-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UOBIexTjsC+DlCp0CO7gOYXhOPdVvgMP+u4+k0a0PsLGIQcvd1x9nQKIsnpST/9Y PY/VSDvHtqQ/DMuCqXpZ4A== 0000950115-97-001849.txt : 19971121 0000950115-97-001849.hdr.sgml : 19971121 ACCESSION NUMBER: 0000950115-97-001849 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971120 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NAL FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000811644 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 232455294 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 033-88966 FILM NUMBER: 97725066 BUSINESS ADDRESS: STREET 1: 500 CYPRESS CREEK ROAD WEST STREET 2: STE 590 CITY: FORT LAUDERDALE STATE: FL ZIP: 33309 BUSINESS PHONE: 3059388200 MAIL ADDRESS: STREET 1: 500 CYPRESS CREEK ROAD WEST STREET 2: SUITE 590 CITY: FORT LAUDERDALE STATE: FL ZIP: 33309 FORMER COMPANY: FORMER CONFORMED NAME: CORPORATE FINANCIAL VENTURES INC DATE OF NAME CHANGE: 19920703 10-Q/A 1 AMENDMENT TO QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 1 TO FORM 10-Q [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From _________ To ____________ NAL FINANCIAL GROUP INC. ------------------------------------------------------ (Exact Name of Registrant as Specified in Its Charter) Delaware 0-25476 23-2455294 - ------------------------ --------------------- ------------------- (State of Incorporation) (Commission File No.) (IRS Employer Identification No.) 500 Cypress Creek Road West Suite 590 Fort Lauderdale, Florida 33309 Registrant's telephone number, including area code: (954) 938-8200 Not Applicable ------------------------------------------- (Former Name, if Changed Since Last Report) Indicate by check whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. (1) Yes X No --- --- (2) Yes X No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares outstanding of the Registrant's sole class of common stock, as of November 14, 1997 is 50,000,000 shares. NAL FINANCIAL GROUP INC. INDEX PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 36 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No. Description Method of Filing - ----------- ----------- ---------------- 3.4 Certificate of Designation of Series Filed herewith A Preferred Stock 4.20 Investment Agreement between NAL Filed herewith Financial Group Inc. and Conseco, Inc. dated August 21, 1997 4.21 Credit Agreement between NAL Filed herewith Acceptance Corporation and Conseco Private Capital Group, Inc. dated June 23, 1997 4.22 First Amendment to Credit Agreement Filed herewith between NAL Acceptance Corporation and Conseco Private Capital Group, Inc. dated August 21, 1997 4.23 Second Amendment to Credit Agreement Filed herewith between NAL Acceptance Corporation and Conseco Private Capital Group, Inc. dated October 1, 1997 4.24 Amendment to Registration Rights Filed herewith Agreement between NAL Financial Group, Inc., Beneficial Standard Life Insurance Company, Great American Reserve Insurance Company and CIHC, Inc. dated October 1, 1997 4.25 Warrant to Purchase Common Stock of Filed herewith NAL Financial Group Inc. (257,000 shares) dated June 23, 1997 4.26 First Amendment to Warrant to Filed herewith Purchase Common Stock of NAL Financial Group Inc. (15,000 shares) dated June 23, 1997 4.27 First Amendment to Warrant to Filed herewith Purchase Common Stock of NAL Financial Group Inc. (500,000 shares) dated June 23, 1997 4.28 Amendment to Warrant to Purchase Filed herewith Common Stock between NAL Financial Group Inc. and Bridge Rope & Co. dated September 17, 1997 4.29 Amendment to Warrant to Purchase Filed herewith Common Stock between NAL Financial Group Inc. and Kane & Co. dated September 17, 1997 4.30 First Amendment to 9% Subordinated Filed herewith Convertible Debenture between NAL Financial Group Inc. and Beneficial Life Insurance Company dated June 23, 1997 4.31 Second Amendment to 9% Subordinated Filed herewith Convertible Debenture between NAL Financial Group Inc. and CIHC, Incorporated dated October 1, 1997 (Beneficial) 4.32 First Amendment to 9% Subordinated Filed herewith Convertible Debenture between NAL Financial Group Inc. and Great American Reserve Insurance Company dated June 23, 1997 4.33 Second Amendment to 9% Subordinated Filed herewith Convertible Debenture between NAL Financial Group Inc. and CIHC, Incorporated dated October 1, 1997 (Great American) 4.34 Amendment to Subordinated Filed herewith Convertible Debenture between NAL Financial Group Inc. and CIHC, Incorporated dated October 1, 1997 (Kane & Co.) 4.35 Amendment to Subordinated Filed herewith Convertible Debenture between NAL Financial Group Inc. and CIHC, Incorporated dated October 1, 1997 (Bridge Rope) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this Form 10-Q/A to be signed on its behalf by the undersigned thereunto duly authorized. NAL FINANCIAL GROUP INC.
Signature Title Date - --------- ----- ---- /s/ Robert R. Bartolini Chairman of the Board; November 19, 1997 - ------------------------ President and Chief Executive Robert R. Bartolini Officer /s/ David H. Sheir Senior Vice President of Accounting November 19, 1997 - ------------------------ David H. Sheir
37 EX-3.4 2 CERTIFICATE OF DESIGNATION CERTIFICATE OF DESIGNATION of SERIES A PREFERRED STOCK of NAL FINANCIAL GROUP INC. Pursuant to Section 151(g) of the General Corporation Law of the State of Delaware NAL Financial Group Inc., a Delaware corporation (the "Company"), certifies that pursuant to the authority contained in its Certificate of Incorporation, as amended, and in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, its Board of Directors (the "Board of Directors") has adopted the following resolution designating a series of its Preferred Stock, $.01 par value, as Series A Preferred Stock: RESOLVED, that a series of the class of authorized Preferred Stock, $.01 par value, of the Company hereinafter designated "Series A Preferred Stock," be hereby created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows: Section 1. Designation and Amount. The shares of such series shall be designated as the "Series A Preferred Stock" (the "Series A Preferred Stock") and the number of shares initially constituting such series shall be 5,000,000. Section 2. Dividends and Distributions. (a) Each holder of shares of Series A Preferred Stock, in preference to the holders of shares of the Common Stock, $.15 par value (the "Common Stock"), of the Company and of any other capital stock of the Corporation ranking junior to the Series A Preferred Stock as to payment of dividends, shall be entitled to receive, when and as declared by the Board of Directors, a cash dividend accruing at the per share rate of nine cents ($.09) per annum, payable semi-annually. Dividend payments to the holders of shares of Series A Preferred Stock shall be payable on each semi-annual anniversary of the date of the original issuance of such shares to holders of record on the respective dates fixed for that purpose by the Board of Directors. Dividends shall be payable in cash by delivery of a check to each such holder of record at the address which is registered with the Secretary of the Company. (b) Dividends payable pursuant to paragraph (a) of this Section 2 shall begin to accrue from the date of the original issuance of the Series A Preferred Stock and shall be cumulative. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allotted pro rata on a share-by-share basis among all such shares at the time outstanding. Accruals of dividends shall not bear interest. (c) Notwithstanding anything to the contrary set forth in paragraphs (a) or (b) of this Section 2, each holder of shares of Series A Preferred Stock entitled to receive a dividend on a dividend payment date shall have the option to receive such dividend in the form of shares of the Company's Common Stock in such amount as is determined by dividing the total dividend payment due to each holder on the relevant dividend payment date by the Dividend Ratio (as that term is hereafter defined) in effect for such dividend. The holder of any shares of Series A Preferred Stock may exercise such option by delivering to the Company, at the Company's corporate office (presently 500 Cypress Creek Road, Suite 590, Fort Lauderdale, Florida 33309), or any successor location, the form of election (the "Dividend Election"), completed and executed as indicated thereon, no later than ten (10) Business Days before the date on which the dividend is payable. For purposes of this paragraph (c), the Dividend Election shall be deemed to be delivered on the day on which it is received by the Company. For purposes hereof, the term "Dividend Ratio" shall mean eighty percent (80%) of the Closing Price (as that term is defined in Section 8) on the record date for the payment of the dividend. In connection with the issuance of any shares of Common Stock pursuant to this paragraph, no fractional shares of Common Stock shall be issued, but in lieu thereof, the Company shall pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Closing Price on the record date for such dividend. (d) The holders of shares of Series A Preferred Stock shall not be entitled to receive any dividends or other distributions except as provided in this Section 2. (e) No dividends or other distributions shall be made with respect to the Company's Common Stock or any other class of stock ranking junior to the Series A Preferred Stock as to dividends if at the time of such dividend or distribution the Company is in default with respect to any dividend payable on the shares of Series A Preferred Stock. Section 3. Voting Rights. Except as required by law, the holders of shares of Series A Preferred Stock shall have no voting rights and their consent shall not be required for the taking of any corporate action. Section 4. Liquidation, Dissolution or Winding Up. (a) If the Company shall adopt a plan of liquidation or of dissolution, or commence a voluntary case under the federal bankruptcy laws or any other applicable state or federal bankruptcy, insolvency or similar law, or consent to the entry of an order for relief in any involuntary case under such law or to the appointment of a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or of any substantial part of 2 its property, or make an assignment for the benefit of its creditors, or admit in writing its inability to pay its debts generally as they become due and on account of such event the Company shall liquidate, dissolve or wind up, or upon any other liquidation, dissolution or winding up of the Company, then and in that event, no distribution shall be made to the holders of shares of Common Stock or any other class of stock ranking junior to the Series A Preferred Stock as to the amounts distributable upon liquidation, dissolution or winding up, unless, prior thereto, the holders of the Series A Preferred Stock shall have first received an amount in cash or equivalent value in securities or other consideration equal to the "liquidation preference" thereof. If upon any liquidation, dissolution or winding up, the amount so payable or distributable does not equal or exceed the "liquidation preference" of the Series A Preferred Stock, then, and in that event, the amount of cash so payable, and amount of securities or other consideration so distributable, shall be shared ratably according to the respective "liquidation preference" due to the holders of the Series A Preferred Stock. After payment in full of the "liquidation preference" owed to the holders of the Series A Preferred Stock, the holders of the Common Stock and of all other classes of stock ranking junior to the Series A Preferred Stock as to the amounts distributable upon a liquidation, dissolution, or winding up shall be entitled, to the exclusion of the holders of the Series A Preferred Stock, to share in all remaining assets of the Company in accordance with their respective interests. For the purposes hereof, the "liquidation preference" of each share of Series A Preferred Stock shall be $1.00, less the aggregate amount of all capital distributions (exclusive of dividends) made by the Company with respect to a share of Series A Preferred Stock since the date of the original issuance of the Series A Preferred Stock. (b) Neither the voluntary consolidation, merger or other business combination of the Company with or into any other Person or Persons nor the voluntary sale, lease, exchange or conveyance of all or any part of the property, assets or business of the Company to a Person or Persons other than the holders of the Company's Common Stock, shall be deemed to be a liquidation, dissolution or winding up of the Company for purposes of paragraph (a) of this Section 4. Section 5. Conversion. (a) Subject to the provisions for adjustment hereinafter set forth, each share of Series A Preferred Stock shall be convertible in the manner hereinafter set forth into fully paid and nonassessable shares of Common Stock. Each share of Series A Preferred Stock may, at the option of the holder thereof, be converted into a number of shares of Common Stock computed by dividing the sum of $1.00 by the Conversion Price (as that term is hereafter defined). The term "Conversion Price" shall mean a amount equal to eighty percent (80%) of the Closing Price (as that term is defined in Section 8) of the Company's Common Stock on the Conversion Date (as that term is defined in paragraph (d) of this Section 5). (b) The number of shares of Common Stock into which each share of Series A Preferred Stock is convertible shall be subject to adjustment from time to time as follows: (i) In case the Company shall at any time or from time to time declare a dividend, or make a distribution, on the outstanding shares of Common Stock in shares of Common Stock or subdivide or reclassify the outstanding shares of Common Stock into a greater 3 number of shares of Common Stock or combine or reclassify the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, and in each case: (A) the number of shares of Common Stock into which each share of Series A Preferred Stock is convertible shall be adjusted so that the holder of each share thereof shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock which such holder would have been entitled to receive after the happening of any of the events described above had such share of Series A Preferred Stock been converted immediately prior to the happening of such event or the record date therefor, whichever is earlier; and (B) an adjustment made pursuant to this clause (i) shall become effective (1) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of shares of Common Stock entitled to receive such dividend or distribution, and (2) in the case of any such subdivision, reclassification or combination, at the close of business on the day upon which such corporate action becomes effective. (ii) Any capital reorganization, reclassification, consolidation, merger or sale of all or substantially all of the Company's assets to another Person (other than a transaction to which clause (i) of paragraph (b) of this Section 5 applies) which is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as an "Organic Change." Prior to the consummation of any Organic Change, the Company will make appropriate provisions to insure that each of the holders of Series A Preferred Stock will thereafter have the right to acquire and receive, in lieu of or in addition to the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of such holder's shares of Series A Preferred Stock, such shares of stock, securities or assets as such holder would have received in connection with such Organic Change if such holder had converted his Series A Preferred Stock immediately prior to the effective date of such Organic Change. In any such case, the Company will make appropriate provisions to insure that the provisions of this Section 5 will thereafter be applicable to the Series A Preferred Stock. The Company will not effect any such Organic Change unless prior to the commencement thereof, the successor Person (if other than the Company) resulting from consolidation or merger or the Person purchasing such assets assumes by written instrument the obligation to deliver to each such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire. (c) In case the Company shall be a party to an Organic Change resulting in the change or exchange of the Company's Common Stock then, from and after the date of announcement of the pendency of such Organic Change transaction until the effective date thereof, each share of Series A Preferred Stock may be converted, at the option of the holder thereof, into shares of Common Stock on the terms and conditions set forth in this Section 5, and if so converted during such period, such holder shall be entitled to receive such consideration in exchange for such holder's shares of Common Stock as if such holder had been the holder of 4 such shares of Common Stock as of the record date for such change or exchange of the Common Stock. (d) The holder of any shares of Series A Preferred Stock may exercise the right to convert such shares into shares of Common Stock by surrendering for such purpose to the Company, at the Company's corporate office (presently 500 Cypress Creek Road, Suite 590, Fort Lauderdale, Florida 33309), or any successor location, a certificate or certificates representing the shares of Series A Preferred Stock to be converted with the form of election to convert (the "Election to Convert") on the reverse side of the stock certificate completed and executed as indicated, thereby stating that such holder elects to convert all or a specified whole number of such shares in accordance with the provisions of this Section 5 and specifying the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. In case the Election to Convert shall specify a name or names other than that of such holder, it shall be accompanied by payment of all transfer or other taxes payable upon the issuance of shares of Common Stock in such name or names that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of Series A Preferred Stock pursuant hereto. The Company will have no responsibility to pay any taxes with respect to the Series A Preferred Stock. As promptly as practicable, and in any event within three Business Days after the surrender of such certificate or certificates and the receipt of the Election to Convert, and, if applicable, payment of all transfer or other taxes (or the demonstration to the satisfaction of the Company that such taxes have been paid), the Company shall deliver or cause to be delivered (i) certificates representing the number of validly issued, fully paid and nonassessable full shares of Common Stock to which the holder of shares of Series A Preferred Stock so converted shall be entitled and (ii) if less than the full number of shares of Series A Preferred Stock evidenced by the surrendered certificate or certificates are being converted, a new certificate or certificates, of like tenor, for the number of shares evidenced by such surrendered certificate or certificates less the number of shares converted. Such conversion shall be deemed to have been made at the close of business on the date (the "Conversion Date") of the Company's receipt of a duly completed Election to Convert and surrender of the certificate or certificates representing the shares of Series A Preferred Stock to be converted. The rights of the holder of shares of Series A Preferred Stock surrendered for conversion shall cease with respect to such shares on the Conversion Date except for the right to receive shares of Common Stock in accordance herewith, and the person entitled to receive the shares of Common Stock shall be treated for all purposes as having become the record holder of such shares of Common Stock on the Conversion Date. The Company shall not be required to convert, and no surrender of shares of Series A Preferred Stock shall be effective for that purpose, while the transfer books of the Company for the Common Stock are closed for any purpose (but not for any period in excess of 15 calendar days); but the surrender of shares of Series A Preferred Stock for conversion during any period while such books are so closed shall become effective for conversion immediately upon the reopening of such books, as if the conversion had been made on the date such shares of Series A Preferred Stock were surrendered, and at the conversion rate in effect at the date of such surrender. (e) Upon conversion of any shares of Series A Preferred Stock, the holder thereof shall be entitled to receive any accrued dividends in respect of the shares so converted, 5 which dividends shall be prorated from the most recent dividend payment date to the Conversion Date. (f) In connection with the conversion of any shares of Series A Preferred Stock, no fractional shares of Common Stock shall be issued, but in lieu thereof the Company shall pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Closing Price on the Conversion Date. Section 6. Reports as to Adjustments. Whenever the number of shares of Common Stock into which each share of Series A Preferred Stock is convertible is adjusted as provided in Section 5 hereof, the Company shall promptly mail to the holders of record of the outstanding shares of Series A Preferred Stock at their respective addresses as the same shall appear in the Company's stock records a notice stating that the number of shares of Common Stock into which the shares of Series A Preferred Stock are convertible has been adjusted and setting forth the new number of shares of Common Stock (or describing the new stock, securities, cash or other property) into which each share of Series A Preferred Stock is convertible as a result of such adjustment, together with a brief statement of the facts requiring such adjustment, the computation of such adjustment, and the date such adjustment became effective. Section 7. Reacquired Shares. Any shares of Series A Preferred Stock converted, purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof, and, if necessary to provide for the lawful purchase of such shares, the capital represented by such shares shall be reduced in accordance with the General Corporation Law of the State of Delaware. