Document:

EXHIBIT V

MIDCOUNTRY BANK, PIONEER MILITARY LENDING DIVISION

 

AMENDED AND RESTATED

NON-RECOURSE LOAN SALE AND MASTER SERVICES AGREEMENT

This Amended and Restated Loan Sale and Master Services Agreement (the “Agreement”) is made between MidCountry Bank, through its Pioneer Military Lending Division (“MidCountry Bank”), Pioneer Funding, Inc. (“Funding”) and the other affiliated entities which are signatories hereto (Funding and such other entities being collectively referred to as “Pioneer”) and UMB Bank, N.A. (“Agent”) is made effective as of June 12, 2009 (the “Effective Date”).

	
             
  	
            1.
 	
            Overview
 

Agent is a party to that certain Secured Senior Lending Agreement dated as of June 12, 2009 (the “Lending Agreement”) between Pioneer, Agent, and certain other lenders pursuant to which Agent and the other lenders have agreed to provide financing to Pioneer to finance acquisition of consumer loans made to military personnel. This Agreement is an Exhibit to the Lending Agreement and is executed in connection therewith and it states the terms and conditions by which MidCountry Bank, WITHOUT RECOURSE to MidCountry Bank, will sell such consumer loans, to Funding and provide various services to Pioneer, including consumer loan servicing and retail installment contract servicing (collectively, the “Services”). This Agreement is intended to cover any and all Services requested by Pioneer and provided by MidCountry Bank
during the term of this Agreement. Defined terms used herein, but not otherwise defined herein shall have the meanings given to them in the Lending Agreement.

	
             
  	
            2.
 	
            Term of Agreement; Termination
 

(a)       The term of this Agreement will begin on the Effective Date and, unless terminated as provided herein, will expire five years later; provided, however, on each anniversary of the Effective Date, the term hereof shall be extended automatically for an additional one-year period.

(b)       Any party may terminate this Agreement upon not less than one hundred eighty (180) days advance written notice to the other parties. Any termination of this Agreement will not affect the obligation to pay for Services actually provided during the remainder of the term.

(c)       MidCountry Bank may also terminate this Agreement or suspend service upon thirty (30) days notice to Pioneer and to Agent, or its successor as Agent under the Lending Agreement in the event of (i) a payment default by Pioneer, or (ii) Pioneer’s breach or failure to materially comply with any other obligation of Pioneer under this Agreement and such breach or failure is not cured within thirty (30) days after receipt of written notice of the same.

(d)       Pioneer may also terminate this Agreement if MidCountry Bank breaches any material term or condition of this Agreement and fails to cure such breach within thirty (30) days after receipt of written notice of same to the other parties hereto.

 

 

 

 

(e)       Notwithstanding anything stated in this Agreement to the contrary, the Agent may also terminate this Agreement at any time upon written notice thereof to MidCountry Bank and Pioneer, (i) in the event MidCountry Bank or MCFC is closed for any reason or is made the subject of a bankruptcy, conservatorship, receivership or similar proceeding or control of which is otherwise taken over by any government regulatory authority, (ii) military consumer loans will no longer be purchased by Pioneer from MidCountry Bank or (iii) ownership of MidCountry Bank is transferred to an owner which is not reasonably acceptable to the Agent and the Required Banks.

	
             
  	
            3.
 	
            Sale of Loans
 

MidCountry Bank will, WITHOUT RECOURSE to MidCountry Bank, originate for sale, to Funding military consumer loans (the “Loans”) made by MidCountry Bank in the ordinary course of business as previously conducted by Pioneer, and in accordance with (i) MidCountry Bank’s lending policy, and (ii) the continuing lending guidelines of Pioneer, as both may be amended from time to time. Funding will have the exclusive right to purchase, WITHOUT RECOURSE to MidCountry Bank, all of such Loans offered for sale by MidCountry Bank, and payment for such Loans shall be settled on a daily basis or on such other periodic basis as the parties may from time to time determine. All Loan sales will be upon fair and reasonable terms no less favorable to Pioneer than would be obtained in a comparable
arm’s-length transaction with a third party that is not an affiliate of MidCountry Bank. MidCountry Bank may also originate for its own account loans which are not deemed to be military consumer loans made in the ordinary course of business as previously conducted by Pioneer.

	
             
  	
            4.
 	
            Delivery of Services
 

During the term of this Agreement, MidCountry Bank shall provide to Pioneer or Agent all of the Services, as more fully described in Exhibit A attached hereto and made a part hereof. Pioneer agrees to accept and pay for the Services and for any additional Services which may be requested by Pioneer or Agent and provided pursuant to amendments to this Agreement.

	
             
  	
            5.
 	
            Fees and Payment
 

Pioneer will pay all fees due pursuant to Exhibit A as provided therein. Other Services may be billed on a monthly or other periodic basis. Any payment not received by MidCountry Bank within five (5) business days of its due date will accrue interest at a rate of one and one-half percent (1.5%) per month, or the highest rate allowed by applicable law, whichever is lower. Pioneer will be responsible for and will pay all taxes and similar fees now in force or enacted in the future imposed on the delivery of Services.

