorney-in-fact of
each of the Borrowers and further acknowledges that it has certain obligations
and responsibilities to the Banks under the Credit Agreement (including, without
limitation, under Section 8.1.4 of the Credit Agreement). Guarantor hereby
agrees to comply with and satisfy such obligations and responsibilities under
the Credit Agreement. Furthermore, Guarantor shall provide to the Administrative
Agent and the Banks such information as may be reasonably requested from time to
time by the Administrative Agent or the Required Banks to permit the
Administrative Agent or the Required Banks, as the case may be, to determine the
"maximum good faith loan value" (as defined in Regulation U) of the Indirect
Collateral and do such other acts and execute such other documentation to
continue to comply with Regulation U.
ARTICLE V.
CONDITIONS AND EFFECTIVENESS OF THIS AGREEMENT
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The obligation of the Banks to make the Loans is (in addition to the
conditions precedent set forth in Section 9 of the Credit Agreement) subject to
the performance by Guarantor of all of the obligations under this Guaranty and
to the satisfaction of the following conditions precedent:
SECTION 5.1. Initial Loans. Prior to or concurrent with the making of the
initial Loans under the Credit Agreement, the Administrative Agent shall have
received all of the following, each, except to the extent otherwise specified
below, duly executed 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:
5.1.1. A favorable opinion of John J. Sabl, counsel of Guarantor and
its Subsidiaries, substantially in the form of Exhibit A-1, and addressing
such other legal matters as the Administrative Agent may require;
5.1.2. A favorable opinion of Baker & Daniels, outside counsel to
Guarantor and its Subsidiaries, substantially in the form of Exhibit A-2,
and addressing such other legal matters as the Administrative Agent may
require;
5.1.3. An officer's certificate of Guarantor, substantially in the form
of Exhibit C, and dated as of the Closing Date, signed by a Responsible
Officer of Guarantor, and attested to by the secretary thereof, together
with certified copies of Guarantor's articles of incorporation, bylaws and
directors resolutions;
5.1.4. Evidence of the good standing or certificates of compliance of
Guarantor in the jurisdiction in which Guarantor was incorporated as of the
Closing Date;
5.1.5. Evidence that Guarantor paid to the Administrative Agent the
fees and expenses provided for herein;
5.1.6. Evidence satisfactory to the Administrative Agent of compliance
by Guarantor with Regulation U; and
5.1.7. Such other information and documents as may reasonably be
required by the Administrative Agent and the Administrative Agent's
counsel.
ARTICLE VI.
SALE AND RELEASE OF PLEDGED SHARES; CASH COLLATERAL
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SECTION 6.1. Sale of Pledged Shares. Notwithstanding any provision set
forth in any of the Loan Documents to the contrary (other than Section 6.6), 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 6.2, 6.4 and 6.6
below, it will not demand that Guarantor pay the Obligations of such Borrower
(constituting outstanding principal and interest of such Borrower), until after
the Administrative Agent has used 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 6.2. Conditions to Sale of Pledged Shares. The obligation of
the Administrative Agent not to demand payment hereunder pursuant to Section 6.1
is subject to the following conditions:
(a) 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 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, Guarantor
shall continue 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 of Guarantor on the New York Stock
Exchange or any other exchange upon which the common stock of Guarantor may then
be traded;
(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
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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
Section 6.1.
(c) 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 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 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 Guarantor for any
discount allowed by reason of the fact that such Pledged Shares are sold in
compliance with any such limitation or restriction.
(d) Guarantor further agrees to indemnify and hold harmless the
Administrative Agent and the Banks and each of their respective officers,
directors, employees, agents, successors and assigns, and any Person in control
of any thereof, from and against any loss, liability, claim, damage and expense,
including, without limitation, reasonable attorneys' fees actually incurred (in
this paragraph collectively called the "Indemnified Liabilities"), under federal
and state securities laws or otherwise resulting from the action or failure to
act by Guarantor or any Borrower; provided, that no such Person shall have the
right to be indemnified hereunder for its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
SECTION 6.3. Release of Pledged Shares. The Administrative Agent agrees
that, so long as Guarantor is in compliance with Section 6.2(a) and none of the
events set forth in Section 6.2(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 Guarantor
hereunder with respect to such Borrower. Notwithstanding the foregoing, the
Administrative Agent shall be entitled to (i) release the Pledged Shares of such
Borrower if such Pledged Shares are replaced by additional common stock of
Guarantor and (ii) sell the Pledged Shares pursuant to Section 6.1.