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock, $.01 par value, of the Company and may be reissued as part of another series of Preferred Stock, $.01 par value, of the Company. Section 8. Certain Definitions. For the purposes of this resolution and the Certificate of Designation of Series A Preferred Stock which embodies this resolution, the following terms shall have the following meanings: "Business Day" means any day other than a Saturday, Sunday, or a day on which banking institutions in the State of Florida are authorized or obligated by law or executive order to close. "Closing Price" shall mean the closing bid price of the Common Stock on the over-the-counter market on the date for which the Closing Price is to be determined, as reported by the National Association of Securities Dealers Automated Quotation System, or a similarly generally accepted reporting service, or if not so available, as determined in good faith by the Board of Directors on the basis of such relevant factors as the Board of Directors in good faith considers appropriate. 6 "Person" means an individual, a corporation, a partnership, a limited liability company, an association, a business trust, or any other entity or organization. "Trading Day" means a day on which the principal national securities exchange on which the Common Stock is listed or admitted to trading is open for the transaction of business or, if the Common Stock is not listed or admitted to trading on any national securities exchange, any day other than a Saturday, Sunday, or a day on which banking institutions in the State of Florida are authorized or obligated by law or executive order to close. IN WITNESS WHEREOF, the Company has caused this Certificate of Designation of Series A Preferred Stock to be duly executed by its Chief Executive Officer and attested by its Secretary and has caused its corporate seal to be affixed hereto, this 30th day of September, 1997. NAL FINANCIAL GROUP INC. By: /s/ Robert R. Bartolini ------------------------------ Robert R. Bartolini, Chief Executive Officer (Corporate Seal) ATTEST: By: /s/ JoAnn Woodside ------------------------------ JoAnn Woodside, Secretary EX-4.20 3 INVESTMENT AGREEMENT INVESTMENT AGREEMENT This Agreement is by and between NAL Financial Group Inc., a Delaware corporation ("Company") and Conseco, Inc., an Indiana corporation or its assigns ("Conseco") to be effective as of this 21st day of August, 1997. RECITALS A. Conseco Private Capital Group, Inc. ("Lender") and Company's wholly owned subsidiary, NAL Acceptance Corporation, a Florida corporation ("Borrower") have entered into a First Amendment to Credit Agreement ("First Amendment") of even date herewith. B. Subject to the terms and conditions hereof, Conseco or its designee, has agreed to purchase certain preferred stock of the Company. C. As inducement for the Lender to advance funds under the First Amendment and for Conseco to purchase the preferred stock, the Company has agreed to amend the 9% Subordinated Convertible Debenture dated April 23, 1996, issued to Beneficial Standard Life Insurance Company in the amount of $5,000,000 and the 9% Subordinated Convertible Debenture dated April 23, 1996, issued to Great American Reserve Insurance Company in the amount of $5,000,000 (collectively, the "Conseco Debentures") to provide that the conversion price therein is fixed at thirty-two (32(cent)) cents per share based upon eighty percent (80%) of the closing bid price of the company's common stock on August 19, 1997, pursuant to the Second Amendment in the form attached hereto as Exhibit "A" (the "Conseco Debenture Amendments"). D. As a condition of Lender's execution and delivery of the First Amendment, the company shall amend certain other convertible debentures now held by third parties, as listed on Exhibit "B" attached hereto ("Other Debentures") to provide for a fixed conversion price of (i) thirty (30(cent)) cents per share for all Other Debentures other than those now held Merrill Lynch World Income Fund, Inc. and Merrill Lynch Convertible Fund, Inc. (the "Merrill Debentures") and (ii) thirty-two (32(cent)) per share for the Merrill Debentures as to (i) and (ii) when and as Conseco or any affiliate acquires such Other Debentures all as hereinafter more specifically provided for herein. E. As an inducement to the company to enter into this Agreement, Conseco agrees to convert the Conseco Debentures and Other Debentures it acquires at the Closing or as soon thereafter as possible. AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals, and to induce the Lender to enter into the First Amendment, the parties hereby agree as follows: 1. For purposes of this Agreement, the term "Closing" shall mean one business day following the later of (i) the expiration of the waiting period under the Hart-Scott-Rodino Act with respect to a filing made by Conseco thereunder with respect to its proposed acquisition of control of the company ("HSR Filing") or (ii) the resolution of any objections or antitrust issues raised by the government as a result of such filing. Conseco and the Company agree to make the necessary filings under the Hart-Scott-Rodino Act by August 27, 1997. 2. At the Closing, Conseco shall cause the Conseco Debentures and Other Debentures owned by Conseco to be converted to common stock of the company in accordance with their amended conversion prices as provided herein to the extent that the Company has sufficient authorized common shares, and will complete all such remaining conversions after sufficient authorized shares are available. 3. Conseco or its designees will use its best efforts to acquire the Other Debentures at or prior to Closing on the terms reflected in term sheets sent to the holders of the Other Debentures. At the Closing, the Company shall execute and deliver the Conseco Debenture Amendments reflecting the fixed conversion price of thirty-two (32(cent)) cents per share and at the Closing upon receipt of written notification from Conseco that Conseco, or one of its affiliates, has acquired all or any part of the Other Debentures, the Company shall enter into an amendment with such acquiring party providing for the amendment of the conversion price of the Other Debentures so acquired to a fixed price of thirty (30(cent)) cents per share except for the Merrill Debentures whose conversion price shall be amended to a fixed price of thirty-two (32(cent)) cents per share; such amendments being substantially in the same form as the Conseco Debenture Amendments. 4. At the Closing, Conseco shall cause the Lender to extend the maturity date of all monies (i.e., the Original Loan and the Working Capital Loan) advanced to Borrower by Lender under its Credit Agreement with Borrower to April 1, 1998. 5. The Company shall immediately undertake to amend its Certificate of Incorporation to increase its authorized shares of common stock in an amount sufficient to issue common stock upon conversion of the Conseco Debentures and Other Debentures (assuming the same are acquired and converted by Conseco or its affiliates) at the amended conversion price. The Company certifies that its Board of Directors has adopted a resolution proposing such an amendment to its shareholders. Conseco shall cooperate with the Company in connection with such amendment and vote in favor thereof. Prior to the Closing, the Company agrees not to issue, offer or sell any shares of common stock or preferred stock or securities convertible into common or preferred stock without consent of Conseco. 6. The Company certifies that its Board of Directors has adopted resolutions increasing the members of its Board of Directors by three (3) positions to create three (3) vacancies effective as of Closing, and have authorized such vacant positions to be filled by Conseco appointees at the Closing. 7. At the Closing, Conseco or its designee shall contribute additional equity in an amount equal to the difference between Ten Million Dollars ($10,000,000), and the amount of loan advances made by the Lender to the Company under the Working Capital Loan as defined in the First Amendment as of the Closing in exchange for preferred stock of the Company have terms acceptable to Lender and consistent with the provisions of Exhibit "C" attached hereto. 8. Conseco's obligations to close shall be subject to the following conditions: (i) no government agency has raised any objections or antitrust issues with respect to the acquisition of the Other Debentures by Conseco or its affiliates, (ii) the Borrower is not in material default of 2 its obligations to Lender beyond applicable cure periods, (iii) the holders of the Other Debentures shall have complied with their agreements to sell the Other Debentures to Conseco or its affiliates (iv) the Company is not a party to any insolvency, receivership or bankruptcy proceedings, (v) the Company has not breached its obligations under this Agreement, or (vi) there has been no material adverse change in the financial condition or business prospects of the Company and its subsidiaries since the date hereof provided Lender provides the advances required under the Credit Agreement with Borrower. 9. Conseco agrees that (i) from the date hereof, until Closing, neither Conseco nor any of its Affiliates will initiate or cooperate in the initiation of any reorganization or liquidation proceeding with respect to the Company under the Bankruptcy Act, (ii) for a period of six (6) months following the Closing, Conseco will not cause the Company to engage in a cash out merger with Conseco or any Conseco affiliate or any other transaction in which minority shareholders are forced to exchange their shares for cash or other consideration unless the transaction is approved by a majority of the disinterested members of the Board of the Company, (iii) for a period of there (3) months following the Closing, Conseco will not cause the Company to engage in a cash out merger with Conseco or any Conseco affiliate or other transaction in which minority shareholders of the Company are forced to exchange their shares for cash or other consideration unless the transaction is approved by a majority of such minority shareholders. This paragraph does not prohibit purchase of Company shares by Conseco or its affiliates on a voluntary basis. 10. This Agreement is for the benefit of the Lender, Conseco, and its affiliates, and shall have no effect on any Other Debentures not transferred to Conseco or its affiliates, not shall it benefit current holders of the Other Debentures. 11. The Company agrees that upon Conseco's purchase of the Merrill Debentures, the Company shall amend all those certain warrants issued September 12, 1996, to the holders of Merrill Debentures of shares of common stock of the Company so as to provide a strike price being adjusted to one hundred percent (100%) of the closing bid price of the Company's common stock, as reported on the principal exchange or automated quotation system upon which the Company's common stock trades on the day of the expiration of the waiting period for the HSR filing made by Conseco with respect to its proposed acquisition of control of the Company (said warrants being retained by such Merrill Lynch affiliate). 12. The Company represents that it has been duly authorized to enter into and perform this Agreement and that the execution and performance of this Agreement by the Company will not violate or cause a default under any orders, agreements, indentures or laws to which the Company is a party or by which it is bound. 13. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. 14. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 15. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. 3 16. In the event any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provisions in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 17. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. 18. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonably attorneys' fees in addition to any other available remedy. In addition, the Company shall pay the reasonable attorney fees incurred by Conseco in connection with the transactions contemplated by this Agreement and the preparation of this Agreement. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the first above-mentioned date. CONSECO, INC. By: /s/ Ngaire E. Cuneo --------------------------------- Ngaire E. Cuneo, Executive Vice President NAL FINANCIAL GROUP INC. By: /s/ Robert R. Bartolini. -------------------------------- Robert R. Bartolini, Chairman and Chief Executive Officer EX-4.21 4 CREDIT AGREEMENT CREDIT AGREEMENT between CONSECO PRIVATE CAPITAL GROUP, INC. and NAL ACCEPTANCE CORPORATION CREDIT AGREEMENT NAL ACCEPTANCE CORPORATION, a Florida corporation (the "Borrower"), and CONSECO PRIVATE CAPITAL GROUP, INC., an Indiana corporation (the "Lender"), agree as follows: SECTION 1. RULES OF CONSTRUCTION AND DEFINITIONS. (a) Rules of Construction. Accounting Terms shall have the meanings given them under generally accepted accounting principles ("GAAP"). Except as otherwise expressly provided herein, all computations and determinations for purposes of determining compliance with the financial requirements of this Agreement shall be made in accordance with GAAP as in effect on the date hereof. If GAAP shall change subsequent to the date hereof, Borrower may make such computations and determinations for purposes of determining compliance with the financial requirements of this Agreement in accordance with GAAP then in effect if Borrower shall deliver to the Lender a letter from its independent certified public accountants stating that such changes in GAAP subsequent to the date hereof have not, in the aggregate, materially affected the computations and determinations used in determining compliance with the financial requirements of this Agreement. (b) Definitions. The following terms when used herein shall have the following meanings when used, except in the case of accounting terms, with the initial letter capitalized: "Adjusted LIBOR" means, for each LIBOR Loan, the rate per annum (rounded up, if necessary, to the nearest 1/100%) determined by the Lender to be equal to the quotient of (a) the LIBOR divided by (b) 1 minus the Reserve Requirement. "Advance" means a disbursement of proceeds of the Loan. "Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or executive officer of such Person. For purposes of this definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of a Person means the possession, direct or indirect, of the power (whether or not exercised) (i) to vote 10% or more of the securities having ordinary voting power or (ii) to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "Agreement" means this Credit Agreement. "Authorized Officer" means the Chief Executive or Financial Officer, or the President of the Borrower, or any other officer whose authority to perform acts on behalf of the Borrower which must be performed by an "Authorized Officer" under the terms of this Agreement, is evidenced to the Lender by a duly certified copy of a resolution of the Board of Directors of the Borrower. "Autorics II" means Autorics II, Inc., a Delaware corporation which is the wholly owned subsidiary of the Borrower and is entitled to certain excess reserve balances and residual distributions under the Trusts. "Banking Day" means a day on which the Lender is open for the purpose of conducting substantially all of its business activities in the City of Carmel, Indiana. "Base Rate" means the per annum rate equal to the sum of (i) the Prime Rate in effect from time to time, plus (ii) one and one-half percent (1-1/2%) per annum; which Base Rate shall change simultaneously with any change in such Prime Rate. "Change in Control" means the time at which (i) any Person (including a Person's Affiliates and associates) or group (as that term is understood under Section 13(d) of the Exchange Act and the rules and regulations thereunder), has become the beneficial owner of a percentage (based on voting power, in the event different classes of stock shall have different voting powers) of the voting stock of Parent Corporation equal to at least twenty-five percent (25%), other than existing shareholders which currently own in excess of twenty-five percent (25%) and existing debenture holders whether upon exercise of conversion rights currently existing or otherwise, (ii) there shall be consummated any consolidation or merger of Parent Corporation pursuant to which Parent Corporation's common stock (or other capital stock) would be converted into cash, securities or other property, other than a merger or consolidation of Parent Corporation in which the holders of such common stock (or such other capital stock) immediately prior to the merger have the same proportionate ownership, directly or indirectly, of common stock of the surviving corporation immediately after the merger as they had of Parent Corporation's common stock immediately prior to such merger, or (iii) all or substantially all of Parent Corporation's assets shall be sold, leased, conveyed or otherwise disposed of as an entirety or substantially as an entirety to any Person (including an Affiliate of Borrower) in one or a series of transactions. "Environmental Law" means any federal, state or local law, rule, regulation, order, writ, judgment, injunction, decree, determination or award relating to Hazardous Materials, the environment or to the release of any materials into the environment, including, without limitation the Clean Air Act, as amended, the Clean Water Act of 1977, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Hazardous Materials Transportation Act, as amended, and the Resource Conservation and Recovery Act of 1976, as amended. "Equity Infusion" means any equity funding, whether by the sale of securities or contribution of capital in which the Borrower, the Parent Corporation or any Subsidiary receives or has funds applied for its benefit in an amount equal to or greater than Five Million Dollars ($5,000,000). 2 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. "Event of Default" means any event or condition identified as such in Section 8 and the term "Default" shall mean any breach of any term, condition, provision, covenant or representation by the Borrower or any other event or condition which, with the lapse of time, the giving of notice, or both would constitute an Event of Default. "Hazardous Materials" means (i) materials the presence of which requires investigation or remediation under any Federal, State or local law, rule, regulation, ordinance, order, action or policy; (ii) materials listed in 49 C.F.R. ss.172.101, materials defined as hazardous pursuant to Section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended; (iii) any flammable, explosive, radioactive, carcinogenic or mutagenic materials (including any biomedical materials or wastes the use, storage, handling or disposal of which is regulated under any Federal, State or local law, rule, regulation, ordinance, order, action or policy); (iv) hazardous or toxic wastes or substances, petroleum or petroleum distillates; (v) asbestos or material containing asbestos which have become friable, or, polychlorinated biphenyls or similar materials which have been released, in violation of any applicable Environmental Law; or (vi) infectious or potentially infectious materials, blood and other bodily fluids in any form (including laboratory specimens), used needles and syringes, used gloves and other disposable protective clothing or devices, contaminated linen, uniforms or laundry, or any other medical waste. "Lender" and "Borrower" are used as defined in the preamble. "LIBOR" means, as of any time the same is to be determined by the Lender, the per annum interest rate (rounded up, if necessary, to the nearest 1/100%) at which deposits of U.S. dollars in Permissible Increments quoted for the offering to leading banks for the applicable LIBOR Interest Period in the London interbank market at approximately 11:00 a.m. (London time) on the date of commencement of each LIBOR Interest Period (or the first Banking Day thereafter if not a Banking Day). "LIBOR Interest Period" means each monthly period commencing on the first day of each calendar month and ending on the last day of such month. "LIBOR Loans" means any Advances under the Loan when and to the extent that the interest rate therefor is determined by reference to the Adjusted LIBOR. "LIBOR Rate" means a rate to be calculated by reference to the LIBOR for the LIBOR Interest Period under Section 2(b). 