	
             
  	
            6.
 	
            Duties of MidCountry Bank
 

MidCountry Bank will provide all of the Services in accordance with all applicable laws and regulations and such standards of service as generally prevail in the financial services industry. MidCountry Bank shall indemnify Pioneer and Agent and hold Pioneer and Agent harmless from and against any and all liability, damages, and costs, including reasonable attorney fees, resulting from MidCountry Bank’s failure to comply with the provisions of this Agreement.

 

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            7.
 	
            Other Benefits to Certain Parties
 

In further consideration of the mutual benefits to MidCountry Bank and Pioneer under this Agreement:

(a)       Pioneer hereby grants MidCountry Bank for the period ending upon termination of this Agreement, unless otherwise extended as provided herein, (i) the non-exclusive rights to use the intellectual properties, including trade names and service marks, of Pioneer, and (ii) the right to use the Daybreak system or such other system or systems as may be in use by MidCountry Bank from time to time and all hardware and software associated with it. Notwithstanding the foregoing, Pioneer shall retain all ownership rights.

(b)       During the term hereof, Pioneer hereby grants to MidCountry Bank the right to market additional products and  services to Pioneer’s borrowers. Pioneer shall retain all other borrower relationship rights.

	
             
  	
            8.
 	
            Rights of Agent under Lending Agreement Upon Termination
 

Following the occurrence of an Event of Default under the Lending Agreement which is not cured within the applicable cure period, if any, following notice as provided in the Lending Agreement, should any Senior Debt then be outstanding, MidCountry Bank agrees for itself and its successors and assigns, that upon the written request of the Agent, it will: 

(a)       perform loan maintenance and collection services, on all Customer Notes securing Senior Debt for the Agent for a service charge equal to one hundred ten percent (110%) of MidCountry Bank’s actual cost of providing such services as the Agent may request, for the period commencing upon the date requested by the Agent and ending on the earlier of (i) when all of the Customer Notes owned by Pioneer have been collected; (ii) collection efforts for such Customer Notes have been terminated at the direction of the Required Banks or (iii) the Agent, at the direction of the Required Banks, gives a written notice of termination to MidCountry Bank and Pioneer. Upon request from time to time by the Agent, but in no event not more than once in every twelve (12) month period commencing upon the date MidCountry Bank begins performing
services under the Lending Agreement for the Agent, MidCountry Bank shall, upon the request of the Agent, provide the Agent with such information as it may reasonably request to determine the basis upon which MidCountry Bank has calculated its actual cost of providing services to the Agent under the Lending Agreement.

(b)       transfer possession and use of the Daybreak system, or other system or systems being used by MidCountry Bank if the Daybreak system is not then in use, and all hardware and software associated with it and all documents, instruments and records pertaining to outstanding notes securing payment of Senior Debt to the Agent or its designee at the expense of the Agent, and allow the Agent to employ or otherwise use the services of all of MidCountry Bank’s employees working in the Pioneer Military Lending Division of MidCountry Bank and which are reasonably necessary, in the judgment of the Agent, to service and collect outstanding notes securing payment of Senior Debt to be employed by the Agent or its designee; and/or

 

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(c)       cooperate with the Agent to the extent reasonably requested in the sale or transfer of all or any part of the outstanding Customer Notes securing payment of Senior Debt to one or more third parties. For purposes of Section 11.2(ii) of the Lending Agreement, Pioneer hereby agrees that any and all rights given to MidCountry Bank in Section 7(a) of this Agreement shall be given to the Agent, or its designee including MidCountry Bank, for a period extending until all Customer Notes securing payment of Senior Debt have been collected or, in the judgment of the Agent, be deemed to be uncollectible.

If MidCountry Bank performs loan maintenance and collection services at the request of the Agent pursuant to Section 11.2(ii) of the Lending Agreement, MidCountry Bank hereby agrees that the Agent shall have the same indemnity protection which is provided to Pioneer in Section 6 of this Agreement and the fees set forth in Exhibit A attached hereto shall not apply. The foregoing provisions shall apply and not be affected by the termination of this Agreement.

If the Agent elects to proceed pursuant to Section 11.2(ii) of the Lending Agreement, MidCountry Bank shall have no obligation to maintain the Daybreak system, or other system or systems being used by MidCountry Bank if the Daybreak system is not then in use, and hardware, software, documents, or instruments associated with it after such one (1) year period or such shorter period if the Agent selects a shorter period, unless otherwise agreed in writing between MidCountry Bank and the Agent. MidCountry Bank agrees to cooperate with the Agent to effect a smooth transition of such services and the Daybreak system, or other system or systems being used by MidCountry Bank if the Daybreak system is not then in use and related items described in the immediately preceding sentence to the Agent or its designee at the end of the period described in the immediately preceding sentence.

	
             
  	
            9.
 	
