Exhibit 10.1
AMENDMENT NO. 2 TO THE
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 2 TO THE SECOND AMENDED AND
RESTATED CREDIT AGREEMENT (this
"Amendment") dated as of March 30, 2009, by and among CONSECO,
INC., a Delaware
corporation (the "Borrower"), the lenders signatory hereto and BANK
OF AMERICA,
N.A., as administrative agent (the "Agent") for the Lenders.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Subsidiary
Guarantors referred to therein, the
Lenders, the Increasing Lenders, the Agent and JPMorgan Chase Bank,
N.A., as
syndication agent, have entered into a Second Amended and Restated
Credit
Agreement dated as of October 10, 2006, as amended by Amendment No.
1 to the
Second Amended and Restated Credit Agreement dated as of June 12,
2007 (as
amended, restated, supplemented or otherwise modified through the
date hereof,
the "Existing Credit Agreement"). Capitalized terms not otherwise
defined in
this Amendment have the same meanings as specified in the Credit
Agreement.
(2) The Borrower, the Agent, the Lenders
and the Increasing Lenders desire
to amend certain provisions of the Existing Credit Agreement as
provided more
fully herein below.
NOW, THEREFORE, in consideration of the
premises and for other good and
valuable consideration, the sufficiency and receipt of all of which
is hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Credit Agreement.
Upon, and subject to, the
satisfaction (or waiver) of the conditions precedent set forth in
Section 2
below, the Credit Agreement is hereby amended as follows:
(a) Section 1.01 of the Credit Agreement
is hereby amended by adding in the
appropriate alphabetical order the following new definitions:
""Accrued
Fee" " has the definition set forth in Section 2.10(b)."
""Amendment
No. 2" means Amendment No. 2 to this Agreement dated as of
March 30, 2009."
""Amendment
No. 2 Effective Date" means March 30, 2009, which is the
date of satisfaction (or waiver) of the
conditions precedent set forth in
Section 3 of Amendment No. 2."
""LIBOR
Floor" has the definition set forth in the definition of
Eurodollar Rate."
""Restructured the Permitted Convertible Indebtedness" means (i)
any
repurchase, redemption, put, or similar
obligation of the Company or any
Subsidiary under the Permitted Convertible
Indebtedness shall have been
extended, waived or deferred to a date
that is at least one year following
the later of the Maturity Date or the
Termination Date, or (ii) the
Permitted Convertible Indebtedness shall
have been refinanced in accordance
with the requirements of Section
7.10(f)."
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""Steering
Committee" has the meaning specified in Section 6.17."
(b) The definition of "Applicable Margin"
contained in Section 1.01 to the
Existing Credit Agreement is hereby amended in its entirety to read
as follows:
""Applicable
Margin" means, for any day, a percentage per annum equal
to (a) with respect to any Eurodollar Rate
Loan, 4.00% or (b) with respect
to any Base Rate Loan, 3.00%."
(c) The definition of "Base Rate"
contained in Section 1.01 to the Existing
Credit Agreement is hereby amended in its entirety to read as
follows:
""Base Rate"
means, for any day, a fluctuating rate per annum equal to
the highest of: (a) 1.00% per annum above
the latest Eurodollar Rate for an
Interest Period of one month, (b) 0.50%
per annum above the latest Federal
Funds Rate and (c) the rate of interest in
effect for such day as publicly
announced from time to time by BofA as its
"prime rate." The "prime rate"
is a rate set by BofA based upon various
factors, including BofA's costs
and desired return, general economic
conditions and other factors, and is
used as a reference point for pricing some
loans, which may be priced at,
above or below such announced rate. Any
change in such rate announced by
BofA shall take effect at the opening of
business on the day specified in
the public announcement of such
change."