3 "Lien" means any lien, security interest, financing statement, mortgage, pledge, collateral assignment, title retention lien, sale and leaseback arrangement, or other charge, subordination or encumbrance of any kind securing the payment or performance of any obligation, or any other type of preferential or trust arrangement on or with respect to real or personal property securing the payment or performance of any obligation, including, without limitation, the lien or retained security title of a conditional vendor. "Loan" means the Loan in the Maximum Amount not to exceed Five Million Dollars ($5,000,000) constituting the indebtedness for borrowing money owed by Borrower to Lender advanced pursuant to Section 2(a)(i) hereof. "Loan Documents" mean this Agreement, the Note, the Security Agreement, the Pledge Agreement, the Blocked Account Agreement referred to in Section 2(a)(i)(D) and any other documents which at any time evidence or secure the Loan. "Maturity" means the earlier of (i) December 31, 1997, (ii) the date of an Equity Infusion, or (iii) upon a Change in Control of the Parent Corporation; at which time all Advances under the Loan shall be due and payable. "Maximum Amount" means with respect to the limit on the Loan the sum of Five Million Dollars ($5,000,000). "Net Worth" means, as of the date of determination, that amount determined to be the total shareholders' equity in the balance sheet of the Parent Corporation, computed on a consolidated basis, furnished pursuant to Section 5(b)(i) as of such date. "Note" is the promissory note evidencing the Loan as used in Section 2(a)(i)(C) and any other promissory note made by Borrower payable to the Lender as may be outstanding from time to time. "Obligations" mean: (i) All obligations, liabilities and indebtedness, and all renewals and extensions thereof, now or at any time hereafter owed to the Lender by Borrower, whether such indebtedness, obligations and liabilities are direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several or joint and several and whether such indebtedness, obligations and liabilities now exist or hereafter arise, arising from, under, by virtue of or pursuant to the Loan Documents and Securities Purchase Agreement, as the same may hereafter be modified, amended, restated and/or extended from time to time, together with all interest accruing thereon; (ii) All obligations, indebtedness and liabilities of Borrower to the Lender now existing or hereafter arising, under the terms of any and all other security 4 agreements, pledge agreements, assignments of collateral, mortgages or other security documents (as the same may be amended, restated, modified, renewed and/or extended from time to time and at any time) now or hereafter securing all or any part of the Loan; (iii) All costs of collection and all costs and reasonable attorneys' fees incurred by the Lender in the enforcement of this Agreement; and (iv) Any and all modifications, renewals and extensions of one or more of the indebtedness, liabilities, obligations listed in clauses (i), (ii) and (iii) preceding, including without limitation: (A) modifications of the required principal payment dates or interest payment dates, deferring or accelerating payment dates wholly or partly; and (B) modifications, extensions or renewals at a different rate of interest whether or not, in the case of a promissory note or contract, the modification, extension or renewal is evidenced by a new or additional promissory notes or other contract. "Officer's Certificate" means a certificate signed by an Authorized Officer of the Borrower confirming that all of the representations contained in Section 4 of this Credit Agreement and Article V of the Securities Purchase Agreement are true and correct as of the date of such Certificate except as specified therein, and with the further exception that the representation contained in Section 4(d) will refer to the latest financial statements which have been furnished to the Lender under the terms of this Credit Agreement as of the date of any such Certificate. Such Certificate shall further confirm that no Event of Default or Default shall have occurred and is then continuing, or if any Default or Event of Default shall have occurred and is continuing, such Certificate shall describe it and describe the steps being taken or planned by the Borrower to correct such situation. The Officer's Certificate shall be substantially in the form of Exhibit "A". "Permissible Increment" shall mean a minimum principal amount of Two Hundred Thousand Dollars ($200,000) and in minimum increments of Fifty Thousand Dollars ($50,000) above such minimum principal amount. "Parent Corporation" means NAL Financial Group Inc., a Delaware corporation which owns all of the issued and outstanding stock of the Borrower. "Permitted Encumbrances" is used as defined in Section 6(b). "Person" means an individual, partnership, corporation, joint stock company, trust (including a business trust), unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "Plan" means an employee pension benefit plan as defined in ERISA. "Pledge Agreement" is used as defined in Section 3(b) hereof. 5 "Prime Rate" means a variable per annum interest rate adjusted daily, equal at all times to the rate established and quoted from time to time by the Lender's bank, Nations Bank, N.A., as the Prime Rate at its principal office and changing contemporaneously with each change in such bank's prime rate. The Prime Rate shall not necessarily have any relation to the rate of interest which such bank actually charges Lender on any loans or class of loans. "Reserve Requirement" means, for any LIBOR Loan for any LIBOR Interest Period therefor, the daily average of the stated maximum rate (expressed as a decimal) at which reserves, including any marginal, supplemental, or emergency reserves, are required to be maintained during such LIBOR Interest Period under Regulation D by member banks of the Federal Reserve System against "Eurocurrency liabilities" (as such term is used in Regulation D), but without benefit or credit of proration, exemptions, or offsets that might otherwise be available from time to time under Regulation D, to the extent applicable to Lender. Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by the Lender against any category of liabilities that includes deposits by reference to which the Adjusted LIBOR is to be determined or any category or extension of credit or other assets that includes LIBOR Loans. "Security Agreement" is used as defined in Section 3(a) hereof. "Securities Purchase Agreement" means the Securities Purchase Agreement dated as of April 23, 1996, by and between the Parent Corporation and Affiliates of the Lender, Beneficial Standard Life Insurance Company and Great American Reserve Insurance Company. "Subsidiary" means (a) any corporation of which an aggregate of 50 percent or more of the outstanding stock (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by the Parent Corporation and/or one or more Subsidiaries of the Parent Corporation, and (b) any partnership in which Parent Corporation and/or one or more Subsidiaries of the Parent Corporation shall have an interest (whether in the form of voting or participation in profits or capital contribution) of 50 percent or more. "Trust" means the Trusts listed on Exhibit "B" attached hereto that have been used by Borrower for securitizations. SECTION 2. THE LOAN. (a) Terms of Loan. (i) Loan Advances. From the date hereof and until the Banking Day next preceding Maturity, the Lender will make Advances from time to time to the Borrower, in amounts not exceeding the Maximum Amount of Five Million Dollars ($5,000,000). Any Advance repaid by the Borrower shall not be re-advanced by the Lender. 6 The making of the Advances shall be subject to the further provisions of this Section 2, and shall be subject to all of the conditions of lending stated in Section 7 being fulfilled at the time of the Advance, and provided further that each Advance shall be on the terms and subject to the conditions hereinafter stated. (A) Interest. The Loan shall bear interest (calculated on the basis that an entire year's interest is earned in 360 days) from the date of each Advance until repaid or until Maturity on any Permissible Increment of outstanding Advances of the Loan, at the LIBOR Rate of Four and Twenty-Five Hundredths Percent (4.25%) per annum above the Adjusted LIBOR, compounded monthly. Adjusted LIBOR and the LIBOR Rate shall remain fixed throughout the applicable LIBOR Period, with the same being adjusted monthly on the first Banking Day of each month. After maturity, whether by acceleration or scheduled Maturity, until paid in full, or when and so long as there shall exist any uncured Default, the Loan shall bear interest at a rate equal to three percent (3%) per annum above the otherwise applicable rate (calculated on the basis that an entire year's interest is earned in 360 days). Interest shall be due and payable quarterly. Any Advances or Loan balance not in a Permissible Increment may at the option of the Lender accrue at a per annum rate equal to the Base Rate. (B) Use of Proceeds. The Advances may only be used by the Borrower to initially pay the closing fees, charges and costs which are the Borrower's expenses under the terms of this Agreement and subsequently for working capital purposes. In addition to working capital purposes, the Advance may be used by the Borrower for the following purposes: (l) To fund the amounts owed in the acquisition of motor vehicle leases with overdue payments exceeding 90 days from General Electric Capital Corporation in an amount not to exceed $900,000; (2) To fund the amounts owed in the acquisition of motor vehicle leases without delivery of vehicle titles within 120 days from General Electric Capital Corporation in an amount not to exceed $400,000; (3) To fund repurchase obligations caused by first payment defaults under Trust 1997 A in an amount not to exceed One Million Three Hundred Thousand Dollars ($1,300,000); (4) To motor vehicle dealers which are owed funds related to the acquisition of motor vehicle leases in an amount not to exceed $470,000. The Borrower's working capital purposes shall further include the Borrower's acquisition and financing of sub-prime motor vehicle loans in the ordinary course of business. In no event shall the Borrower use any Advance to fund repurchase obligations, 7 reserves or losses or any other payment to any Trust, except as provided in Sub-item (3) above, without the prior written consent of Lender. (C) Method of Borrowing. The obligations of the Borrower to repay the Loan shall be evidenced by a promissory note ("Note") attached as Exhibit "C" and made a part hereof. The principal amount of the Loan outstanding from time to time shall be determined by reference to the books and records of the Lender on which all Advances under the Loan and all payments by Borrower on account of the Loan shall be recorded. Such books and records shall be deemed prima facie to be correct as to such matters absent manifest error. Principal may be prepaid in part or in whole without premium or penalty, provided that such prepayments shall not be re-advanced. (D) Mandatory Principal Payments. The Borrower will be required to make prepayments of principal of the Loan in such amounts as may be distributed to the Borrower from Autorics II or the Trust. The Borrower shall establish a bank account into which all such payments received from Autorics II or the Trust shall be deposited, and the Lender shall have debit authority to withdraw such amounts to apply towards the Loan and Borrower shall be prohibited from making withdrawals pursuant to a Blocked Account Agreement acceptable to Lender. (E) Maturity of Loan. The Loan and all accrued interest thereon shall be payable in full at Maturity. (b) Procedures for Electing LIBOR Rates. LIBOR Rates must comply with the following procedures and are subject to the other conditions contained in this Agreement. In the event of noncompliance, the Lender at its option may impose the Base Rate to accrue on the Loan in lieu of the LIBOR Rate. (i) The Lender may elect to apply the Base Rate at any time a Default or Event of Default exists. (ii) Notwithstanding any other provision of this Agreement, in the event that the Lender determines (which determination shall be conclusive and binding upon the Borrower) that by reason of circumstances affecting the London interbank market, adequate and reasonable means do not exist for ascertaining the LIBOR for any LIBOR Interest Period at a time when the outstanding balance of Advances under the Loan is being maintained at the LIBOR Rate, the Lender shall forthwith give notice of such determination, confirmed in writing, to the Borrower. If such notice is given, then the outstanding principal balance of Advances under the Loan bearing interest at the LIBOR Rate shall be converted, on the last day of the then current LIBOR Interest Period, to a rate equal to the Base Rate. (iii) If any law or any governmental regulation, guideline or order or interpretation or application thereof by any governmental authority charged with the interpretation or administration thereof or compliance with any request or directive of any central 8 bank or other governmental authority whether or not having the force of law (A) imposes, modifies or deems applicable any reserve, special deposit or similar requirement against assets held by, credit extended by, deposits with or for the account of, or other acquisition of funds by, any bank (other than requirements expressly included herein in the determination of the Adjusted LIBOR hereunder), or (B) imposes upon any bank any other condition or expense with respect to this Agreement, or the making, maintenance or funding of any part of the proceeds of a LIBOR Rate Advance or any security therefor; and the result of any of the foregoing is to increase the cost to, reduce the income receivable by, or impose any expense upon the Lender with respect to the outstanding balance of the Loan bearing interest at the LIBOR Rate or the making, maintenance or funding of any part thereof by an amount which the Lender deems to be material (the Lender being deemed for this purpose to have made, maintained or funded the proceeds of a LIBOR Rate Advance from certificates of deposit), the Lender shall from time to time notify the Borrower of the amount determined in good faith (using any averaging and attribution methods employed in good faith) by the Lender (which determination if made in good faith shall be presumed to be correct absent manifest error) to be necessary to compensate the Lender for such increase in cost, reduction in income or additional expense. Such amount shall be due and payable by the Borrower to the Lender ten (10) Banking Days after such notice is given. A certificate as to the amount of such increase in cost, reduction in income or additional expense delivered by the Lender to the Borrower shall be conclusive and binding for all purposes, absent manifest error. (c) Method of Payment. All payments of principal and interest on the Loan will be payable at the principal office of the Lender in Indianapolis, Indiana in funds available for immediate use at that city and no such payment will be considered to have been made until received in such funds. 9 (d) Advances of the Loan. Each Advance will be conditioned upon receipt by Lender from the Borrower of an executed closing statement or an application for an Advance accompanied by an Officer's Certificate. The Lender shall be entitled to rely on any oral or written request received by it in good faith from anyone reasonably believed by the Lender to be an Authorized Officer. The Borrower shall promptly confirm any oral communication by delivering an Application upon request of Bank. (e) Fees. The Borrower shall pay to the Lender at closing a commitment fee for the Loan of One Hundred Thousand Dollars ($100,000). In addition, the Parent Corporation shall grant Conseco, Inc. or its designee an additional 257,000 warrants with a strike price of fifteen cents ($. 15) per share with a five (5) year maturity. SECTION 3. COLLATERAL FOR THE OBLIGATIONS. All of the Obligations will be secured and supporte as follows: 10 (a) Security Interest. The Loan and all other Obligations are secured by a security interest in certain payments due Borrower now existing or hereafter acquired, which security interest will be created by a security agreement (the "Security Agreement") in the form of Exhibit "D". The security interest shall be a first priority security interest in the collateral stated therein with no junior liens permitted. (b) Pledge. The Loan and all other Obligations are secured by a pledge by the Borrower of its stock of Autorics II, which pledge will be created by the pledge agreement (the "Pledge Agreement") in the form of Exhibit "E". The pledge shall be a first priority security interest and pledge in the collateral stated therein with no junior liens permitted. SECTION 4. REPRESENTATIONS AND WARRANTIES. To induce the Lender to make the Loan, the Borrower represents and warrants to the Lender that: (a) Organization of the Borrower. The Borrower is a corporation organized, existing and in good standing under the laws of the State of Florida. The Borrower is qualified to do business in every jurisdiction in which the character of the properties owned or the nature of the business conducted by the Borrower makes such licensing or qualification to do business necessary, except where the failure to be in good standing or to be duly licensed or qualified to do business would not have a material adverse effect on the Borrower. No jurisdiction in which the Borrower is not qualified has asserted that the Borrower is required to be qualified to do business therein. (b) Authorization; No Conflict. The execution and delivery of this Agreement, the borrowings hereunder, the execution and delivery of the other Loan Documents required to be executed by the Borrower under the terms of this Agreement and the performance by the Borrower of its obligations under this Agreement, and such other Loan Documents are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not and will not contravene or conflict with any provision of law or of the certificate of incorporation or by-laws of the Borrower, and do not and will not violate in a material manner any agreement binding upon the Borrower or a material portion of its property. (c) Validity and Binding Nature. This Agreement and the other Loan Documents to which the Borrower is required to be a party under the terms of this Agreement are the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws enacted for the relief of debtors generally, from time to time in effect. (d) Financial Statements. The Borrower has delivered to the Lender annual financial statements for the Borrower for the year ending December 31, 1996, and financial statements for the period ending April 30, 1997. Such financial statements present fairly the financial position of the Borrower as of the dates thereof and the results of the operations and changes in financial position for the periods 11 ending on the dates thereof, in accordance with GAAP consistently applied, except as noted in the footnotes which are a part of such statements. Since the date of the latest of such financial statements, there has been no material adverse change in the financial condition of the Borrower or in the results of the operations thereof. All projected operating results provided to the Lender, or to be provided to the Lender under Section 5(b) hereof, were and shall be prepared on the basis of assumptions, data, information, tests or other conditions believed to be valid or accurate or to exist at the time such estimates were prepared and furnished. (e) Litigation and Contingent Liabilities. Except as shown in Exhibit "F", no litigation, arbitration proceeding or governmental proceeding is pending or is threatened against the Borrower or any Subsidiary which would, if adversely determined, adversely affect the financial condition or continued operations of the Borrower or any Subsidiary. The Borrower or any Subsidiary has no material contingent liabilities not provided for or disclosed in the financial statements