            Amendments
 

This Agreement may not be amended except in writing with the written consent of MidCountry Bank, Pioneer and Agent or its successor as Agent under the Lending Agreement and the Required Banks.

	
             
  	
            10.
 	
            Miscellaneous
 

MidCountry Bank shall not be deemed to be in default of any provision of this Agreement or be liable for any delay, failure of performance or interruption of the provision of Services to Pioneer or Agent resulting solely from any event of force majeure. This Agreement is made under and will be governed by and construed in accordance with the laws of the State of Nevada and applicable federal laws and regulations. Exclusive venue for all disputes arising out of or relating to this Agreement shall be the state and federal courts in Nevada and each party irrevocably consents to such personal jurisdictions and waives all objections thereto. The waiver of any breach or default of this Agreement will not constitute a waiver of any subsequent breach or default, and will not act to amend or negate the rights of the waiving party. No party may sell,
assign or transfer its rights or delegate its duties under this Agreement either in whole or in part without the prior written consent of the other parties, and any attempted assignment or delegation without such consent will be void; provided, however, if MidCountry Bank is performing Services for the Agent pursuant to Section 8 hereof, the Agent, upon prior notice to MidCountry Bank and Pioneer, may assign all of its rights hereunder to any person or entity at the direction of the Required Banks (as such term is defined in the Lending Agreement) and upon any such assignment the assignee will be entitled to all of the rights previously provided to the Agent hereunder. All notices, demands, requests or other communications required or permitted under this Agreement shall be deemed given when delivered personally to the last known address of 

 

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each party hereto, sent by facsimile to the last known address of each party hereto upon confirmation, sent and received by return receipt e-mail to the last known address of each party hereto, or upon receipt of delivery to the last known address of each party hereto of overnight mail. MidCountry Bank, Pioneer and Agent are independent contractors and this Agreement will not establish any relationship of partnership, joint venture, employment, franchise or agency between MidCountry Bank, Pioneer or Agent. None of MidCountry Bank, Pioneer or Agent will have any power to bind the other or incur obligations on another’s behalf without the other’s prior written consent, except as otherwise expressly provided herein. Except as expressly provided in this Agreement, this Agreement may be changed only by a written document signed by authorized representatives of MidCountry Bank, Pioneer and Agent.

This Agreement amends and restates in its entirety that certain Loan Sale and Master Services Agreement dated June 1, 2007, as previously amended.

[SIGNATURE PAGE TO FOLLOW]

 

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The authorized officers of MidCountry Bank, Pioneer and the Agent hereby execute this Agreement as of the Effective Date.

 

	
            MIDCOUNTRY BANK, BY AND THROUGH
 	
             
 	
            UMB BANK, N.A., AS AGENT
 
	
            ITS PIONEER MILITARY LENDING 
 	
             
 	
             
 
	
            DIVISION
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            By:
 	
            /s/ David P. Turk 
 	
             
 	
            By:
 	
            /s/ Douglas F. Page 
 
	
            Name:
 	
            David P. Turk 
 	
             
 	
            Name:
 	
            Douglas F. Page 
 
	
            Title:
 	
            Chief Financial Officer - MidCountry Bank 
 	
             
 	
            Title:
 	
            Exec. Vice President 
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            PIONEER FINANCIAL SERVICES, INC.
 	
             
 	
            PIONEER MILITARY LENDING OF
 
	
             
 	
             
 	
            GEORGIA, LLC
 
	
             
 	
             
 	
             
 
	
            By:
 	
            /s/ Laura V. Stack 
 	
             
 	
            By:
 	
            /s/ Laura V. Stack 
 
	
            Name:
 	
            Laura V. Stack 
 	
             
 	
            Name:
 	
            Laura V. Stack 
 
	
            Title:
 	
            Treasurer 
 	
             
 	
            Title:
 	
            Treasurer 
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            PIONEER MILITARY LENDING OF
 	
             
 	
            MILITARY ACCEPTANCE
 
	
            NEVADA, LLC
 	
             
 	
            CORPORATION, INC.
 
	
             
 	
             
 	
             
 
	
            By:
 	
            /s/ Laura V. Stack 
 	
             
 	
            By:
 	
            /s/ Laura V. Stack 
 
	
            Name:
 	
            Laura V. Stack 
 	
             
 	
            Name:
 	
            Laura V. Stack 
 
	
            Title:
 	
            Treasurer 
 	
             
 	
            Title:
 	
            Treasurer 
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            PIONEER FUNDING, INC.
 	