(d) The definition of "Eurodollar Rate"
contained in Section 1.01 to the
Existing Credit Agreement is hereby amended in its entirety to read
as follows:
""Eurodollar
Rate" means, for any Interest Period with respect to any
Eurodollar Rate Loan, the highest of:
(a) 2.50%
per annum ("LIBOR Floor"),
(b) the rate
per annum equal to the rate determined by the Agent to be
the offered rate that appears on the page
of the Telerate screen (or any
successor thereto) that displays an
average British Bankers Association
Interest Settlement Rate for deposits in
Dollars (for delivery on the first
day of such Interest Period) with a term
equivalent to such Interest
Period, determined as of approximately
11:00 a.m. (London time) two
Business Days prior to the first day of
such Interest Period, or
(c) if the
rate referenced in the preceding clause (a) does not appear
on such page or service or such page or
service shall not be available, the
rate per annum equal to the rate
determined by the Agent to be the offered
rate on such other page or other service
that displays an average British
Bankers Association Interest Settlement
Rate for deposits in Dollars (for
delivery on the first day of such Interest
Period) with a term equivalent
to such Interest Period, determined as of
approximately 11:00 a.m. (London
time) two Business Days prior to the first
day of such Interest Period, or
(d) if the
rates referenced in the preceding clauses (b) and (c) are
not available, the rate per annum
determined by the Agent as the rate of
interest at which deposits in Dollars for
delivery on the first day of such
Interest Period in same day funds in the
approximate amount of the
Eurodollar Rate Loan being made, continued
or converted by BofA and with a
term equivalent to such Interest Period
would be offered by BofA's London
Branch to major banks in
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the London interbank eurodollar market at
their request at approximately
4:00 p.m. (London time) two Business Days
prior to the first day of such
Interest Period."
(e) Section 2.08(b)(i) of the Existing
Credit Agreement is hereby amended
in its entirety to read as follows:
"(i)
Indebtedness. Within five Business Days after any Net Proceeds
are received by or on behalf of the
Company or any Subsidiary in respect of
the incurrence of any Indebtedness by the
Company or such Subsidiary,
including Permitted Refinancing
Indebtedness, unsecured Indebtedness
permitted under Section 7.01(a)(xiv) and
issued or incurred on or after the
Amendment No. 2 Effective Date in excess
of $25,000,000 in the aggregate
and Permitted Convertible Indebtedness,
but excluding all other
Indebtedness permitted pursuant to Section
7.01, the Company shall prepay
Borrowings in an aggregate amount equal to
such Net Proceeds.
(f) Section 2.10 of the Existing Credit
Agreement shall be amended by
adding the following new subsection (b) to the end thereof:
"(b) The
outstanding principal amount of the Term Loan will accrue a
daily fee (the "Accrued Fee") at a rate
equal to 1.00% per annum from the
Amendment No. 2 Effective Date until such
principal amount has been paid in
full. The Accrued Fee shall be capitalized
(and the principal amount of the
Term Loan together with such capitalized
Accrued Fee shall then accrue a
daily fee at a rate equal to 1.00% per
annum) quarterly on the last day of
each March, June, September and December,
commencing June 30. 2009. The
Accrued Fee (including all capitalized
Accrued Fees) shall be paid in cash
on the Maturity Date (or the date the
principal of the Term Loans is paid
in full). For the avoidance of doubt, the
Accrued Fee shall not constitute
cash interest expense for purposes of the
Interest Coverage Ratio."
(g) Section 2.14 of the Existing Credit
Agreement is hereby deleted in its
entirety.
(h) Article 5 of the Existing Credit
Agreement is hereby amended by adding
the following Section 5.20 thereto:
"Section
5.20. Surplus Debenture Interest and Dividends. The Company
has not received any notice from NAIC, any
other Governmental Authority or
any other insurance regulatory authority
that its Insurance Subsidiaries
will not be permitted to pay dividends or
Surplus Debenture interest, and
has no reason to believe that such notice
is forthcoming."