referred to in Section 4(d). (f) Ownership and Liens. The Borrower and its Subsidiaries have good title to all of its properties and assets shown on its financial statements, except such properties or assets as have been disposed of since the date of such statements in the ordinary course of business or as no longer are used or useful in the conduct of its business. None of the assets of the Borrower or any Subsidiary is subject to any Lien. (g) Solvency. Each of the following is true and correct for the Borrower: (A) the fair value, the market value and the fair salable value of its property is (i) greater than the total amount of its liabilities (including contingent liabilities) and (ii) greater than the amount that would be required to pay its probable aggregate liability on its existing debts as they mature; (B) its property and capital is not unreasonable in relation to its business or any contemplated or undertaken transaction; and (C) it does not intend to incur, or believe that it will incur, debts beyond its ability to pay such debts as they become due. (h) Employee Benefit Plans. As of the date hereof the Borrower maintains a Plan in compliance with all applicable laws and regulations, and neither a "reportable event", nor a "prohibited transaction", has occurred under, nor has there occurred any complete or partial withdrawal from, nor has there occurred the appointment of a trustee to administer any Plan maintained for employees of the Borrower or "affiliate", all within the meanings ascribed by ERISA. The present value of all benefits under such Plan do not exceed, as of the last annual valuation date, the value of the assets of such Plan allocable to such vested benefits. (i) Investment Company Act; Public Utility Holding Company. The Borrower is not an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. Neither the Borrower nor any Affiliate is a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended. (j) Regulation U; Business Loans. The Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or 12 carrying margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System. The Note evidences business loans exempt from the federal Truth In Lending Act (15 USC 1601, et seq.), the Federal Reserve Lender's Regulation Z (12 CFR 226, et seq.), and the proceeds thereof are not being used for consumer purposes. (k) Environmental Matters. The Borrower has duly complied in all material respects with, and its business, operations, assets, equipment, property, leaseholds, or other facilities are in compliance in all material respects with, the provisions of all federal, state, and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations promulgated thereunder, including Environmental Laws. The Borrower has been issued and will maintain all required federal, state, and local permits, licenses, certificates, and approvals relating to (1) air emissions, (2) discharges to surface water or ground water, (3) noise emissions, (4) solid or liquid waste disposal, (5) use, generation, storage, transportation, or disposal of Hazardous Materials, or (6) other environmental, health or safety matters. The Borrower has received no notice of, and knows of no, facts which might constitute any violations of any federal, state, or local environmental, health or safety laws, codes or ordinances, and any rules or regulations promulgated thereunder with respect to its business, operations, assets, equipment, property, leaseholds, or other facilities, materially adversely affecting the existing or future operations or financial condition of the Borrower. To the best of Borrower's knowledge, there has been no emission, spill, release, or discharge by Borrower materially adversely affecting the existing or future operations or financial condition of the Borrower into or upon (1) the air, (2) soils or any improvements located thereon, (3) surface water or ground water, or (4) the sewer, septic system or waste treatment, storage or disposal system servicing owned facilities or any leased premises, of any Hazardous Materials at or from the premises. There has been no complaint, order, directive, claim, citation, or notice by any governmental authority or any person or entity materially adversely affecting the existing or future operations or financial condition of the Borrower with respect to (1) air emissions, (2) spills, releases, or discharges to soils or improvements located thereon, surface water, ground water or the sewer, septic or waste treatment, storage or disposal systems servicing the premises, (3) noise emissions, (4) solid or liquid waste disposal, (5) the use, generation, storage, transportation or disposal of Hazardous Materials, or (6) other environmental, health, or safety matters affecting the Borrower. (l) Compliance with Law. The Borrower maintains such licenses, permits, patents, copyrights, trademarks, and consents of appropriate governmental agencies to own its properties as are necessary or useful to carry on its business and is in compliance in all material respects with applicable laws and regulations. All tax returns or reports of the Borrower required by law have been filed, or will be timely filed before penalties attach, and all taxes, assessments, contributions, fees and other governmental charges (other than those presently payable without penalty or interest and those currently being contested in good faith and against which adequate reserves have been established) upon the Borrower or its assets, properties or income, which are payable, have been paid. (m) Casualty. Neither the business nor the properties of the Borrower is presently affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, 13 storm, hail, earthquake, embargo, act of God or other casualty materially adversely affecting the existing or future operations or financial condition of the Borrower. (n) Trust Representations. The Borrower represents and warrants that to the best of its knowledge, the securitization projections attached hereto as Exhibit "H" are accurate and correct with data and assumptions based upon the reflection of the contractual terms of the loans held by each Trust, actual gross loss and recovery experience, prepayment experience and the capitalization of the Trusts which the Borrower believes will be representative of future experience. The projections accurately reflect the terms and provisions of each Trust, and there has been no adverse change in the Trust or such securitization projections. The Borrower is in compliance with all of its material obligations to each Trust, including those under each sale and servicing agreement, and there is no condition or event which, with the lapse of time, or the giving of notice, or both, would cause a default in such agreements. The Borrower has not engaged and will not engage in any transaction with the Trust except as contemplated by the existing documentation with respect to the Trusts. SECTION 5. AFFIRMATIVE COVENANTS OF THE BORROWER. Until all obligations of the Borrower under this Agreement and under the Note are paid in full, the Borrower agrees that it will strictly observe the following covenants, unless at any time the Lender shall otherwise expressly consent in writing: (a) Corporate Existence. The Borrower will preserve its corporate existence without any material amendments to its Certificate of Incorporation and will maintain its existing fiscal year and accounting policies in accordance with GAAP. (b) Reports, Certificates and Other Information. The Borrower will furnish to the Lender: (i) Financial Purchase Agreement Information. The Borrower will provide all financial statements and information required to be provided by the Borrower under Article VI of the Securities Purchase Agreement. The Borrower shall also furnish on a monthly basis, within thirty (30) days after the end of each month, copies of consolidated and consolidating unaudited balance sheet and statement of income and retained earnings, for such month for the portion of the fiscal year ended as of the end of such month for the Borrower and each Subsidiary, setting forth, at least quarterly, in comparative form the corresponding figures for the corresponding dates and periods of the preceding fiscal year. Such monthly financial statements shall calculate the financial covenants set forth in Section 5(j) hereof. (ii) Financial Projections. The Borrower shall provide to the Lender on a weekly basis, cash flow projections for the following four week period showing the projected cash flow for such period on a daily basis. Such cash flow projections shall be furnished no later than Monday of each week beginning June 30, 1997, and shall forecast the four week consecutive period following such week. 14 (iii) SEC and Other Reports. Promptly upon their becoming available a copy of each registration statement or prospectus filed by the Borrower with any state securities commission or similar authority or with the Securities and Exchange Commission and copies of each periodic report or proxy statement filed with the Securities and Exchange Commission pursuant to the requirements of the Securities Exchange Act of 1934 in the event Borrower ever makes such filings or becomes subject to such requirements. (iv) Orders. Prompt notice of any orders in any material proceedings to which the Borrower is a party, issued by any court or regulatory agency, federal or state, and if the Lender should so request, copies of any such order. (v) Officers' Certificates. Contemporaneously with the furnishing of each weekly financial statements provided for in Section 5(b)(ii), a currently dated Officer's Certificate. (vi) Notice of Default or Litigation. Immediately upon learning of the occurrence of a Default, an Event of Default or the institution of, or any adverse determination in, any litigation, arbitration proceeding or governmental proceeding which is material to the Borrower or the occurrence of any event which could have a material adverse effect upon the Borrower written notice thereof describing the same and the steps being taken with respect thereto. (vii) Securitization Notices. Within five (5) Banking Days after receipt, copies of any correspondence or other notifications from Greenwich Capital Corporation or any rating agency that relates to the Trusts or any contemplated securitizations by the Borrower. (viii) Trust Information. Within thirty (30) days after the end of each month, copies of the static pool analysis, expected loss analysis, compliance reports and financial projections based upon actual losses, prepayments and recoveries provided to the Trusts. Within 5 Banking Days before funding, a summary of cash settlements expected to be received from any Trust. (d) Books, Records, Inspections and Audits. The Borrower will maintain complete and accurate books and records; permit the Lender to inspect and audit said books and records at all reasonable times and permit the Lender to inspect the properties and operations of the Borrower. Such inspection and audit shall be made at the Borrower's expense. (e) Taxes and Liabilities. The Borrower will pay when due all taxes, assessments and other liabilities except such as are being contested in good faith and by appropriate proceedings and for which appropriate reserves have been established. (f) Compliance with Legal and Regulatory Requirements. The Borrower will comply in all material respects with the applicable provisions of all federal and state statutes and regulations and any court orders or orders of regulatory authorities issued thereunder. 15 (g) Employee Benefit Plans. The Borrower will maintain any pension or profit sharing Plan or other employee benefit Plan, if any, in compliance in all material respects with ERISA, the Internal Revenue Code, and all rules and regulations of regulatory authorities pursuant thereto and file all material reports required to be filed pursuant to ERISA, the Internal Revenue Code, and such rules and regulations. (h) Payment of Expenses. The Borrower shall pay all reasonable costs at closing incidental to the preparation of this Agreement, the Loan Documents and the Loan, including, but not limited to, attorneys' fees and other legal and documentation expenses, appraisal fees and costs, environmental consultant charges, insurance premiums, lien search charges, inspecting engineers' and/or architects' fees, and any and all other incidental expenses of the Lender. (i) Hazardous Materials. The Borrower shall keep its property and any leased premises free of all Hazardous Materials except for the use of such materials in the ordinary course of business in compliance with all laws and regulations. (j) Financial Covenants. The Borrower shall maintain the following minimum operating levels during the time period specified, all of which shall be calculated on a consolidated basis with the Parent Corporation: (i) Minimum Net Worth. A minimum net worth of at least Fifty Million Dollars ($50,000,000) shall be maintained as of the end of each fiscal quarter. (ii) Leverage Ratio. The ratio derived by dividing the total liabilities exclusive of subordinated debt by Net Worth shall not exceed 2.50 to 1.00 as of the end of each fiscal quarter. Subordinated debt for purposes of this section shall mean debt in which the holder thereof is subject to the subordination in payment to the Borrower's secured lenders. SECTION 6. NEGATIVE COVENANTS OF THE BORROWER. Until all obligations of the Borrower under the Loan Documents are paid in full, and any obligation of the Lender to make further Advances has expired, the Borrower agrees that it will strictly observe the following covenants unless at any time the Lender shall otherwise expressly consent in writing: (a) Restricted Payments. Borrower will not purchase or redeem any shares of the capital stock of the Borrower, declare or pay any dividends thereon, make any distribution to shareholders, or set aside any funds for any such purpose, or prepay, purchase or redeem any other subordinated indebtedness of the Borrower. The Borrower will not make any advances to its officers for salaries, fees, bonuses or similar expenses until such amounts have been earned and become properly due and payable. (b) Liens. The Borrower will not create or permit to exist any Liens with respect to any property or assets, now owned or hereafter acquired, except the following permitted encumbrances ("Permitted Encumbrances"): 16 (i) Those Liens created pursuant to any Debt incurred by the Borrower or the Parent Corporation permitted in Section 6(h) hereof; (ii) any Lien or deposit with any governmental agency required to qualify the Borrower or to conduct business or exercise any privilege, franchise or license, or to maintain self-insurance or to obtain the benefits of or secure obligations under any law pertaining to workmen's compensation, unemployment insurance, old age pensions, social security or similar matters, or any similar lien or deposit arising in the ordinary course of business; (iii) any landlord's, mechanic's, workmen's, repairmen's, carrier's, warehousemen's or other like Liens arising in the ordinary course of business for amounts not yet due, provided adequate provision has been made for the payment of the same when due, or deposits to obtain the release of such Liens have been made or if a Lien is being contested by the Borrower in good faith and by appropriate legal proceedings, and provided the Borrower has provided appropriate reserves for the payment of any such contested Lien; (iv) Liens for taxes and governmental charges not yet due and for the payment of which when due adequate provision has been, or which are being contested in good faith by appropriate legal proceedings and for which adequate reserves are provided; (v) Liens created by or resulting from any litigation or legal proceeding which is being contested in good faith by appropriate legal proceedings and for which adequate reserves are provided; (vi) those specific Liens now in existence and listed in Exhibit "G"; (vii) purchase money security interest Liens incurred by the Borrower or any Subsidiary in the ordinary course of business for the purchase of fixed assets; and (viii) the interest, if any, in distributions from Autorics II to the Borrower granted to First Financial Acceptance, Inc., pursuant to the synthetic automobile receivable participation agreement dated December 18, 1996; provided, however, any such interest is limited to payment obligations to First Financial Acceptance, Inc., resulting from "Joint Receivables" as defined in such Participation Agreement and the Borrower represents and warrants that Joint Receivables do not presently exceed Eleven Million Fifty Thousand Dollars ($11,050,000) and for future securitizations shall not exceed six percent (6%) of the loans provided to Trusts. (c) Guaranties, Loans or Advances; Investments. Except for debt permitted in Section 6(h) hereof, the Borrower shall not make or permit to exist any loans or advances, other than loans and other extensions of credit or credit accommodations to customers or vendors other than Affiliates, made by the Borrower in the ordinary course of its business as now conducted, for reasonable salary advances to non-executive employees and other advances to agents and employees for anticipated expenses to be incurred on behalf of the Borrower in the course of discharging their assigned duties. The Borrower will not be a guarantor or surety of, or otherwise be responsible in any manner (whether by agreement to purchase any obligations, stock, assets, goods or services, or to supply or advance any funds, assets, goods or services, or otherwise) with 17 respect to any undertaking of any other Person. The Borrower or the Parent Corporation will not purchase or acquire any securities of, or make investments in, any Person except as permitted in Section 8.3 of the Securities Purchase Agreement. (d) Capitalization and Sales. The Borrower will not sell, transfer, convey or lease all or any material part of its assets (more than 10% being deemed material) or sell or assign with or without recourse any receivables other than in the ordinary course of business pursuant to warehouse lines of credit and securitizations. The Borrower will not (i) permit any change in the Parent Corporation's ownership of the shares of any class of Borrower's stock, (ii) incur, sell or otherwise dispose of any shares of its capital stock or other securities, or rights, warrants or options to purchase or acquire any such shares of securities, or (iii) sell, transfer or encumber any stock of its Subsidiaries. (e) Margin Stock. The Borrower will not use or cause or permit the proceeds of the Loan to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended from time to time. (f) Other Agreements. The Borrower will not enter into any agreement containing any provision which would be violated or breached by the performance of its obligations hereunder or under any instrument or document delivered or to be delivered by it hereunder or in connection herewith. (g) Judgments. The Borrower will not permit any material judgment or monetary penalty rendered against it in any judicial or administrative proceeding to remain unsatisfied for a period in excess of thirty (30) days unless such judgment or penalty is being contested in good faith and by appropriate proceedings and unless an appropriate reserve has been established with respect thereto. (h) Debt. The Borrower or the Parent Corporation will not incur indebtedness for borrowed money other than indebtedness incurred pursuant to this Agreement, whether under a loan, purchase money security interest, or sale and lease back arrangement, or for the acquisition of fixed assets, except for warehouse lines of credit or permanent financing with respect thereto obtained by the Borrower in the ordinary course of business consistent with past practice. (i) Name Change. The Borrower shall not fail to notify the Lender of any change in the Borrower's name or any name Borrower begins to do business under or name it assumes within thirty (30) days after the date of such change. (j) Agreements with Affiliates. The Borrower or the Parent Corporation shall not enter into any other contract or transaction with any Affiliate, and, with respect to any agreements with any Affiliate presently in existence, shall not amend or modify such agreements without prior written consent of Lender (which shall be given or withheld within five (5) Banking Days of written request) which shall not be unreasonably withheld. 