             
 	
            PIONEER MILITARY INSURANCE
 
	
             
 	
             
 	
            COMPANY
 
	
             
 	
             
 	
             
 
	
            By:
 	
            /s/ Laura V. Stack 
 	
             
 	
            By:
 	
            /s/ Laura V. Stack 
 
	
            Name:
 	
            Laura V. Stack 
 	
             
 	
            Name:
 	
            Laura V. Stack 
 
	
            Title:
 	
            Treasurer 
 	
             
 	
            Title:
 	
            Treasurer 
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            PIONEER SALES SERVICES GMBH
 	
             
 	
            ARMED SERVICES BENEFITS
 
	
             
 	
             
 	
             
 
	
            By:
 	
            /s/ Laura V. Stack 
 	
             
 	
            By:
 	
            /s/ Laura V. Stack 
 
	
            Name:
 	
            Laura V. Stack 
 	
             
 	
            Name:
 	
            Laura V. Stack 
 
	
            Title:
 	
            Treasurer 
 	
             
 	
            Title:
 	
            Treasurer 
 
	
             
 	
             
 	
             
 

 

 

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EXHIBIT A

Fees for Services

	
             
 	
            1.
 	
            Annual Relationship Fee
 

An annual fee of $33.86 for each loan and retail installment contract in the Customer’s portfolio on the last day of each fiscal month. The fee is intended to fairly reimburse the Bank for the costs associated with maintaining its customers’ relationships and it will be paid in equal monthly installments beginning on the 5th day after the Effective Date and on the 5th business day of each month thereafter. The fee for the partial first year will be prorated and based on the Customer’s portfolio on the day before the Effective Date. This fee will also be adjusted annually on the basis of the annual increase or decrease in the Consumer Price Index.

	
             
 	
            2.
 	
            Loan Origination Reimbursement Fee
 

A fee of $35.00 for each loan (not including retail installment contracts) originated by the Bank and purchased by Funding. The fee is intended to fairly reimburse the Bank for the costs associated with its loan origination expenses and it will be paid at the time of loan purchase. This fee will be adjusted annually on the basis of the annual increase or decrease in the Bank’s FAS 91 cost analysis. 

	
             
 	
            3.
 	
            Servicing Fee
 

A servicing fee in an amount equal to 8.4% of the outstanding principal balance of the Customers’ Loans serviced as of the last day of each month. The fee will be paid on or before the 5th business day of each month. The Bank will retain all ancillary revenue, including late charges and NSF fees. This fee will be adjusted annually on the basis of the annual increase or decrease in the Consumer Price Index.

 

7UNLIMITED CONTINUING GUARANTY

 

	
            TO:
 	
            UMB Bank, N.A., as Agent for the Banks

under that certain Secured Senior Lending Agreement dated as of June 12, 2009

1010 Grand Boulevard

Kansas City, Missouri 64106
 

 

1.     UNLIMITED, UNCONDITIONAL GUARANTY OF LIABILITIES.  The undersigned (hereinafter “Guarantor”) hereby requests UMB Bank, N.A., Commerce Bank, N.A., Arvest Bank, First Bank, Texas Capital Bank, N.A., Southwest Bank, an M&I Bank, SolutionsBank and BancFirst and all other lenders which may at any time hereafter become a Bank (as defined in the Agreement, hereafter defined) (collectively, the “Banks”) to extend and continue to extend credit from time to time pursuant to a Secured Senior Lending Agreement dated June 12, 2009, and all amendments thereto, replacements therefore, and extensions and renewals thereof, if any (the “Agreement”) to Pioneer Financial Services, Inc., Pioneer Military Lending of Nevada, LLC, Pioneer Military Lending of
Georgia, LLC, Military Acceptance Corporation, Inc., and Pioneer Funding, Inc. (collectively, the “Borrowers”); and to permit the foregoing and other financial accommodations to remain outstanding, be extended, renewed, or replaced, to the Borrowers.  To induce the Banks to do so and in consideration of any credit that the Banks may otherwise in their discretion extend, and for value received the sufficiency of which is hereby acknowledged, the Guarantor hereby absolutely and unconditionally guarantees and agrees to promptly perform and pay to UMB Bank, N.A., as Agent for the Banks (the “Agent”), when due (whether at the stated maturity, by declaration, acceleration or otherwise) (i) all of the Borrowers’ Senior Debt and accrued interest thereon which is at any time payable to the Banks and all of the Borrowers’ other obligations set forth in the Agreement and (ii) any and all other obligations of every kind and character now or hereafter existing of the
Borrowers to the Banks or the Agent under the Agreement or other Loan Documents regardless of any collateral now held by the Banks or the Agent for the benefit of the Banks or which may hereafter be acquired by the Banks or the Agent for the benefit of the Banks as security for the payment of any and all Senior Debt, accrued interest thereon and other obligations of the Borrowers to the 

 

Banks or the Agent under the Agreement and Loan Documents (all of the foregoing being hereinafter referred to in the aggregate as the “Liabilities”).