SECTION 6.4. Borrower Event of Default. Guarantor hereby acknowledges
and agrees that Sections 6.1 and 6.3 shall not apply to any Default or Event of
Default relating to Guarantor or any of its Subsidiaries and, upon the
occurrence of an Event of Default relating to Guarantor or any of its
Subsidiaries, the Administrative Agent expressly reserves its rights and
remedies under this Guaranty to demand payment hereunder to satisfy the
Obligations of all Borrowers and the obligations of Guarantor hereunder whether
or not the Administrative Agent has sold or attempted to sell the Pledged Shares
of any Borrower or otherwise exercised its rights and remedies under the
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Pledge Agreement or any other Loan Document. Furthermore nothing contained
herein shall be deemed to prohibit or limit in any way whatsoever the
Administrative Agent's or any Bank's right or ability to receive its portion of
the assets of Guarantor upon the exercise by the Revolving Credit Agent or the
Revolving Credit Banks of their rights and remedies under the Revolving Credit
Loan Documents or any other creditor of Guarantor.
SECTION 6.5. Application of Cash Collateral. If after compliance by the
Administrative Agent with the provisions set forth in Section 6.1 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 Guarantor (a) if the Pledged Shares of such Borrower are sold
pursuant to Section 6.1, 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 6.1, 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
Guarantor. The Administrative Agent agrees that it shall deliver to 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.
SECTION 6.6. No Requirement to Comply with Section 6.1 in Certain
Circumstances. Notwithstanding the provisions of Section 6.1, the Administrative
Agent shall not be required to attempt to sell the Pledged Shares of any
Borrower in the manner contemplated by Section 6.1 prior to demanding payment
from the Guarantor in respect of such Borrower's Obligations if (a) the
Administrative Agent would not be legally permitted to do so by reason of
restrictions imposed by the United States Bankruptcy Code, (b) the
Administrative Agent would be required to comply with any restrictions on the
immediate sale of such Pledged Shares imposed by federal securities laws or
regulations or (c) in respect of the Loans of any Borrower, if the
Administrative Agent shall not have received (i) counterparts, duly executed by
such Borrower, of all documents contemplated by the Credit Agreement to be
executed by such Borrower or (ii) a duly perfected first priority security
interest in all shares of common stock of the Guarantor purchased by such
Borrower with proceeds of such Loans.
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1. 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:
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(i) the negotiation, preparation, execution, syndication and
delivery of the Credit Agreement, this Guaranty and the other Loan Documents,
including schedules and exhibits, and any amendments, waivers, consents,
supplements or other modifications to the Credit Agreement, this Guaranty or the
other Loan Documents as may from time to time hereafter be required, whether or
not the transactions contemplated hereby or thereby are consummated; and
(ii) the preparation and/or review of the form of any document or
instrument relevant to the Credit Agreement, this Guaranty or any other Loan
Document.
Guarantor further agrees to pay, and to save the Administrative Agent and the
Banks, and their respective Affiliates, harmless from all liability for, any
stamp or other Taxes (other than income taxes of the Administrative Agent or the
Banks) which may be payable in connection with the execution or delivery of the
Credit Agreement, any Borrowing thereunder, the issuance of the Notes, if any,
this Guaranty or any other Loan Document. Guarantor also agrees to reimburse the
Administrative Agent and each Bank upon demand for all reasonable expenses
(including attorneys' fees and legal expenses) incurred by the Administrative
Agent or such Bank in connection with the enforcement of any Obligations or
obligations hereunder and the consideration of legal issues relevant hereto and
thereto whether or not such expenses are incurred by the Administrative Agent on
its own behalf or on behalf of the Banks. All obligations of Guarantor provided
for in this Section 7.1 shall survive termination of this Agreement.