18 (k) Fixed Assets. The Borrower or the Parent Corporation will not make any capital expenditures, purchase fixed assets or enter into any capital or operating leases, except as permitted in Section 8.8 of the Securities Purchase Agreement. (l) Trust Payments. The Borrower shall not make any payments to fund, secure or otherwise pay repurchase obligations, reserves or losses or any other payment to any Trust, except as required by the terms thereof. The Borrower shall not consent to the amendment to the terms of any agreement to which Borrower is a party relating to any Trust or securitization, except for the termination of Trust 1997A in connection with its transfer of assets and roll over into a new securitization trust prior to July 1, 1997. SECTION 7. CONDITIONS OF LENDING. The obligation of the Lender to make each Advance under the Loan is subject to the following conditions precedent: (a) No Default. No Event of Default, or Default, shall have occurred and be continuing, and the representations and warranties of the Borrower contained in Article V of the Securities Purchase Agreement or in Section 4 hereof shall be true and correct as of the date of each Advance, except that the representations contained in Section 4(d) will be construed so as to refer to the latest financial statements furnished to the Lender by the Borrower pursuant to the requirements of this Agreement. (b) Documents to be Furnished at Initial Closing. The Lender shall have received contemporaneously with the execution of this Agreement, the following, each duly executed, dated the date of this Agreement and in form and substance satisfactory to the Lender: (i) Loan Documents. The Loan Documents. (ii) Resolutions. A certified copy of a Resolution of the Board of Directors of the Borrower authorizing the execution, delivery and performance of each of the Loan Documents and any other documents provided for in this Agreement. (iii) Certification of Incumbency and Signatures. The certificates of the Secretary of the Borrower certifying the names of the officer or officers of the Borrower authorized to sign the various Loan Documents, together with a sample of the true signature of each such person. (iv) Corporate Documents. A certified copy of the Certificate of Incorporation of the Borrower and Autorics II, a Certificate of Existence or good standing 19 issued for Borrower and Autorics II in each state where qualification is necessary and copies of the By-Laws of the Borrower certified as complete and correct by its Secretary. (v) Opinion of Counsel for the Parent Corporation, Borrower and Autorics II. The opinion of counsel for the Autorics II, Borrower and the Parent Corporation acceptable to the Lender. (vi) Amendment to 9% Subordinated Convertible Debentures. The First Amendment to 9% Subordinated Convertible Debenture dated April 23, 1996, amending the 9% Subordinated Convertible Debenture issued to Beneficial Standard Life Insurance Company in the amount of $5,000,000 and the First Amendment to 9% Subordinated Convertible Debenture dated April 23, 1996, amending the 9% Subordinated Convertible Debenture issued to Great American Reserve Insurance Company in the amount of $5,000,000, both payable by the Parent Corporation. (vii) Amendment to Warrants. The First Amendment to Warrant to Purchase Common Stock amending the Warrant to Purchase Common Stock of NAL Financial Group, Inc. dated April 23, 1996 issued to Conseco, Inc. for 500,000 shares, subject to adjustment, and the First Amendment to Warrant to Purchase Common Stock amending the Warrant to Purchase Common Stock of NAL Financial Group, Inc. dated April 23, 1996 issued to Conseco, Inc. for 15,000 shares, subject to adjustment. (viii) Price Protection Waiver. All other parties shall waive their price protection rights with respect to their warrants, and their subordinated debt (including any Affiliates of Lender), resulting from the indebtedness and warrants provided for in this Credit Agreement. (ix) Subordinated Debt Extension. All subordinated notes held by the subordinated creditors listed on Exhibit "I" attached hereto which mature prior to December 31, 1997, shall have their maturity extended until December 31, 1997. (x) Trust Payments. Evidence acceptable to Lender that Autorics II has transferred its rights to receive 74% of payments from the Trusts to the Borrower and the irrevocable instructions by the Borrower to the Trusts directing payments to the account referenced in Section 2(a)(i)(D) with an acknowledgment by the Trusts. SECTION 8. EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default under this Agreement: (a) Nonpayment of the Loan. Default in the payment of principal or interest under the terms of the Note or Loan Documents when due. (b) Nonpayment of Other Indebtedness for Borrowed Money. Default in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any other indebtedness for borrowed money of, or guaranteed by, the Borrower, Parent Corporation or any Subsidiary whether owed to the Lender or any other Person, or 20 default in the performance or observance of any obligation or condition with respect to any such other indebtedness in excess of $500,000 if the effect of such default would entitle the holder thereof to accelerate the maturity of any such indebtedness or to permit the holder or holders thereof, or any trustee or agent for such holders, to cause such indebtedness to become due and payable prior to its expressed maturity. (c) Other Material Obligations. Subject to the expiration of any applicable grace period, default in the payment when due, or in the performance or observance of, any material obligation of, or condition agreed to by the Borrower, Parent Corporation or any Subsidiary with respect to any material purchase or lease of goods or services except only to the extent that the existence of any such default is being contested by the Borrower or any Subsidiary in good faith and by appropriate proceedings. (d) Bankruptcy, Insolvency, etc. The Borrower, Parent Corporation or any Subsidiary becoming insolvent or admitting in writing its inability to pay its debts as they mature or the adjudication of the Borrower, Parent Corporation or any Subsidiary as a 21 bankrupt or as insolvent; or the Borrower, Parent Corporation or any Subsidiary applying for, consenting to, or acquiescing in the appointment of, a trustee or receiver for the Borrower, Parent Corporation or any Subsidiary or any material amount of the property of the Borrower or any Subsidiary, or the Borrower, Parent Corporation or any Subsidiary making a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee or receiver being appointed for the Borrower, Parent Corporation or any Subsidiary or for a material part of the property thereof and not being discharged within 30 days; or any bankruptcy, reorganization, debt arrangement, or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding being instituted by or against the Borrower, Parent Corporation or any Subsidiary, and if instituted against the Borrower, Parent Corporation or any Subsidiary, being consented to or acquiesced in by the Borrower, Parent Corporation or any Subsidiary or remaining for 30 days undismissed. (e) ERISA Plan. A "reportable event" (as defined under ERISA) occurs that would permit the Pension Benefit Guaranty Corporation to terminate any Plan of the Borrower or Affiliate of the Borrower. (f) Failure of the Borrower to Observe Covenants. Failure of the Borrower to observe any of the covenants stated in Section 6 of this Agreement. (g) Non-Compliance with other Provisions of this Agreement or Other Loan Documents. Failure by the Borrower to comply with or to perform (i) any other provision of this Agreement (which failure does not constitute an Event of Default under any of the preceding provisions of this Section 8) or (ii) any covenant or other provision of any other Loan Document, and continuance of any such failure listed in (i) or (ii) above for ten (10) Banking Days after notice thereof to the Borrower from the Lender. (h) Warranties. Any warranty or representation made by the Borrower in this Agreement or in any other Loan Document or in the Securities Purchase Agreement proving to have been false or misleading in any material respect when made, or any schedule, certificate, financial statement, report, notice, or other writing furnished by the Borrower to the Lender proving to have been false or misleading in any material respect when made or delivered. (i) Default Under Securities Purchase Agreement. If there is any "Event of Default" under and as defined in the Securities Purchase Agreement. (j) Default Under Trusts. If there is any material default or noncompliance under the Trusts, any Trust fails or is unable to meet its payment obligations to its noteholders or certificateholders, or the transfer or termination of any service, administrative or other agreement between the Borrower, or its Subsidiaries, and the Trust. If Autorics II transfers, sells or creates, incurs, assumes or permits to exist any Lien upon or with respect to its rights to receive payment from the Trust, including the right to receive certain excess reserve balances and dealer reserve balances and residual distributions, or its beneficial ownership interest in the Trust, except for dividend or other transfers to the Borrower. 22 SECTION 9. EFFECT OF EVENT OF DEFAULT. If any Event of Default described in Section 8(d) shall occur, repayment of the Loan shall immediately be accelerated and the Note and the Loan evidenced thereby, and all other Obligations of the Borrower to the Lender, shall become immediately due and payable, all without notice of any kind. In the case of any other Event of Default described in Section 8, the Lender or any other holder of the Note may accelerate payment of the Note and declare the Note, and all other Obligations of the Borrower to the Lender (if the Lender is then the holder of the Note which is accelerated), due and payable, whereupon repayment of such Note, and all other Obligations of the Borrower to the Lender (if the Lender is then the holder of the Note), shall become immediately due and payable, all without further notice of any kind. The Lender or any such other holder shall promptly advise the Borrower of any such declaration, but failure to do so shall not impair the effect of such declaration. SECTION 10. WAIVER; AMENDMENTS. No delay on the part of the Lender in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude any other or further exercise thereof, or the exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent with respect to any of the provisions of this Agreement or the Note shall be effective unless in writing and signed by the Lender. SECTION 11. NOTICES. Any notice hereunder to the Borrower or the Lender shall be in writing (including facsimiles) and, if delivered by facsimile or hand shall be deemed to have been given when delivered to the recipient's facsimile number or address, respectively, listed below, and if mailed, shall be deemed to have been given three days after the date when sent by registered or certified mail, postage prepaid, and addressed to the Borrower or the Lender at their respective addresses shown below. The address and facsimile numbers listed below, for purposes of this Section, may by written notice to the other party to this Agreement, be changed from time to time as its address or facsimile for such purpose. If either party provides notice by facsimile, it shall promptly supply the recipient with an original of such written notice via hand delivery or by registered or certified mail. The addresses and facsimile numbers referred to are as follows: As to the Lender: Mr. Michael Bonnet Conseco, Inc. 745 Fifth Avenue, Suite 2700 New York, New York 10151 Fax: 212-980-6122 With a copies to: Mr. Christopher D. Long Henderson, Daily, Withrow & DeVoe 2600 One Indiana Square Indianapolis, Indiana 46204 Fax: 317-639-0191 and Mr. Richard R. Dykhouse 23 Conseco, Inc. 11825 North Pennsylvania Street Carmel, Indiana 46032 Fax: 317-817-3578 As to the Borrower: Ms. Mercedes Padin General Counsel NAL Acceptance Corporation 500 Cypress Creek Road, West, Suite 590 Ft. Lauderdale, Florida 33309 Fax: 954-489-0694 With a copy to: Ms. Judith Keiser English, McCaughan & O'Bryan, P.A. First Fort Lauderdale Place 100 N.E. Third Avenue, Suite 1100 Ft. Lauderdale, Florida 33301-1146 Fax: 954-763-2439 SECTION 12. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay or reimburse the Lender on demand for all reasonable out-of-pocket costs and expenses of the Lender (including reasonable attorneys' fees and legal expenses) incurred by the Lender in connection with the enforcement of this Agreement or any of the other Loan Documents. In addition, the Borrower agrees to pay, and to save the Lender harmless from all liability for any stamp or similar documentary or transaction taxes, or any intangibles tax, which may be payable in connection with the execution or delivery of this Agreement, the borrowings hereunder, or the issuance of the Note or of any other Loan Documents. All obligations provided for in this Section shall survive any termination of this Agreement. SECTION 13. CAPTIONS. Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement. SECTION 14. GOVERNING LAW AND VENUE. This Agreement and all of the other Loan Documents shall be construed as contracts made under and governed by the laws of the State of Florida. All obligations of the Borrower and the rights of the Lender expressed herein or any of the other Loan Documents shall be in addition to and not in limitation of those provided by applicable law. Borrower hereby irrevocably submits to the jurisdiction of an Indiana State or Federal court sitting in Marion County or Hamilton County, Indiana, in any action or proceeding arising out of or relating to this Agreement or the Loan Documents, hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such Indiana State court or, to the extent permitted by law, in such Federal court. Borrower hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. Borrower irrevocably consents to the service of any and all process in any action or proceeding by the delivery of copies of such process to Borrower at the address set forth in Section 11 of this Agreement. 24 Borrower 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. Nothing in this Section shall affect the right of any party to service legal process in any other manner permitted by law or affect the right of any party to bring any action or proceeding against any other party or its property in the courts of other jurisdictions. SECTION 15. NO JOINT VENTURE. Notwithstanding anything to the contrary herein contained or implied, the Lender, by this Agreement, or by any action pursuant hereto, shall not be deemed to be a partner of, or a joint venturer with, the Borrower. SECTION 16. SEVERABILITY. In the event any provision of this Agreement or any of the Loan Documents shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not affect the validity, enforceability or legality of the remaining provisions hereof or thereof, all of which shall continue unaffected and unimpaired thereby. SECTION 17. INDEMNIFICATION. Borrower covenants and agrees, at it sole cost and expense, to indemnify, protect and save the Lender harmless against and from any and all losses, claims, costs, damages, liabilities and expenses, including, without limitation, all expenses of litigation or preparation therefore (a "Loss"), of any kind or of any nature whatsoever (including, without limitation, attorneys' and experts' fees and disbursements) which may at any time be imposed upon, incurred by or asserted or awarded against the Lender and arising from or out of any Hazardous Materials on, in, under, released from Borrower's property in violation of any applicable Environmental Law or affecting all or any portion of Borrower's property, or the enforcement of this Agreement or the assertion by the Borrower of any defense to its obligations hereunder, whether any of such matters arise before or after the foreclosure of any Liens or the taking of title to all or any portion of the collateral by the Lender. The Borrower shall further pay the Lender's expenses incurred in connection with the cost of removal of any and all Hazardous Materials from all or any portion of Borrower's Property and the additional costs required to take necessary precautions to protect against the release of Hazardous Materials on, in, or under such property, and the costs incurred to comply with Environmental Laws in connection with all or any portion of such property. The indemnity set forth herein shall be in addition to any other obligations of the Borrower to the Lender hereunder or at common law or otherwise, and shall survive any termination of this Agreement, the expiration of this Agreement and the payment of all obligations thereunder. Payments by the Borrower under this Section 17 shall not reduce any other obligations. SECTION 18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the Borrower and the Lender and their respective successors and assigns, and shall inure to the benefit of the Borrower and the Lender and the respective successors and assigns of the Lender. This Agreement and the Loan Documents are assignable by the Lender at any time. SECTION 19. JURY WAIVER. The Lender and the Borrower after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waive any right either of them may have to a trial by jury in any litigation based upon or arising out of this Agreement or any other Loan Document or any course of conduct, dealing, statements 25 (whether oral or written), or actions of either of them. Neither the Lender nor the Borrower shall seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action which a jury trial cannot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by either the Lender or the Borrower except by a written instrument executed by both of them. SECTION 20. COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same document. This Agreement and all Loan Documents may be executed by facsimile signatures. [the remainder of this page intentionally left blank] 26 Executed and delivered at ___________________________ on June 23, 1997. CONSECO PRIVATE CAPITAL GROUP, INC. NAL ACCEPTANCE CORPORATION By: /s/ Ngaire E. Cuneo By: /s/ Robert R. Bartolini ---------------------------- ------------------------------- Ngaire E. Cuneo Robert R. Bartolini President Chief Executive Officer 27 EX-4.22 5 FIRST AMENDMENT TO CREDIT AGREEMENT FIRST AMENDMENT TO CREDIT AGREEMENT This First Amendment to Credit Agreement (the "First Amendment") is entered into by and between NAL ACCEPTANCE CORPORATION, a Florida corporation (the "Borrower"), and CONSECO PRIVATE CAPITAL GROUP, INC., an Indiana corporation (the "Lender"). Recitals A. Borrower and Lender are parties to a Credit Agreement dated June 23, 1997 (the "Credit Agreement"). B. The Borrower is facing a material liquidity issue, and desires immediate short term financing from the Lender by increasing the amount of the Loan under the Credit Agreement. C. The Lender desires to make such additional loan, provided that certain features of the convertible debentures of Borrower's Parent Corporation be modified in order for Lender, or its affiliates, to consider ownership in the Parent Corporation without being subject to market fluctuations, all as more specifically provided hereinafter. D. The terms used in this First Amendment with their initial letters capitalized and which are not defined herein shall have the meanings ascribed to them in the Credit Agreement. Amendment NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants contained herein, and each act done pursuant thereto, the parties hereby agree as follows: 1. The following definitions hereby supersede and replace the corresponding definitions set forth in Section 1(b) of the Credit Agreement, as follows: "Loan" means, collectively, unless the context otherwise requires, the Original Loan in the amount of $5,000,000 advanced by the Lender to the Borrower pursuant to Section 2(a)(i) hereof and the Working Capital Loan in an amount not to exceed $5,000,000 advanced by Lender to Borrower pursuant to Section 2(a)(ii) hereof. "Maturity" with respect to the Original Loan means the earlier of (i) December 31, 1997, (ii) the date of an Equity Infusion (other than by Lender or its Affiliates), or (iii) upon a Change in Control of the Parent Corporation; at which time all Advances under the Original Loan shall be due and payable; and with respect to the Working Capital Loan means October 1, 1997. "Note" means, collectively, the promissory notes evidencing the Loan as used in Section 2(a)(i)(C) and Section 2(a)(ii)(C), and any other promissory note made by Borrower payable to Lender as may be outstanding from time to time." 2. The following definition is hereby added to and included in Section 1(b) of the Credit Agreement in alphabetical order within such section: ""Filing Approval" means the expiration of the waiting period under the Hart-Scott-Rodino Act with respect to a filing made by Conseco, Inc. concerning its acquisition of control of the Parent Corporation. "Original Loan" means the Loan in the amount of $5,000,000 advanced by the Lender to the Borrower pursuant to Section 2(a)(i) hereof. "Working Capital Loan" shall be the loan advanced to Borrower by Lender pursuant to Section 2(a)(ii) hereof." 