2.         GUARANTY TO CONTINUE.  This Unlimited Continuing Guaranty (herein, the “Guaranty”) is a continuing promise and agreement and shall apply to and cover any and all Liabilities, now or hereafter existing.  Termination hereof shall have no effect upon, and this Guaranty shall remain in full force and effect with respect to, all Liabilities (irrespective of whether contingent, not yet mature or otherwise) existing before the Agent’s receipt from the Guarantor of any written notice of termination.  The obligations of the Guarantor under this Agreement will be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrowers in respect of all or any part of the Liabilities are rescinded or must be otherwise restored by
any holder of such Liabilities, whether as a result of any proceedings in bankruptcy, reorganization or otherwise, and the Guarantor agrees that the Guarantor will indemnify the Banks and the Agent on demand for all reasonable costs and expenses (including reasonable fees of counsel) incurred by the Banks and the Agent in connection with such rescission or restoration.

3.         EXTENT OF GUARANTOR’S OBLIGATION: UNLIMITED AND UNCONDITIONAL.  The Guaranty is a guaranty of payment, and not of collection.  The Agent, for the benefit of the Banks, may when any or all of the Liabilities mature or when the Banks or the Agent, for the benefit of the Banks, have accelerated the maturity thereof, demand that the Guarantor, upon written notice pay and expiration or other termination of the thirty (30) day period provided for in Section 11.2 of the Agreement, and the Guarantor shall upon such demand immediately pay such Liabilities.  The obligations of the Guarantor hereunder are independent of the obligations of the Borrowers.  To the extent the Guarantor makes any payment to the Agent for the benefit of the Banks on behalf of the Borrowers for any
of the Liabilities, then once the Banks have been paid in full for all Liabilities, the Agent and the Banks agree to assign without recourse all of the Senior Debt, security interests, collateral and other rights against the Borrowers with respect to the Liabilities to the Guarantor.

 

4.         GUARANTOR’S OBLIGATIONS NOT AFFECTED.  The Guarantor’s liability under this Guaranty shall not be affected, modified or impaired upon the happening of any of the following at any time or from time to time, irrespective or whether the Guarantor has not received notice thereof or consented therein:

Changes in Liabilities.  Any renewal, collection, settlement, release, modification, waiver, acceleration, extension or increase in any of the Liabilities or any terms thereof (including, without limitation, any change in the rate of interest);

Changes in Documents.  Any change (whether material or otherwise) in any provision of the Loan Documents or any other document or instrument evidencing, securing, governing or otherwise relating to the Liabilities; or the acceptance of amendments or substitute or additional documents, instruments or agreements relative to the Liabilities;

Changes Regarding Collateral.  Any disposition, impairment, acceptance, substitution, release (by operation of law or otherwise), transfer or waiver of, or any other action relating to, any collateral security for the Liabilities or any guarantee thereof; any termination, release, modification, subordination or change of rights to or liens in such collateral security or failures to obtain or perfect (or continue to obtain and perfect) any liens or rights to such collateral security; any sale, foreclosure or other action taken with respect to any such collateral security, including any use, transfer or release of any proceeds thereof; any consent to the transfer of any such collateral security to any person or entity whomsoever or any sale or disposition of such collateral security; or any other action which affects, alters or impairs any of the Banks’, the
Agent’s, the Guarantor’s, the Borrowers’ or any other person’s or entity’s rights in and to such collateral security or any proceeds;

 

Payments or Default.  The acceptance of partial payments with respect to the Liabilities; any direction for application of payment by the Borrowers or any other person or entity; or the taking of or the failure to take any actions referred to in this Guaranty or any of the Loan Documents;

Failure to First Collect From Others.  The Banks’ or the Agent’s failure to have first initiated reasonable collection action following maturity or acceleration of the Liabilities with respect to any collateral security securing the Liabilities or following maturity or acceleration of the Liabilities to have first proceeded against the Borrowers or any other person or entity for the Liabilities; and

Changes in Rights.  Any enforcement, amendment, release, waiver, variation or impairment of any of the Banks’ or the Agent’s rights against the Borrowers or the Guarantor or any other person or entity liable for the Liabilities or having an interest in any collateral; anything done or omitted or neglected to be done by the Banks or the Agent in exercising any of their rights and remedies; the granting of time, credit or any other indulgence or concession or any power, discretion, option or right whatsoever (whether or not exercised) to the Borrowers or the Guarantor or any other person or entity liable for the Liabilities; the lack of genuineness, validity or enforceability or any document evidencing or relating to the Liabilities; the failure by the Agent or the Banks to give any notice to the Guarantor or any other person or entity whatsoever; or any
of any Bank’s other dealings or any other matter or thing.