Notwithstanding the foregoing, the Administrative Agent or a Bank shall not have
the right to reimbursement under this Section 7.1 for amounts determined by a
court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of the Administrative Agent or a Bank.
SECTION 7.2. Guarantor agrees to indemnify the Administrative Agent,
each Bank, their Affiliates and their respective directors, officers, employees,
persons controlling or controlled by any of them or their respective agents,
consultants, attorneys and advisors (the "Indemnified Parties") and hold each
Indemnified Party harmless from and against any and all liabilities, losses,
claims, damages, costs and expenses of any kind to which any of the Indemnified
Parties may become subject, whether directly or indirectly (including, without
limitation, the reasonable fees and disbursements of counsel for any Indemnified
Party), relating to or arising out of the Credit Agreement, this Guaranty, the
other Loan Documents, or any actual or proposed use of the proceeds of the Loans
hereunder; provided, that no Indemnified Party shall have the right to be
indemnified hereunder for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction. All obligations of the
Borrowers and Guarantor provided for in this Section 7.2 shall survive
termination of the Credit Agreement and this Guaranty.
SECTION 7.3. 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
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<PAGE>
pages hereof or such other address, facsimile or telex number as such party may
hereafter specify for the purpose by written notice to the Administrative Agent
and Guarantor. Each such notice, request or other communication shall be
effective (a) if given by facsimile or telex, when such facsimile or telex is
transmitted to the facsimile or telex number specified in this Section 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.
SECTION 7.4. 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, except in accordance with the terms of the Credit
Agreement.
SECTION 7.5. EACH OF GUARANTOR AND THE ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE
STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, AND
EACH OF GUARANTOR AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH NEW YORK STATE OR TO THE EXTENT PERMITTED BY LAW, FEDERAL COURT. EACH OF
GUARANTOR AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE IN ANY ACTION OR PROCEEDING (WHETHER BROUGHT BY GUARANTOR, ANY
OF ITS SUBSIDIARIES, THE ADMINISTRATIVE AGENT, ANY BANK OR OTHERWISE) IN ANY
COURT HEREIN ABOVE SPECIFIED IN THIS SECTION 7.5 AS WELL AS ANY RIGHT IT MAY NOW
OR HEREAFTER HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED, TO
ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. EACH OF
GUARANTOR AND THE ADMINISTRATIVE AGENT AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
SECTION 7.6. 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
effective only in the specific instance and for the specific purpose for which
given.
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SECTION 7.7. 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.
SECTION 7.8. 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.
SECTION 7.9. 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.
SECTION 7.10. THIS GUARANTY SHALL BE A CONTRACT MADE UNDER AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK. ALL OBLIGATIONS OF THE BORROWERS AND
GUARANTOR AND RIGHTS OF THE ADMINISTRATIVE AGENT AND THE BANKS IN RESPECT OF THE
OBLIGATIONS AND THE OBLIGATIONS OF GUARANTOR EXPRESSED HEREIN OR IN THE OTHER
LOAN DOCUMENTS SHALL BE IN ADDITION TO AND NOT IN LIMITATION OF THOSE PROVIDED
BY APPLICABLE LAW.
SECTION 7.11. This Guaranty may be executed in any number of
counterparts, each of which shall for all purposes be deemed an original, but
all such counterparts shall constitute but one and the same agreement. Guarantor
hereby acknowledges receipt of a true, correct and complete counterpart of this
Guaranty.
SECTION 7.12. The Administrative Agent acts herein as agent for itself,
the Banks and any and all future holders of the Obligations.
SECTION 7.13. 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.
* * *
<PAGE>
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 September 15, 1999
among
THE INDIVIDUALS LISTED ON THE SIGNATURE PAGES HERETO
and
THE CHASE MANHATTAN BANK
as Administrative Agent
================================================================================
<PAGE>
BORROWER PLEDGE AGREEMENT
THIS BORROWER PLEDGE AGREEMENT (this "Agreement"), dated as of
September 15, 1999, is made among the individuals listed as pledgors on the
signature pages hereto (herein, collectively called the "Pledgors" and each
individually, a "Pledgor"), and THE CHASE MANHATTAN BANK, 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 September 15, 1999,
among the Pledgors, the financial institutions who are or from time to time
become party thereto (the "Banks") and The Chase Manhattan Bank, 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).