(i) Article 6 of the Existing Credit
Agreement is hereby amended by adding
the following Section 6.16 thereto:
"Section
6.16. Steering Committee and Lenders' Financial Advisor. Any
Lender shall have the right, at any time,
with the consent of, or at the
direction of, the Required Lenders, to
form a steering committee (the
"Steering Committee"), with respect to
which the Agent shall have the right
to be a member. In no event shall there be
more than one Steering
Committee. The Steering Committee shall be
permitted to retain legal
counsel, only one of which counsel shall
have the right to reimbursement of
its fees and expenses in the same manner
as counsel to the Agent under
Section 10.04. Upon retention of any such
counsel, the Borrower shall (i)
promptly deliver to the Steering Committee
an executed fee agreement (the
"Fee Agreement") with such counsel in form
and substance satisfactory to
the Steering Committee and such counsel
and (ii)
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promptly deliver to such counsel an
initial retainer in the amount of
$100,000 in accordance with such Fee
Agreement. The Steering Committee may
at its sole discretion engage a financial
advisor to the Lenders acceptable
to the Steering Committee or have a
financial advisor retained by counsel
to the Steering Committee for the benefit
of the Lenders, which financial
advisor shall, among other things,
exercise the rights, pursuant to Section
6.09 hereof, of an agent, advisor or
representative of the Agent or the
Lenders, and review financial projections
and other financial information
prepared by or on behalf of the Company,
perform valuations of the assets
of the Company and its Subsidiaries,
review and analyze the investment
portfolio of the Company and its
Subsidiaries, and take such other actions
as are customary or reasonable for an
advisor acting in such capacity. The
fees and expenses of such financial
advisor shall be paid by the Borrower
in accordance with Section 10.04. The
Company shall cause its executives
and employees and the executives and
employees of its Subsidiaries to meet
with the financial advisor and
representatives of the Agent and the Lenders
from time to time as reasonably requested
by them. The limitation in
Section 6.09 as to the number of occasions
on which the Agent or Lenders
can exercise rights under Section 6.09
shall not apply as to the financial
advisor or the Agent or the Lenders acting
in conjunction with the
financial advisor. The scope of work
undertaken by the financial advisor
shall be reasonably acceptable to the
Steering Committee, and the results
thereof shall be made available to the
Lenders."
(j) Section 7.01(a)(xiii) of the Existing
Credit Agreement is hereby
amended in its entirety to read as follows:
"(xiii)
other secured Indebtedness in an aggregate principal amount
not to exceed $2,500,000 at any time
outstanding;"
(k) Section 7.01(a)(xiv) of the Existing
Credit Agreement is hereby amended
in its entirety to read as follows:
"other
unsecured Indebtedness; provided that, to the extent the
aggregate principal amount of any such
Indebtedness issued or incurred
after the Amendment No. 2 Effective Date
exceeds $25,000,000, such
Indebtedness shall (i) have a maturity
date that is at least one year
following the later of (A) the Maturity
Date and (B) the Termination Date,
(ii) contain covenants and events of
default that are no more restrictive,
taken as a whole, to the Borrower than the
Loan Documents, and (iii) shall
not contain any covenants or events of
default based on maintenance of the
Company's financial condition, and the
Company shall be required to prepay
the Loans in accordance with Section 2.08
with the net proceeds thereof;
and provided further that to the extent
that any unsecured Indebtedness is
used for prepayments and purchases of the
Permitted Convertible
Indebtedness, such Indebtedness shall be
treated as having been issued or
incurred under Section 7.01(a)(xix) hereof
and not this Section
7.01(a)(xiv),"
(l) Section 7.01(a)(xviii) of the Existing
Credit Agreement is hereby
amended in its entirety to read as follows:
"(xviii)
unsecured convertible notes issued by the Company on the
Prior Effective Date (together with any
refinancing thereof in accordance
with the requirements of Section 7.10(f),
"Permitted Convertible
Indebtedness") as in effect on the
Amendment No. 2 Effective Date."
(m) Section 7.01 of the Existing Credit
Agreement is hereby further amended
by deleting the word "and" at the end of Section 7.01(a)(xvii) and
adding the
following clause (xix):
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"(xix) other
unsecured Indebtedness not subject to Section
7.01(a)(xiv) above to be used solely for
prepayments and purchases of the
Permitted Convertible Indebtedness,
provided that, such Indebtedness shall
(i) have