3. Section 2(a)(ii) is hereby added to the Credit Agreement as follows: "(ii) Working Capital Loan. From the date of the First Amendment and until the close of business on the date of the Filing Approval, the Lender will make Advances in addition to the Original Loan from time to time to the Borrower, in amounts not exceeding the aggregate principal amount at any time outstanding of Five Million Dollars ($5,000,000), upon the terms and conditions hereinafter stated. The making of the Advances shall be subject to the further provisions of this Section 2, provided that Advances under the working Capital Loan shall not be subject to the conditions of lending stated in Section 7 and the Officer's Certificate may be subject to Events of Default caused by the financial condition of the Borrower. Each Advance shall be on the terms and subject to the conditions hereinafter stated. After the Filing Approval, the Lender shall not be required to make any further Advances under the Working Capital Loan. (A) Interest. The Working Capital Loan shall bear the rate of interest on the Loan set forth in Section 2(a)(i)(A) of this Credit Agreement. After maturity, whether by acceleration or upon Maturity as hereinafter provided, until paid in full, or when and so long as there shall exist any uncured Default, the Working Capital Loan shall bear interest at a rate equal to three percent (3%) per annum of the otherwise applicable rate (calculated on the basis that an entire year's interest is earned in 360 days). Interest shall be due and payable at Maturity on October 1, 1997. 2 (B) Maturity. The Working Capital Loan and all accrued interest thereon shall be payable in full immediately upon Maturity on October 1, 1997. (C) Method of Borrowing. The obligations of the Borrower to repay the Working Capital Loan shall be evidenced by a promissory note attached as Exhibit "C-1" and made a part hereof. The principal amount of the Working Capital Loan outstanding from time to time shall be determined by reference to the books and records of the Lender and all payments by Borrower on account of the Working Capital Loan shall be recorded. Such books and records shall be deemed prima facie to be correct as to such matters absent manifest error. The principal may be prepaid in part or in whole without premium or penalty, provided that such prepayments shall not be re-advanced by Lender. (D) Use of Proceeds. The Advances under the Working Capital Loan may only be used by the Borrower to pay working capital expenditures necessary to maintain the operations of the Borrower in the normal course of business, such as payroll expenses, taxes, rent, payments to repossession contractors and utilities, and any other expenses must be approved by the Lender. The Borrower shall provide the Lender with such reports requested by Lender showing the use of Advances." 4. The Borrower is herewith entering into the Note in the form attached hereto as Exhibit "C-1". 5. The following Section 2(f) is hereby added to the Credit Agreement immediately following Section 2(e) therein: "(f) Extensions of Loan. If the Filing Approval is obtained prior to the Maturity of the Working Capital Loan, then the Lender may, in its sole discretion and at the request of the Borrower, extend the Maturity of the Original Loan and/or the Working Capital Loan for one or more successive periods of six (6) months each, provided that any such extension must be evidenced by a writing executed on behalf of the Lender. Any such extensions shall be conditioned upon the Borrower having delivered to the Lender on or prior to the applicable Maturity a new promissory note acceptable to the Lender to replace the Existing Note, and any other documents requested by the Lender. Reference is made to that certain Investment Agreement by and between Conseco, Inc., and the Parent Corporation of even date herewith, and the Lender agrees to the renewal obligations in paragraph 4 therein, subject to the terms and conditions of such Agreement." 6. This First Amendment and the making of the Working Capital Loan is conditioned upon the amendment to the 9% Subordinated Convertible Debenture issued to Beneficial Standard Life Insurance Company in the amount of $5,000,000 and the amendment to 3 the 9% Subordinated Convertible Debenture dated April 23, 1996, issued to Great American Reserve Insurance Company in the amount of $5,000,000, both payable by the Parent Corporation, to provide that the conversion price therein is equal to Thirty-Two Cents (32(cent)) per share effective upon the Filing Approval. In addition, the Parent Corporation shall agree to set the conversion price at Thirty-Two Cents (32(cent)) per share with respect to convertible debentures currently held by Merrill Lynch World Income Fund, Inc., and Merrill Lynch Convertible Fund, Inc., and Thirty Cents (30(cent)) per share for all other convertible debentures as may be acquired by the Lender or its Affiliates from other convertible debenture holders, all as shown on Exhibit "I-1" attached hereto, upon such acquisition and the Filing Approval. The Parent Corporation and its Board of Directors shall consent to the transfer of such debentures to the Lender or its Affiliates and any exercise of the conversion rights therein, and the parties shall promptly file and cooperate in any Hart-Scott Rodino filing deemed necessary by the Lender. The foregoing shall be agreed to by the Parent Corporation pursuant to the Investment Agreement. 7. The Borrower represents and warrants that to the best of its knowledge, the projections attached hereto as Exhibit "H-1" are accurate and were prepared on the basis of assumptions, data, information, tests or other conditions believed to be valid and accurate. 8. The Working Capital Loan shall be secured by the Loan Documents which shall remain unamended and in full force and effect. This First Amendment shall not act to release, diminish or in any manner whatsoever, adversely affect the Lender's security interest in, to or against any property of the Borrower created by the Loan Documents, and shall be construed so as to sustain the validity of such security interest. Except as expressly herein provided, the Credit Agreement and this First Amendment shall be interpreted wherever possible in a manner consistent with one another, but in the event of any irreconcilable inconsistency, this First Amendment shall control. 9. The Borrower shall pay all costs incidental to this First Amendment, including, but not limited to, attorneys' fees and other legal and documentation expenses, and any and all other incidental expenses of the Lender in connection with the amendment of the Credit Agreement as provided herein. 10. This First Amendment is subject to the Lender receiving contemporaneously (except as indicated below) with the execution of this First Amendment, the following, each duly executed, dated the date of this First Amendment and in form and substance satisfactory to Lender: (a) A certified copy of the resolutions of the Board of Directors of the Borrower and the Parent Corporation, authorizing the execution, delivery and performance of this First Amendment and the transactions contemplated thereby to be furnished by noon August 25, 1997; (b) Opinion of counsel to the Borrower and Parent Corporation acceptable to Lender to be furnished by noon August 25, 1997; 4 (c) The Note evidencing the Working Capital Loan; and (d) The Investment Agreement required in paragraph 6 of this Agreement. 11. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same document. This Agreement and all corresponding Loan Documents may be executed by facsimile signatures. 5 IN WITNESS WHEREOF, the parties have caused this First Amendment to be duly executed on their behalf all as of the day and year first above written. NAL ACCEPTANCE CORPORATION By: ------------------------------------ Printed: ------------------------------- Title: --------------------------------- CONSECO PRIVATE CAPITAL GROUP, INC. By: ------------------------------------ Ngaire E. Cuneo, President 6 EXHIBIT "C-1" EXHIBIT "I-1" List of Other Convertible Debentureholders
DEBENTURE ISSUE DATE LENDER AMOUNT CONVERSION PRICE - ------------ -------------- ------------------- ---------- ---------------- Subordinated Sept. 12, 1996 Merrill Lynch World $2,750,000 32' Convertible Income Fund, Inc. Debenture Subordinated Sept. 12, 1996 Merrill Lynch $2,250,000 32' Convertible Convertible Fund, Inc. Debenture 9% Convertible Nov. 30, 1995 Westminster Capital, Inc. $1,250,000 30' Subordinated (Belzburg) Debenture 9% Convertible Jan. 29, 1996 Michael Karp $2,500,000 30' Subordinated Debenture 9% Convertible July 14, 1995 Florence Karp C/F $1,000,000 30' Subordinated Penelope & Athena Karp Debenture (assigned to Michael Karp) 9% Convertible July 28, 1995 Florence Karp C/F $1,000,000 30' Subordinated Penelope & Athena Karp Debenture (assigned to Michael Karp) 9% Convertible Aug. 22, 1995 Florence Karp C/F $1,000,000 30' Subordinated Penelope & Athena Karp Debenture (assigned to Michael Karp)
EX-4.23 6 SECOND AMENDMENT TO CREDIT AGREEMENT SECOND AMENDMENT TO CREDIT AGREEMENT This Second Amendment to Credit Agreement (the "Second Amendment") is entered into by and between NAL ACCEPTANCE CORPORATION, a Florida corporation (the "Borrower"), and CONSECO PRIVATE CAPITAL GROUP, INC., an Indiana corporation (the "Lender") as of the 1st day of October, 1997. Recitals A. Borrower and Lender are parties to a Credit Agreement dated June 23, 1997, as amended by that certain First Amendment to Credit Agreement dated August 21, 1997 (as amended, the "Credit Agreement"). B. Parties desire to extend the Maturity of the Original Loan and Working Capital Loan until April 1, 1998, all as more specifically provided hereinafter. C. The terms used in this Second Amendment with their initial letters capitalized and which are not defined herein shall have the meanings ascribed to them in the Credit Agreement. Amendment NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants contained herein, and each act done pursuant thereto, the parties hereby agree as follows: 1. The following definition hereby supersedes and replaces the corresponding definition set forth in Section 1(b) of the Credit Agreement, as follows: "Maturity" with respect to the Original Loan and the Working Capital Loan means April 1, 1998. 2. The Borrower is herewith entering into the First Replacement Promissory Note (Original Loan) and the First Replacement Promissory Note (Working Capital Loan), in the forms attached hereto as Replacement Exhibit "C" and Replacement Exhibit "C-1", respectively, to evidence the Original Loan and Working Capital Loan with the new Maturity as defined in Section 1 of this Second Amendment, and to supersede and replace such Exhibits to the Credit Agreement. 3. This Second Amendment shall not act to release, diminish or in any manner whatsoever, adversely affect the Lender's security interest in, to or against any property of the Borrower created by the Loan Documents, and shall be construed so as to sustain the validity of such security interest. Except as expressly herein provided, the Credit Agreement and this Second Amendment shall be interpreted wherever possible in a manner consistent with one another, but in the event of any irreconcilable inconsistency, this Second Amendment shall control. 4. The Borrower shall pay all costs incidental to this Second Amendment, including, but not limited to, attorneys' fees and other legal and documentation expenses, and any and all other incidental expenses of the Lender in connection with the amendment of the Credit Agreement as provided herein. 5. This Second Amendment is subject to the Lender receiving contemporaneously with the execution of this Second Amendment, the following, each duly executed, dated the date of this Second Amendment and in form and substance satisfactory to Lender: (a) A certified copy of the resolutions of the Board of Directors of the Borrower authorizing the execution, delivery and performance of this Second Amendment; and (b) The Replacement Note evidencing the Original Loan and Working Capital Loan. 6. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same document. This Agreement and all corresponding Loan Documents may be executed by facsimile signatures. IN WITNESS WHEREOF, the parties have caused this Second Amendment to be duly executed on their behalf all as of the day and year first above written. NAL ACCEPTANCE CORPORATION By: /s/ Robert R. Bartolini ------------------------------------ Printed: Robert R. Bartolini ------------------------------- Title: Chief Executive Officer --------------------------------- CONSECO PRIVATE CAPITAL GROUP, INC. By: /s/ Rollin M. Dick ------------------------------- Printed: Rollin M. Dick -------------------------- Title: Exec. Vice Pres. & CFO ---------------------------- REPLACEMENT EXHIBIT "C" FIRST REPLACEMENT PROMISSORY NOTE (Original Loan) $5,000,000.00 Indianapolis, Indiana Date: October 1, 1997 On or before Maturity, NAL ACCEPTANCE CORPORATION, a Florida corporation (the "Maker"), promises to pay to the order of CONSECO PRIVATE CAPITAL GROUP, INC., an Indiana corporation (the "Payee"), at 11825 Pennsylvania Street, Carmel, Indiana, 46032, the outstanding principal sum of Five Million Dollars ($5,000,000.00) or so much of the principal amount of the Loan represented by this Note as may be disbursed and outstanding by the Payee under the terms of the Credit Agreement described below, and to pay interest on the unpaid principal balance outstanding from time to time until Maturity, as herein provided. This Note evidences indebtedness incurred or to be incurred by the Maker under a loan extended to the Maker by the Payee under a Credit Agreement dated June 23, 1997, as amended by that First Amendment to Credit Agreement dated August 21, 1997, and the Second Amendment to Credit Agreement of even date herewith (as the same may be amended from time to time, the "Credit Agreement") between Maker and Payee, which loan is referred to in the Credit Agreement as the "Original Loan". All capitalized and designated terms in this Note shall have the meanings ascribed to them in the Credit Agreement. The principal amount of the Loan outstanding from time to time shall be determined by reference to the books and records of the Payee on which all Advances under the Loan and all payments by the Maker on account of the Loan shall be recorded. Such books and records shall be deemed prima facie to be correct as to such matters absent manifest error. Interest on the unpaid portion of the principal balance of the Loan outstanding from time to time, until maturity, whether by acceleration or otherwise, will accrue at the LIBOR Rate, as provided in the Credit Agreement; provided, however, interest may accrue in certain circumstances at the per annum rate equal to the Base Rate, as provided in the Credit Agreement. After maturity, whether by acceleration or otherwise, interest on the unpaid principal balance of the Loan will accrue at Three Percent (3%) per annum above the otherwise applicable rate. Interest on the outstanding balance under this Note will be compounded monthly on the first day of each month commencing with July 1, 1997, and continuing on the first day of each consecutive month thereafter and at Maturity. Accrued interest will be due and payable quarterly commencing on September 30, 1997, and at the end of each fiscal quarter thereafter and at Maturity. The entire principal balance of this Note shall be due and payable together with accrued interest at Maturity. Principal may be prepaid only as provided in the Credit Agreement and any such voluntary prepayment shall be applied first to accrued interest and then to principal installments in their inverse order of maturity. Principal shall also be prepaid as provided in Section 2(a)(i)(D) of the Credit Agreement. Receipt of a check or other item of payment in itself shall not constitute payment. A payment by check and other item of payment shall, for the purpose of determining the outstanding principal balance and calculating interest, be credited (conditional upon final collection) after allowing one (1) Banking Day for collection. Acceptance by the Payee of any payment which is less than full payment of the amount due and owing or which is not in immediately available funds shall not constitute a waiver of the Payee's right to receive payment in full at such or at any other time in immediately available funds. All amounts payable under the terms of this Note shall be payable with attorneys' fees and without notice or protest. This Note is issued pursuant to, is entitled to the benefit of, and is subject to the provisions of the Credit Agreement, to which reference is made hereby for, among other things, the definition of certain proper nouns used herein, procedures to determine and requirements for interest and principal payments and prepayments, for a statement of any security for the indebtedness evidenced hereby, procedures for making Advances and for a statement of provisions for acceleration of the maturity hereof upon the happening of certain stated events. The rights and remedies provided in this Note and the Credit Agreement are cumulative, are in addition to any other right or remedy of Payee, and may be exercised successively, concurrently or alternatively. Failure to exercise any such right or remedy shall not operate as a waiver thereof. The Maker and any endorsers or guarantors severally waive demand, presentment for payment and notice of nonpayment of this Note, and each of them consents to any renewals or extensions of the time of payment hereof without notice. If more than one party shall execute this Note, the term Maker as used herein shall mean all parties signing this Note and each of them, and all such parties, shall be the jointly and severally obligated and liable hereunder. If any payment is not paid when due, or if default occurs under the Credit Agreement or the Loan Documents, after any applicable grace period set forth in the Credit Agreement or the Loan Documents, the holder may, at its option, after the giving of any notice and the lapse of any period of grace afforded to Maker thereunder declare the principal balance of this Note and all accrued interest immediately due and payable, irrespective of the maturity date specified herein, with interest thereon from the date of such default at the default rate specified herein, all without relief from valuation or appraisement laws. 2 This Note is made under and will be governed by the laws of the State of Florida. The Payee and the Maker, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waive any right either of them may have to a trial by jury in any litigation based upon or arising out of this Note, the Credit Agreement, the Loan Documents, or any related instrument or agreement or any of the transactions contemplated by this Note or any course of conduct, dealing, statements (whether oral or written), or actions of either of them. Neither the Payee nor the Maker shall seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by either the Payee or the Maker except by a written instrument executed by both of them. This Note supersedes and replaces that certain Promissory Note dated June 23, 1997, from Maker to Payee in the original principal amount of Five Million Dollars ($5,000,000) Notice of acceptance of this Note in replacement thereof is hereby waived. IN WITNESS WHEREOF, Maker has executed this Note at __________________, __________________ as of the date first hereinabove written. NAL ACCEPTANCE CORPORATION By: ------------------------------- Printed: -------------------------- Title: ---------------------------- 3 REPLACEMENT EXHIBIT "C-1" FIRST REPLACEMENT PROMISSORY NOTE (Working Capital Loan) $5,000,000 Indianapolis, Indiana Date: October 1, 1997 On or before Maturity, NAL ACCEPTANCE CORPORATION, a Florida corporation (the "Maker"), promises to pay to the order of CONSECO PRIVATE CAPITAL GROUP, INC., an Indiana corporation (the "Payee"), at 11825 Pennsylvania Street, Carmel, Indiana, 46032, the outstanding principal sum of Five Million Dollars ($5,000,000) or so much of the principal amount of the Working Capital Loan represented by this Note as may be disbursed and outstanding by the Payee under the terms of the Credit Agreement described below, and to pay interest on the unpaid principal balance outstanding from time to time until Maturity, as herein provided. This Note evidences indebtedness incurred or to be incurred by the Maker under a loan extended to the Maker by the Payee under a Credit Agreement dated June 23, 1997, as amended by that certain First Amendment to Credit Agreement dated August 21, 1997, and the Second Amendment to Credit Agreement of even date herewith (as the same may be amended from time to time, the "Credit Agreement") between Maker and Payee, which loan is referred to in the Credit Agreement as the "Working Capital Loan". All capitalized and designated terms in this Note shall have the meanings ascribed to them in the Credit Agreement. The principal amount of the Working Capital Loan outstanding from time to