5.         OTHER WAIVERS, CONSENTS AND AGREEMENTS OF GUARANTOR.  The Guarantor hereby waives and agrees not to claim, assert or take advantage of (i) the incapacity or lack of authority of any of the Borrowers or the Guarantor or any other person or entity, (ii) any defense arising from the failure of the Agent or the Banks to file or enforce a claim against any of the Borrowers, the Guarantor or any other person or entity (whether in bankruptcy or otherwise) or from any election of remedies; or (iii) the lack of 

 

diligence, presentment, demand for payment, protest for non-payment, notice of discharge, dishonor, protest, notice of acceptance of this Guaranty or any document evidencing or relating to the Liabilities or any of the Liabilities or any other indulgences.  Except as otherwise expressly provided herein, it is the intent hereof that the Guarantor shall remain liable until the payment in full of all Liabilities, notwithstanding any liquidation or insolvency or bankruptcy proceeding filed by or against any of the Borrowers or any other person or entity liable for the Liabilities.  If all or any part of any payment at any time applied by the Agent or the Banks to any of the Liabilities is or must be rescinded or returned by the Agent or the Banks for any reason (including, without limitation, the bankruptcy of any Borrower, the Guarantor or any other person or entity), the Guarantor will
(notwithstanding the revocation or termination of this Guaranty or any document evidencing or relating to the Liabilities), remain liable for the full amount so rescinded or returned as if such amount had never been received by the Agent and/or the Banks.

6.         INFORMATION REGARDING THE BORROWERS AND OTHERS.  The Guarantor represents and warrants to the Agent and the Banks that this Guaranty is executed at the Borrowers’ request, that the Guarantor has determined that it is in its best interest to issue such Guaranty, and that the Guarantor has received adequate consideration therefore.  The Guarantor further represents and warrants that the Guarantor has established adequate means of obtaining from the Borrowers, on a continuing basis, information pertaining to the Liabilities, including, without limitation, a copy of the Agreement and each of the Loan Documents, and all other matters relating to the Borrowers that are relevant to the Guarantor’s obligations hereunder, that the Guarantor is now and will continue to
be completely familiar with the operations of the Borrowers; and that the Guarantor is not relying upon the Agent or any Bank to supply, now or in the future, any such information or any other information bearing on the risk of nonpayment of any of the Liabilities or of any guarantee thereof or otherwise relating to the Borrowers or the Liabilities.  The Guarantor hereby waives and relinquishes any duty, if any, on the part of the Agent and any Bank to disclose to the Guarantor, any matter, fact or thing now or hereafter 

 

known to the Agent or any Bank relating to the business, operation, condition or assets of, or otherwise pertaining to, the Borrowers or any other person or entity, irrespective of whether the Agent or any Bank has reason to believe that such facts materially increase the risk beyond that which the Guarantor intended to assume, or are beyond the Guarantor’s knowledge.  The Agent and the Banks need not inquire into the powers of the Borrowers or their officers, employees, representatives, owners, partners, agents or other persons acting or purporting to act on the Borrowers’ behalf, and any Liabilities made or created in reliance upon the professed exercise of such power shall be guaranteed hereunder.  The Guarantor hereby consents and approves of the documents evidencing or related to the Liabilities and all terms and agreements previously or hereafter made by the Agent and the
Banks with the Borrowers or any other person liable for the payment of any of the Liabilities.

7.         CARE OF COLLATERAL.  No Bank nor the Agent shall be liable for any failure to collect or realize upon any Liabilities or any collateral which is security therefore or for any guarantee thereof or collateral which is security for such guarantee, or for any delay in so doing; nor shall the Agent and the Banks be under any obligation to take any action with regard thereto unless otherwise expressly provided herein.  The Agent and the Banks shall use reasonable care in the custody and preservation of any collateral security of the Guarantor in their possession, but need not take any steps to preserve rights against prior parties or to keep any collateral security identifiable.  The Agent and the Banks shall not have any obligation to comply with any recording, re-recording,
filing, re-filing or other legal requirement necessary to establish or maintain the validity, priority, perfection or enforceability of the Banks’ liens, claims and rights in and to, any collateral security.

8.         REPRESENTATIONS AND WARRANTIES.  In order to induce the Banks to enter into the Agreement and receive requests for extensions of credit subject to the Agreement from the Borrowers, the Guarantor hereby represents, warrants and confirms to the Agent and the Banks on the date of this Guaranty and throughout the term hereof:

 

Existence and Authority.  The Guarantor is duly organized and is in good standing under the laws the State of Georgia; has all necessary permits, licenses and franchises to enable it to conduct its business; and is qualified to do business as a foreign entity in every jurisdiction where the ownership of its property or the nature of its business requires qualification except where there would be no Material Adverse Effect (as defined below) if the Guarantor were not so qualified.  The Guarantor is duly authorized by all required legal action to execute and deliver this Agreement.  The execution, delivery and performance of this Guaranty does not and will not conflict with (i) any provision of law or any order of any court or government agency applicable to the Guarantor to the extent a conflict with any such law or order would have a Material Adverse Effect on the
Guarantor’s ability to perform its obligations under this Guaranty, (ii) the charter or bylaws of the Guarantor, or (iii) any material agreement binding upon the Guarantor or upon any of its properties and does not or will not result in or require the creation of any Lien, as defined in the Agreement, upon or with respect to any of their properties, except as contemplated by this Guaranty.

Enforceable Guaranty.  This Guaranty, when executed and delivered to the Agent, will constitute the valid and legally binding obligation of the Guarantor, enforceable against the Guarantor in accordance with the terms hereof, subject, however, to the provisions of all laws governing bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally or by the unavailability of specific performance or other equitable remedies.