"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 or
comparable statute, as in effect from time to time in the relevant jurisdiction.
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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 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.
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(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 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
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.
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<PAGE>
(c) Each Pledgor additionally represents and warrants to the
Administrative Agent, for the benefit of the Banks, that (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 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
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<PAGE>
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 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 subagent, 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
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<PAGE>
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 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
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assignment and/or stock powers executed by such Pledgor in accordance with
the 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
subagent, 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 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
7
<PAGE>
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.
(ii) 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 of application set forth in Section 8 any balances, credits, deposits,
accounts or monies of such Pledgor held by the Administrative Agent.
(iii) 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
8
<PAGE>
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
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
9
<PAGE>
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.
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 HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF
THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS, AND 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 NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, FEDERAL
COURT. 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
10
<PAGE>
statement covering the Collateral or any portion thereof, shall be sufficient as
a Uniform Commercial Code financing statement and may be filed as such.
(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 nonpayment 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 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.
11
<PAGE>
(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 NEW YORK.
(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.
(o) 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.
(p) Each Pledgor agrees that the Administrative Agent may amend and
replace Schedule 1 to this Agreement from time to 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:
THOMAS C. HILBERT IRREVOCABLE TRUST
(By: Stephen C. Hilbert, as Trustee)
/s/ Stephen C. Hilbert
-------------------------------------
Name: Stephen C. Hilbert
<PAGE>
MARYJOSC, LP
(By: Rollin M. Dick, General Partner)
/s/ Rollin M. Dick
-------------------------------------
Name: Rollin M. Dick
<PAGE>
NGAIRE E. CUNEO
/s/ Ngaire E. Cuneo
-------------------------------------
Name: Ngaire E. Cuneo
<PAGE>
John J. Sabl
/s/ John J. Sabl
-------------------------------------
Name: John J. Sabl
<PAGE>
THOMAS J. KILIAN
/s/ Thomas J. Kilian
-------------------------------------
Name: Thomas J. Kilian
<PAGE>
JAMES S. ADAMS
/s/ James S. Adams
-------------------------------------
Name: James S. Adams
<PAGE>
MAXWELL B. BUBLITZ
/s/ Maxwell B. Bublitz
-------------------------------------
Name: Maxwell B. Bublitz
<PAGE>
BRUCE A. CRITTENDEN
/s/ Bruce A. Crittenden
-------------------------------------
Name: Bruce A. Crittenden
<PAGE>
DENNIS E. MURRAY, SR.
/s/ Dennis E. Murray, Sr.
-------------------------------------
Name: Dennis E. Murray, Sr.
<PAGE>
DPM, LTD
(By: Dennis E. Murray Sr. and
Margaret A. Murray, General Partner
/s/ Dennis E. Murray, Sr.
-------------------------------------
Name: Dennis E. Murray, Sr.
/s/ Margaret A. Murray
-------------------------------------
Name: Margaret A. Murray
<PAGE>
DAVID R. DECATUR
/s/ David R. Decatur
-------------------------------------
Name: David R. Decatur
<PAGE>
JAMES D. MASSEY
/s/ James D. Massey
-------------------------------------
Name: James D. Massey
<PAGE>
LAWRENCE M. COSS
/s/ Lawrence M. Coss
-------------------------------------
Name: Lawrence M. Coss
<PAGE>
JOHN M. MUTZ
/s/ John M. Mutz
-------------------------------------
Name: John M. Mutz
<PAGE>
M. PHIL HATHAWAY
/s/ M. Phil Hathaway
-------------------------------------
Name: M. Phil Hathaway
<PAGE>
SCHEDULE I
LISTING OF STOCK PLEDGED
Number of
Borrower Certificate No. Shares
-------- --------------- ---------