time shall be determined by reference to the books and records of the Payee on which all Advances under the Working Capital Loan and all payments by the Maker on account of the Working Capital Loan shall be recorded. Such books and records shall be deemed prima facie to be correct as to such matters absent manifest error. Interest on the unpaid portion of the principal balance of the Working Capital Loan outstanding from time to time, until maturity, whether by acceleration or otherwise, will accrue at the LIBOR Rate, as provided in the Credit Agreement; provided, however, interest may accrue in certain circumstances at the per annum rate equal to the Base Rate, as provided in the Credit Agreement. After maturity, whether by acceleration or otherwise, interest on the unpaid principal balance of the Working Capital Loan will accrue at Three Percent (3%) per annum above the otherwise applicable rate. Interest on the outstanding balance under this Note will be compounded monthly on the first day of each month commencing with September 1, 1997, and continuing on the first day of each consecutive month thereafter and upon Maturity. Accrued interest will be due and payable quarterly commencing on September 30, 1997, and at the end of each fiscal quarter, if any, thereafter and upon Maturity. The entire principal balance of this Note shall be due and payable together with accrued interest at Maturity. Receipt of a check or other item of payment in itself shall not constitute payment. A payment by check and other item of payment shall, for the purpose of determining the outstanding principal balance and calculating interest, be credited (conditional upon final collection) after allowing one (1) Banking Day for collection. Acceptance by the Payee of any payment which is less than full payment of the amount due and owing or which is not in immediately available funds shall not constitute a waiver of the Payee's right to receive payment in full at such or at any other time in immediately available funds. All amounts payable under the terms of this Note shall be payable with attorneys' fees and without notice or protest. This Note is issued pursuant to, is entitled to the benefit of, and is subject to the provisions of the Credit Agreement, to which reference is made hereby for, among other things, the definition of certain proper nouns used herein, procedures to determine and requirements for interest and principal payments and prepayments, and for a statement of any security for the indebtedness evidenced hereby. The Working Capital Loan evidenced hereby constitutes a portion of the "Loan" as defined in the Credit Agreement, payment of which is secured by the Loan Documents. The rights and remedies provided in this Note and the Credit Agreement are cumulative, are in addition to any other right or remedy of Payee, and may be exercised successively, concurrently or alternatively. Failure to exercise any such right or remedy shall not operate as a waiver thereof. The Maker and any endorsers or guarantors severally waive demand, presentment for payment and notice of nonpayment of this Note, and each of them consents to any renewals or extensions of the time of payment hereof without notice. If more than one party shall execute this Note, the term Maker as used herein shall mean all parties signing this Note and each of them, and all such parties shall be jointly and severally obligated and liable hereunder. If any payment is not paid when due, or if default occurs under the Credit Agreement or the Loan Documents occurs and is continuing after any applicable grace period set forth in the Credit Agreement or the Loan Documents, the holder may, at its option, declare the principal balance of this Note and all accrued interest immediately due and payable, with interest thereon from the date of such default at the default rate specified herein, all without relief from valuation or appraisement laws. This Note is made under and will be governed by the laws of the State of Florida. The Payee and the Maker, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waive any right either of them may have to a trial by jury in any litigation based upon or arising out of this Note, the Credit Agreement, the Loan Documents, or any related instrument or agreement or any of the transactions contemplated by this Note or any course of conduct, dealing, statements (whether oral or written), or actions of either of them. Neither the Payee nor the Maker shall seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by either the Payee or the Maker except by a written instrument executed by both of them. 2 This Note supersedes and replaces that certain Promissory Note dated August 21, 1997 from Maker to Payee in the original principal amount of Five Million Dollars ($5,000,000). Notice of acceptance of this Note in replacement thereof is hereby waived. IN WITNESS WHEREOF, Maker has executed this Note at __________________, __________________ as of the date first hereinabove written. NAL ACCEPTANCE CORPORATION By: ------------------------------- Printed: -------------------------- Title: ---------------------------- 3 EX-4.24 7 REGISTRATION RIGHTS AGREEMENT AMENDMENT TO REGISTRATION RIGHTS AGREEMENT This AMENDMENT TO REGISTRATION RIGHTS AGREEMENT (this "Amendment") made and entered into as of this 1st day of October, 1997 by and among NAL FINANCIAL GROUP INC., a Delaware corporation (the "Company"), BENEFICIAL STANDARD LIFE INSURANCE COMPANY ("BSLIC"), GREAT AMERICAN RESERVE INSURANCE COMPANY ("GARCO") and CIHC, INC. ("CONSECO"), amends that certain Registration Rights Agreement, dated April 23, 1996, by and among the Company, BSLIC and GARCO (the "Registration Rights Agreement"). WHEREAS, the Company has created a class of authorized Preferred Stock, $.01 par value, of the Company designated "Series A Preferred Stock," the shares of which have voting powers, preferences and other specials rights as more fully set forth in the Certificate of Designation of Series A Preferred Stock of NAL Financial Group Inc., of even date herewith (the "Certificate of Designation"); WHEREAS, the shares of Series A Preferred Stock (the "Series A Shares") are convertible into shares of the Company's Common Stock in accordance with the provisions of the Certificate of Designation; WHEREAS, the holders of the Series A Shares may elect, in accordance with the provisions of the Certificate of Designation, to receive dividend payments thereon in the form of shares of the Company's Common Stock; and WHEREAS, the parties hereto desire to amend the Registration Rights Agreement to add the holder of the Series A Shares as a Holder and to provide that any shares of Common Stock received by such Holder upon either the conversion of Series A Shares or as a dividend payment on Series A Shares shall be subject to registration rights identical to those afforded Registrable Securities (as such term is defined in the Registration Rights Agreement) in the Registration Rights Agreement. NOW, THEREFORE, for and in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the parties hereto agree as follows: 1. The definition of the term "Common Stock" set forth in the Registration Rights Agreement is hereby amended and restated in its entirety to read as follows: "Common Stock" means any outstanding shares of Common Stock of the Company, as well as any shares of Common Stock of the Company issuable either (i) upon the conversion of the Debentures or Series A Shares, or (ii) as a dividend payment on the Series A Shares. 2. The definition of the term "Holders" set forth in the Registration Rights Agreement is hereby amended and restated in its entirety to read as follows: "Holders" means CIHC, Incorporated for so long as (and to the extent that) they own any Registrable Securities, and each of their successors, assigns, and direct and indirect transferees who become registered owners of Registrable Securities or securities exercisable, exchangeable or convertible into Registrable Securities. 3. The definition of the term "Registrable Security(ies)" set forth in the Registration Rights Agreement is hereby amended and restated in its entirety to read as follows: "Registrable Security(ies)" means all or any portions of any shares of Common Stock or other equity securities of the Company that may be issued upon the conversion of, or as a dividend payment on, the Series A Shares, or upon the conversion of, or in exchange for, the Debentures, and any additional shares of Common Stock or other equity securities of the Company issued or issuable after the date hereof in respect of any such securities (or other equity securities issued in respect thereof) by way of a stock dividend or stock split, in connection with a combination, exchange, reorganization, recapitalization or reclassification of Company securities, or pursuant to a merger, division, consolidation or other similar business transaction or combination involving the Company; provided that: as to any particular Registrable Securities, such securities shall cease to constitute Registrable Securities (i) when a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of thereunder, or (ii) when and to the extent such securities are permitted to be distributed pursuant to Rule 144 (or any successor provision to such Rule) under the Securities Act or are otherwise freely transferable to the public without further registration under the Securities Act and are not subject to any limitations on the amount of sales under Rule 144 or (iii) when such securities shall have ceased to be Outstanding and, in the case of clause (ii), the Company shall, if requested by the Holder or Holders thereof, have delivered to such Holder or Holders the written opinion of independent counsel to the Company to such effect. Any time this Agreement requires the vote or consent of the Holders of a "majority" or other stated percentage of the Registrable Securities, the term Registrable Securities shall, solely for purposes of calculating such vote, be deemed to include only the Registrable Securities then issuable under the Debentures, the Series A Preferred Shares, and any other securities exercisable or exchangeable for, or convertible into, Registrable Securities. 4. A definition of the term "Series A Shares" shall be added to Article 1 of the Registration Rights Agreement to read as follows: "Series A Shares" means shares of the Company's preferred stock designated as "Series A Preferred Stock," which have voting powers, preferences and other specials rights as more fully set forth in the Certificate of Designation of Series A Preferred Stock of NAL Financial Group Inc., dated as of October 1, 1997. 2 5. The notice address for Stephen M. Cohen, Esquire set forth in Article 10(d) of the Registration Rights Agreement is hereby amended to read as follows: Stephen M. Cohen, Esquire Buchanan Ingersoll Professional Corporation Eleven Penn Center, 14th Floor 1835 Market Street Philadelphia, PA 19103 6. The Notice Schedule attached to the Registration Rights Agreement is hereby amended as set forth on Exhibit A attached hereto. 7. Except as otherwise provided herein, the terms of the Registration Rights Agreement shall remain in full force and effect. 3 IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have executed this Amendment as of the date first written above. NAL FINANCIAL GROUP INC. By: /s/ Robert R. Bartolini --------------------------------------- Name: Robert R. Bartolini -------------------------------- Title: Chairman & CEO -------------------------------- GREAT AMERICAN RESERVE INSURANCE COMPANY By: /s/ Donald F. Gangaware --------------------------------------- Name: Donald F. Gangaware -------------------------------- Title: President ------------------------------- BENEFICIAL STANDARD LIFE INSURANCE COMPANY By: /s/ Rollin M. Dick ----------------------------------------- Name: Rollin M. Dick ---------------------------------- Title: Executive Vice President and Chief Financial Officer ---------------------------------- CIHC, INCORPORATED By: /s/ David A. Hill ----------------------------------------- Name: David A. Hill ---------------------------------- Title: Vice President --------------------------------- 4 EXHIBIT A NOTICE SCHEDULE: 5 EX-4.25 8 RIGHTS OF SECURITY HOLDERS "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY THE HOLDER IN CONNECTION WITH A CREDIT AGREEMENT DATED JUNE 23, 1997 BY AND BETWEEN NAL ACCEPTANCE CORPORATION AND CONSECO PRIVATE CAPITAL GROUP, INC., AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION, OR THE AVAILABILITY OF EXEMPTION FROM REGISTRATION, UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BASED ON AN OPINION LETTER OF COUNSEL SATISFACTORY TO THE COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION." WARRANT TO PURCHASE COMMON STOCK OF NAL FINANCIAL GROUP INC. Void after June 23, 2002 WHEREAS, Conseco, Inc. ("Conseco" or "Holder") has arranged for Conseco Private Capital Group, Inc. to provide $5,000,000 of financing to NAL Acceptance Corporation, a wholly-owned subsidiary of NAL Financial Group Inc., a Delaware corporation (the "Company") pursuant to the terms of a Credit Agreement, as of the date hereof, by and among Conseco Private Capital Group, Inc. and NAL Acceptance Corporation. WHEREAS, for value received, Conseco, is entitled, subject to the terms set forth below, to purchase from the Company, shares of the Common Stock of the Company (the "Shares"), as constituted on the date hereof (the "Warrant Issue Date"), with the Notice of Exercise attached hereto duly executed, and simultaneous payment therefor in lawful money of the United States, at the Exercise Price as set forth in Section 2 below. The number, character and Exercise Price of the shares are subject to adjustment as provided below. 1. Term of Warrant. This Warrant shall be exercisable, in whole or in part, during the term commencing on the Warrant Issue Date and ending at 5:00 p.m. on June 23, 2002, and shall be void thereafter. 2. Exercise Price and Number of Shares. 2.1 Exercise Price. The Exercise Price at which this Warrant may be exercised shall be $.15 per share of common stock, as adjusted pursuant to Section 11 hereof. 2.2 Number of Shares. The number of shares of the Company's Common Stock, $.15 par value per share ("Common Stock") which may be purchased pursuant to this Warrant shall be 257,000 shares, as adjusted pursuant to Section 11 hereof. 3. Exercise of Warrant. (a) The purchase rights represented by this Warrant are exercisable by the Holder in whole or in part, at any time, or from time to time, by the surrender of this Warrant and the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder, at 1 the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company), upon payment in cash or by check acceptable to the Company. (b) This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above, and the person entitled to receive the shares of Common Stock issuable upon such exercise shall be treated for all purposes as the holder of record of such shares as of the close of business on such date. As promptly as practicable on or after such date and in any event within ten (10) days thereafter, the Company at its expense shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of shares issuable upon such exercise. In the event that this Warrant is exercised in part, the Company at its expense will execute and deliver a new Warrant of like tenor exercisable for the number of shares for which this Warrant may then be exercised. 4. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction. 5. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount. 6. Rights of Stockholders. Subject to Sections 9 and 11 of this Warrant and the provisions of any other written agreement between the Company and the Holder, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised as provided herein. 7. Transfer of Warrant. 7.1. Exchange of Warrant Upon a Transfer. On surrender of this Warrant for exchange, properly endorsed, the Company at its expense shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on 2 payment by the Holder of any applicable transfer taxes) may direct, of the number of shares issuable upon exercise hereof. 7.2. Compliance with Securities Laws; Restrictions on Transfers. (a) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the Shares to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of applicable federal and state securities laws. Upon exercise of this Warrant, the Holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the shares of Common Stock so purchased are being acquired solely for the Holder's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale. (b) Neither this Warrant nor any share of Common Stock issued upon exercise of this Warrant may be offered for sale or sold, or otherwise transferred or sold in any transaction which would constitute a sale thereof within the meaning of the Securities Act of 1933, as amended (the "1933 Act"), unless (i) such security has been registered for sale under the 1933 Act and registered or qualified under applicable state securities laws relating to the offer an sale of securities, or (ii) exemptions from the registration requirements of the 1933 Act and the registration or qualification requirements of all such state securities laws are available and the Company shall have received an opinion of counsel satisfactory to the Company that the proposed sale or other disposition of such securities may be effected without registration under the 1933 Act and would not result in any violation of any applicable state securities laws relating to the registration or qualification of securities for sale, such counsel and such opinion to be satisfactory to the Company. (c) All Shares issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form (in addition to any legend required by state securities laws). "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY THE HOLDER IN CONNECTION WITH A CREDIT AGREEMENT DATED JUNE 23, 1997 BY AND BETWEEN NAL ACCEPTANCE CORPORATION AND CONSECO PRIVATE CAPITAL GROUP, INC., AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION, OR THE AVAILABILITY OF EXEMPTION FROM REGISTRATION, UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BASED ON AN OPINION LETTER OF COUNSEL SATISFACTORY TO THE COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION." Holder recognizes that investing in the Warrant and the Common Stock involves a high degree of risk, and Holder is in a financial position to hold the Warrant and the Common Stock indefinitely and is able to bear the economic risk and withstand a complete loss of its investment in the Warrant and the Common Stock. The Holder is a sophisticated investor and is capable of evaluating the merits and risks of investing in the Company. The Holder has had an opportunity 3 to discuss the Company's business, management and financial affairs with the Company's management, has been given full and complete access to information concerning the Company, and has utilized such access to its satisfaction for the purpose of obtaining information or verifying information and have had the opportunity to inspect the Company's operation. Holder has had the opportunity to ask questions of, and receive answers from the management of the Company (and any person acting on its behalf) concerning the Warrant and the Common Stock and the agreements and transactions contemplated hereby, and to obtain any additional information as Holder may have requested in making its investment decision. The Holder is an "accredited investor", as defined by Regulation D promulgated under the Act. 8. Reservation of Stock. The Company covenants that during the term that this Warrant is exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the shares upon the exercise of this Warrant, from time to time, will take all steps necessary to amend its Certificate of Incorporation (the "Certificate") to provide sufficient reserves of shares of Common Stock issuable upon the exercise of the Warrant. The Company further covenants that all shares that may be issued upon the exercise of rights represented by this Warrant, upon exercise of the rights represented by this Warrant and payment of the Exercise Price, all as set forth herein, will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein). The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the shares of Common Stock upon the exercise of this Warrant. 9. Notices. (a) Whenever the Exercise Price or number of shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall issue a certificate signed by its Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and number of shares purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Warrant. (b) All notices, advices and communications under this Warrant shall be deemed to have been given, (i) in the case of personal delivery, on the date of such delivery and (ii) in the case of mailing, on the third business day following the date of such mailing, addressed as follows: If to the Company: NAL Financial Group Inc. 500 Cypress Creek Road West, Suite 590 Ft. Lauderdale, FL 33309 Attention: Mr. Robert R. Bartolini 4 With a Copy to: Stephen M. Cohen, Esquire Buchanan Ingersoll, Professional Corporation Eleven Penn Center 1835 Market Street, 14th Floor Philadelphia, PA 191032985 and to the Holder: at the address of the Holder appearing on the books of the Company or the Company's transfer agent, if any. Either of the Company or the Holder may from time to time change the address to which notices to it are to be mailed hereunder by notice in accordance with the provisions of this Paragraph 9. 