Litigation.  Except as previously disclosed in writing to the Agent and the Banks, there is no pending or, to the Guarantor’s knowledge, threatened action, suit or proceeding (i) in any tribunal, whether at law or in equity, or (ii) by or before any governmental instrumentality or other agency, against the Guarantor or affecting the Guarantor, or any of its assets or property 

 

which, if adversely determined, would have a Material Adverse Effect on its financial condition or would otherwise adversely affect its ability to perform its obligations under this Guaranty in a materially adverse manner.

Pension and Welfare Plans.  The Guarantor has no pension plans or welfare plans other than as previously disclosed to the Agent in writing.  Each welfare plan, as such term is defined in Section 3.1 of ERISA, complies in all material respects with ERISA and all other applicable statutes and governmental and regulatory rules and regulations; no reportable event has occurred and is continuing with respect to any welfare plan; neither the Guarantor nor any ERISA affiliate has withdrawn from any multi-employer plan in a “complete withdrawal” or a “partial withdrawal” as defined in Sections 4203 or 4205 of ERISA, respectively; neither the Guarantor nor any ERISA affiliate has entered into an agreement pursuant to Section 4204 of ERISA; neither the Guarantor nor any ERISA affiliate has in the past contributed to or currently contributes to a
multi-employer plan; neither the Guarantor nor any ERISA affiliate has any withdrawal liability with respect to a multi-employer plan; no steps have been instituted by the Guarantor or any ERISA affiliate to terminate any welfare plan; no condition exists or event or transaction has occurred in connection with any multi-employer plan or welfare plan which could result in the incurrence by neither the Guarantor nor any ERISA affiliate of any material liability, fine or penalty; and neither the Guarantor nor any ERISA affiliate is a “contributing sponsor” as defined in Section 4001(a)(13) of ERISA of a “single-employer plan” as defined in Section 4001(a)(15) of ERISA which has two or more contributing sponsors at least two of whom are not under common control.  Except as disclosed on the consolidated financial statements of the Guarantor heretofore delivered by the Guarantor to the Agent, neither the Guarantor nor any ERISA affiliate has any liability with respect to
any welfare plan.

 

Tax Returns and Payment.  The Guarantor has filed all Federal, state, foreign and local income and other tax returns which are required to be filed and has paid all taxes which have become due pursuant to such returns and all other taxes, assessments, fees and other governmental charges upon the Guarantor and/or upon its properties, assets, income and franchises which have become due and payable by the Guarantor except those wherein the amount, applicability or validity are being contested by the Guarantor by appropriate proceedings being diligently conducted in good faith and in respect of which adequate reserves in accordance with GAAP have been established.  There is no asserted, assessed or proposed tax deficiency against the Guarantor which, if determined adversely against the Guarantor, could reasonably be expected to have a Material Adverse Effect.

Compliance With Other Instruments.  The Guarantor is not a party to any contract or agreement or subject to any charter or other legal restriction which could reasonably be expected to have a Material Adverse Effect and which is not disclosed on the Guarantor’s financial statements heretofore submitted to the Agent; none of the execution and delivery by the Guarantor of this Guaranty, the consummation of the transactions herein contemplated or the compliance with the provisions hereof will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on the Guarantor, or any of the provisions of the organizational documents of the Guarantor or any of the provisions of any indenture, agreement, document, instrument or undertaking to which the Guarantor is a party or subject, or by which the Guarantor or any of its property is
bound, or conflict with or constitute a default thereunder.  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any governmental, regulatory, administrative or public body or authority, or any subdivision thereof, or any other Person, as defined in this Agreement, is 

 

required to authorize, or is required in connection with, the execution, delivery or performance of, or the legality, validity, binding effect or enforceability of, any of this Guaranty.

Material Adverse Effect.  “Material Adverse Effect” shall mean any of the following which individually or in the aggregate amounts to more than $500,000:  (i) a material adverse effect on the properties, assets, liabilities, business, operations, prospects, income or condition (financial or otherwise) of the Guarantor, (ii) material impairment of the ability of the Guarantor to perform any of its obligations under this Guaranty, or (iii) material impairment of the enforceability of the rights of, or benefits available to, the Agent and the Banks under this Guaranty. 

9.         GOVERNING LAW; JURISDICTION, VENUE.  This Guaranty shall be governed and construed by the laws of the State of Missouri without regard to such state’s choice of law rules.

The Guarantor hereby irrevocably and unconditionally consents that any legal suit, action or proceeding arising under or in respect of this Guaranty or any of the Guarantor’s obligations hereunder may be submitted to the non-exclusive jurisdiction of any court in the State of Missouri or any federal court situated in such state, as the party commencing such suit, action or proceeding may elect.  The Guarantor irrevocably waives any objection which it may now or hereafter have to the selecting or laying of venue of any such suit, action or proceeding in any such court, submits to the personal jurisdiction of such court and hereby further irrevocably waives any claim that any such suit, action or proceeding has been brought in an inconvenient forum.

10.       WAIVER OF TRIAL BY JURY.  The Guarantor hereby irrevocably waives the right to trial by jury with respect to any action in which the Guarantor or the Banks are parties relating to or arising out of or in connection with this Agreement or any of the other Loan Documents.

 

11.       ASSIGNMENT AND PARTICIPATIONS.  This Guaranty is for the benefit of the Agent and the Banks and shall inure to the benefit of the Agent and the Banks, their successors and assigns, including the assignees of or participants in any of the Liabilities, and shall bind the heirs, executors, administrators, successors and assigns of the Guarantor.  This Guaranty is assignable by the Agent for the benefit of the Banks, in whole or in part, without further consent, upon prior notice to the Guarantor and the Borrowers, with respect to all or any portion of the Liabilities, and when so assigned, the Guarantor shall be liable to any assignee under this Guaranty without in any manner affecting the liability of the Guarantor hereunder with respect to any Liabilities retained by any Bank, if any.

12.       COST AND ATTORNEYS’ FEES.  To the full extent permitted by applicable law, the Guarantor agrees to pay all costs and expenses (including, without limitation, the reasonable fees of attorneys employed by the Agent) in the collection, realization upon, or enforcement of this Guaranty whether or not suit is brought.

13.       FINANCIAL STATEMENTS AND OTHER MATERIALS.  Except as otherwise expressly provided herein, so long as any part of the Liabilities remain unpaid, the Guarantor agrees to furnish the Agent, upon demand, financial statements of the Guarantor, including, at a minimum, a balance sheet and an income statement for the Guarantor’s most recent fiscal quarter.  The Guarantor shall also furnish to the Agent, its audited financial statements as of the end of each fiscal year within thirty (30) days of the date such audited financial statements are received by the Guarantor.

14.       BORROWERS’ OBLIGATIONS UNDER THE AGREEMENT.  The Guarantor agrees that at all times while (i) any Liabilities are outstanding or (ii) the Agreement remains in effect, it will cause the Borrowers to comply with their obligations under the Agreement.

 

15.       ENTIRE AGREEMENT: ADDITION.  No executory agreement, course of dealing or performance, trade usage or parole evidence of any nature, shall be used to supplement or modify the terms of this Guaranty.  There are no conditions to the full effectiveness of this Guaranty.

16.       MISCELLANEOUS.  The execution and delivery hereafter to the Agent for the benefit of the Banks by the Guarantor of a new instrument of guarantee shall not terminate, supersede or cancel this Guaranty, and all rights and remedies of the Banks hereunder or under any instrument of guarantee or other document hereafter executed and delivered to the Banks by the Guarantor shall be cumulative and may be exercised singly or concurrently.  If any provision of this Guaranty is invalid or unenforceable under any law or for any reason, such provision is and will be totally ineffective to the extent thereof, but the remaining provisions will be unaffected.  No change, modification or waiver of any of the provisions hereof, or any waiver of any rights or powers of the Agent and the Banks, or
any consent by the Agent for the benefit of the Banks, shall be valid or effective unless in writing and signed by an authorized officer of the Agent.  No waiver shall be applicable except in the specific instance or manner for which given.  No delay on the part of the Agent or the Banks in exercising any rights hereunder or failure to exercise such rights shall operate as a waiver of such rights.  No notice to or demand upon the Guarantor shall be deemed to be a waiver of any obligation of the Guarantor or of any right the Agent and the Banks may have hereunder to take other or further action without notice or demand.  The headings on this Guaranty are for convenience of reference only and shall not alter or otherwise affect the meaning of any provisions hereof.  Capitalized terms used herein shall have the meaning stated in the Agreement.

17.       ADDITIONAL TERMS:  To the extent any terms hereof are inconsistent with the terms of the Agreement, the terms of the Agreement will control.

______________________________________________________________________________

THE GUARANTOR ACKNOWLEDGES THAT THE GUARANTOR HAS READ, UNDERSTANDS, AND AGREES TO THE TERMS AND CONDITIONS OF THIS AGREEMENT.  THE GUARANTOR HAS EXECUTED THIS AGREEMENT WITH 

 

THE INTENT TO BE LEGALLY BOUND HEREBY.  THE GUARANTOR ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS AGREEMENT.

 

	
            Dated:
 	
            June 12, 2009
 	
             
 
	
             
 	
             
 	
             
 
	
            Guarantor:
 	
            MidCountry Financial Corp.
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
            /s/ Alison N. LaBruyere 
 	
             
 
	
             
 	
            Name:
 	
            Alison N. LaBruyere
 	
             
 
	
             
 	
            Title:
 	
            Senior Vice President and General Counsel
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
            Address:
 	
            201 Second Street, Suite 250
 	
             
 
	
             
 	
            Macon, Georgia  31201
 	
             
 
	
            Fax No.:
 	
            (478) 746-8222

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