10. Amendments. (a) Any term of this Warrant may be amended with the written consent of the Company and the Holder. Any amendment effected in accordance with this Section 10 shall be binding upon the Holder, each future holder and the Company. (b) No waivers of, or exceptions to, any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. 11. Adjustments. The number of Shares of Common Stock purchasable hereunder and the Exercise Price is subject to adjustment from time to time upon the occurrence of certain events, as follows: 11.1. Reorganization, Merger or Sale of Assets. If at any time while this Warrant, or any portion thereof, is outstanding and unexpired there shall be (i) a reorganization (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), (ii) a merger or consolidation of the Company with or into another corporation in which the Company is not the surviving entity, or a reverse triangular merger in which the Company is the surviving entity but the shares of the Company's capital stock outstanding immediately prior to the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (iii) a sale or transfer of substantially all of the Company's properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive upon payment of the Exercise Price then in effect, the number of shares of stock or other securities or 5 property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 11. The foregoing provisions of this Section 11.1 shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. If the per-share consideration payable to the Holder hereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company's Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. 11.2. Reclassification. If the Company, at any time while this Warrant, or any portion thereof, remains outstanding and unexpired, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 11. 11.3. Split, Subdivision or Combination of Shares. If the Company at any time while this Warrant, or any portion thereof, remains outstanding and unexpired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted. 11.4. Adjustments for Dividends in Stock or Other Securities or Property. If while this Warrant, or any portion hereof, remains outstanding and unexpired the holders of the securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible Stockholders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities or property (other than cash) of the Company by way of dividend, then and in each case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or additional stock or other securities or property (other than cash) of the Company that such holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, 6 retained such shares and/or all other additional stock, other securities or property available by this Warrant as aforesaid during such period. 11.5. Cumulative Adjustments for Issuance(s) of Shares. (a) If at any time while this Warrant shall remain outstanding, the Company shall offer and sell Additional Shares of Common Stock (as hereinafter defined) for consideration per share less than the Exercise Price in effect immediately prior to the issuance of such Additional Shares of Common Stock, the Exercise Price in effect immediately prior to each such issuance shall forthwith be adjusted upon such issuance to a price equal to the price paid per share for such Additional Shares of Common Stock; (b) For the purpose of this Section 11.5, the consideration received by the Company for any issue or sale of securities shall, (i) to the extent it consists of cash, be computed at the gross amount of cash received by the Company before deduction of any underwriting or similar commissions, concessions or compensation paid or allowed by the Company in connection with such issue or sale, (ii) to the extent it consists of a service or property other than cash, be computed at the fair value of that service or property as determined in good faith by the Board of Directors; and (iii) if Additional Shares of Common Stock, Convertible Securities (as hereinafter defined), or rights or options to purchase either Additional Shares of Common Stock or Convertible Securities are issued or sold together with other stock or securities or other assets of the Company for a consideration that covers both, be computed as the portion of the consideration so received that may be reasonably determined in good faith by the Board to be allocable to such Additional Shares of Common Stock, Convertible Securities or rights or options. (c) For the purpose of the calculations provided in this Section 11.5, if at any time or from time to time while this Warrant remains outstanding the Company shall issue any rights or options for the purchase of, or stock or other securities convertible into, Additional Shares of Common Stock (such Common Stock or securities being hereinafter referred to as "Convertible Securities"), then, and in each case, if the Effective Price (as hereinafter defined) of such rights, options or Convertible Securities shall be less than the Exercise Price, the Company shall be deemed to have issued at the time of the issuance of such rights or options or Convertible Securities the maximum number of Additional Shares of Common Stock issuable upon exercise or conversion thereof and to have received as consideration for the issuance of such shares an amount equal to the total amount of the consideration, if any, payable to the Company upon exercise or conversion of such options or rights. "Effective Price" shall mean the quotient determined by dividing the total of all of such consideration by such maximum number of Additional Shares of Common Stock. No further adjustment shall be made as a result of the actual issuance of Additional Shares of Common Stock on the exercise of any such rights or options or the conversion of any such Convertible Securities. In the case of Convertible Securities which have a conversion price which is based, in whole or in part, upon a discount to the market price or value of the Common Stock, then for the purposes of calculating the Effective Price, the consideration shall be deemed to include the minimum conversion price payable to the Company. 7 If any such rights or options or the conversion privilege represented by any such Convertible Securities shall expire without having been exercised, the adjustment to the number of shares available hereunder upon the issuance of such rights, options or Convertible Securities shall be readjusted to the number of shares that would have been in effect had an adjustment been made on the basis that the only Additional Shares of Common Stock so issued were the Additional Shares of Common Stock, if any, actually issued or sold on the exercise of such rights or options or rights of conversion of such Convertible Securities, and such Additional Shares of Common Stock, if any, were issued or sold for the consideration actually received by the Company for the granting of all such rights or options, whether or not exercised, plus the consideration received for issuing or selling the Convertible Securities actually converted plus the consideration, if any, actually received by the Company on the conversion of such Convertible Securities. (d) For the purpose of the calculations provided for in this Section 11.5, if at any time or from time to time while this Warrant remains outstanding the Company shall issue any rights or options for the purchase of Convertible Securities, then, in each such case, if the Effective Price thereof is less than the then Exercise Price, the Company shall be deemed to have issued at the time of the issuance of such rights or options the maximum number of Additional Shares of Common Stock issuable upon conversion of the total amount of Convertible Securities covered by such rights or options and to have received as consideration for the issuance of such Additional Shares of Common Stock an amount equal to the amount of consideration, if any, received by the Company for the issuance of such rights or options, plus the consideration, if any, payable to the Company upon the conversion of such Convertible Securities. "Effective Price" shall mean the quotient determined by dividing the total amount of such consideration by such maximum number of Additional Shares of Common Stock. No further adjustment of such Exercise Price adjusted upon the issuance of such rights or options shall be made as a result of the actual issuance of the Convertible Securities upon the exercise of such rights or options or upon the actual issuance of Additional Shares of Common Stock upon the conversion of such Convertible Securities. The provisions of subsection (c) above for readjustment upon the expiration of rights or options or the rights of conversion of Convertible Securities, shall apply mutatis mutandis to the rights, options and Convertible Securities referred to in this subsection (d). (e) The term "Additional Shares of Common Stock" as used herein shall mean all shares of Common Stock issued or deemed issued by the Company, other than (i) the Warrants covered by this Warrant Agreement or otherwise subject to repricing pursuant to the terms of the Credit Agreement; (ii) shares of Common Stock issued upon conversion of convertible securities or the exercise of common stock purchase warrants outstanding as of the Warrant Issue Date; (iii) shares of Common Stock issuable to employees, officers or directors pursuant to the Company's stock option plan; (iv) shares of Common Stock issued or issuable to directors in connection with their service as directors; (v) shares of Common Stock issued or issuable to directors, officers or employees for services rendered or to be rendered pursuant to 8 arrangements approved by the Board of Directors; and (vii) shares of Common Stock issued in connection with a business combination, merger, consolidation, asset acquisition or the acquisition of the business of another corporation (through the purchase of stock or assets) approved by the Board of Directors. 11.6 The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 11 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders of this Warrant against impairment. 12. Registration Rights. The Shares of Common Stock issuable upon the exercise of this Warrant shall be subject to registration and the Holder shall be entitled to the registration rights set forth in that certain Registration Rights Agreement dated April 23, 1996 by and between the Company and such Holder. 13. Severability. Whenever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Warrant in such jurisdiction or affect the validity, legality or enforceability of any provision in any other jurisdiction, but this Warrant shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. 14. Governing Law. The corporate law of the State of Delaware shall govern all issues and questions concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, interpretation and enforceability of this Warrant and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 15. Jurisdiction. The Holder and the Company agree to submit to personal jurisdiction and to waive any objection as to venue in the federal or state courts in the County of Marion, State of Indiana. Service of process on the Company or the Holder in any action arising out of or relating to this Warrant shall be effective if mailed to such party at the address listed in Section 9 hereof. 16. Arbitration. If a dispute arises as to interpretation of this Warrant, it shall be decided finally by three arbitrators in an arbitration proceeding conforming to the Rules of the American Arbitration Association applicable to commercial arbitration. The arbitrators shall be appointed as follows: one by the Company, one by the Holder and the third by the said two arbitrators, or, if they cannot agree, then the third arbitrator shall be appointed by the American Arbitration Association. The third arbitrator shall be chairman of the panel and shall be impartial. The arbitration shall take place in Carmel, Indiana. The decision of a majority of the 9 Arbitrators shall be conclusively binding upon the parties and final, and such decision shall be enforceable as a judgment in any court of competent jurisdiction. Each party shall pay the fees and expenses of the arbitrator appointed by it, its counsel and its witnesses. The parties shall share equally the fees and expenses of the impartial arbitrator. IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized. Dated: June 23, 1997 HOLDER: CONSECO, INC. NAL FINANCIAL GROUP INC. By: /s/ Ngaire E. Cuneo By: /s/ Robert R. Bartolini --------------------------- -------------------------- Ngaire E. Cuneo Robert R. Bartolini Executive Vice President Chief Executive Officer 10 NOTICE OF EXERCISE TO: NAL FINANCIAL GROUP INC. (1) The undersigned hereby elects to purchase _______ shares of Common Stock of NAL FINANCIAL GROUP INC. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full. (2) In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock to be issued upon conversion thereof are being acquired solely for the account of the undersigned and not as a nominee for any other party, and for investment, and that the undersigned will not offer, sell or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws. (3) Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: ----------------------------------- (Name) ----------------------------------- (Name) (4) Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below: ----------------------------------- (Name) - -------------------- ----------------------------------- (Date) (Signature) EX-4.26 9 FIRST AMEND. TO WARRANT TO PURCHASE COMMON STOCK FIRST AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK On April 23, 1996, Conseco, Inc. (the "Holder") and NAL Financial Group, Inc. (the "Company") executed a warrant under which the Company inter alia granted to Holder the right to purchase up to 15,000 shares of common stock of the Company (the "Warrant") subject to adjustment. For good and valuable consideration, receipt of which is acknowledged, Holder and the Company agree to amend the Warrant as follows: 1. Section 2 shall be amended and restated to read as follows: "2. Exercise Price and Number of Shares. 2.1. Exercise Price. The Exercise Price at which this Warrant may be exercised shall be $0.15 per share of common stock, as adjusted pursuant to Section 11 hereof. 2.2. Number of Shares. The number of shares of the Company's Common Stock, $.15 par value per share, ("Common Stock") which may be purchased pursuant to this Warrant shall be 15,000 shares, as adjusted pursuant to Section 11 hereof." 2. In all other respects the Warrant shall continue unamended and in full force and effect. [The remainder of this page intentionally left blank] IN WITNESS WHEREOF the parties have executed this First Amendment to be effective as of June 23, 1997. CONSECO, INC. NAL FINANCIAL GROUP, INC. as Holder as the Company By: /s/ Ngaire E. Cuneo By: /s/ Robert R. Bartolini ------------------------- --------------------------- Ngaire E. Cuneo Robert R. Bartolini Executive Vice President Chief Executive Officer 2 EX-4.27 10 FIRST AMEND. TO WARRANT TO PURCHASE COMMON STOCK FIRST AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK On April 23, 1996, Conseco, Inc. (the "Holder") and NAL Financial Group, Inc. (the "Company") executed a warrant under which the Company inter alia granted to Holder the right to purchase up to 500,000 shares of common stock of the Company (the "Warrant") subject to adjustment. For good and valuable consideration, receipt of which is acknowledged, Holder and the Company agree to amend the Warrant as follows: 1. Section 2 shall be amended and restated to read as follows: "2. Exercise Price and Number of Shares. 2.1. Exercise Price. The Exercise Price at which this Warrant may be exercised shall be $0.15 per share of common stock, as adjusted pursuant to Section 11 hereof. 2.2. Number of Shares. The number of shares of the Company's Common Stock, $.15 par value per share, ("Common Stock") which may be purchased pursuant to this Warrant shall be 500,000 shares, as adjusted pursuant to Section 11 hereof." 2. In all other respects the Warrant shall continue unamended and in full force and effect. [The remainder of this page intentionally left blank] IN WITNESS WHEREOF the parties have executed this First Amendment to be effective as of June 23, 1997 CONSECO, INC. NAL FINANCIAL GROUP, INC. as Holder as the Company By: /s/ Ngaire E. Cuneo By: /s/ Robert R. Bartolini ------------------------- ------------------------------ Ngaire E. Cuneo Robert R. Bartolini Executive Vice President Chief Executive Officer 2 EX-4.28 11 AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK OF NAL FINANCIAL GROUP INC. This AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK (this "Amendment") made and entered into as of this 17th day of September, 1997 by and between NAL FINANCIAL GROUP INC., a Delaware corporation (the "Company"), and BRIDGE ROPE & CO., AS NOMINEE FOR MERRILL LYNCH WORLD INCOME FUND, INC. ("Holder") amends that certain Warrant to Purchase Common Stock of NAL Financial Group Inc., dated September 12, 1996, given by the Company to the Holder (the "Warrant"). WHEREAS, the parties hereto desire to amend the Warrant to fix the Exercise Price at which the Warrant may be exercised. NOW, THEREFORE, for and in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Any capitalized term used but not defined herein shall have the meaning assigned to such term in the Warrant. 2. Section 2.1 of the Warrant is hereby amended and restated in its entirety to read as follows: 2.1 Exercise Price. The Exercise Price at which this Warrant may be exercised shall be $.71875 per share of common stock, as adjusted pursuant to Section 11 hereof. 3. Section 11.5 of the Warrant is hereby deleted in its entirety. 4. Except as otherwise provided herein, the terms and provisions of the Warrant shall remain in full force and effect. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have 1 executed this Amendment as of the date first written above. NAL FINANCIAL GROUP INC. By: /s/ Robert R. Bartolini --------------------------------- Name: Robert R. Bartolini ---------------------------- Title: Chairman and CEO --------------------------- [BRIDGE ROPE & CO., AS NOMINEE FOR] MERRILL LYNCH WORLD INCOME FUND, INC. By: /s/ Daniel Luchansky --------------------------------- Name: Daniel Luchansky ---------------------------- Title: Vice President --------------------------- 2 EX-4.29 12 AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK OF NAL FINANCIAL GROUP INC. This AMENDMENT TO WARRANT TO PURCHASE COMMON STOCK (this "Amendment") made and entered into as of this 17th day of September, 1997 by and between NAL FINANCIAL GROUP INC., a Delaware corporation (the "Company"), and KANE & CO., AS NOMINEE FOR MERRILL LYNCH CONVERTIBLE FUND, INC. ("Holder") amends that certain Warrant to Purchase Common Stock of NAL Financial Group Inc., dated September 12, 1996, given by the Company to the Holder (the "Warrant"). WHEREAS, the parties hereto desire to amend the Warrant to fix the Exercise Price at which the Warrant may be exercised. NOW, THEREFORE, for and in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Any capitalized term used but not defined herein shall have the meaning assigned to such term in the Warrant. 2. Section 2.1 of the Warrant is hereby amended and restated in its entirety to read as follows: 2.1 Exercise Price. The Exercise Price at which this Warrant may be exercised shall be $.71875 per share of common stock, as adjusted pursuant to Section 11 hereof. 3. Section 11.5 of the Warrant is hereby deleted in its entirety. 4. Except as otherwise provided herein, the terms and provisions of the Warrant shall remain in full force and effect. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have 1 executed this Amendment as of the date first written above. NAL FINANCIAL GROUP INC. By: /s/ Robert R. Bartolini --------------------------------- Name: Robert R. Bartolini ---------------------------- Title: Chairman and CEO --------------------------- [KANE & CO., AS NOMINEE FOR] MERRILL LYNCH CONVERTIBLE FUND, INC. By: /s/ Daniel Luchansky --------------------------------- Name: Daniel Luchansky ---------------------------- Title: Vice President --------------------------- 2 EX-4.30 13 AMENDMENT TO SUBORDINATED COVERTIBLE DEBENTURE FIRST AMENDMENT TO 9% SUBORDINATED CONVERTIBLE DEBENTURE DATED APRIL 23, 1996 On April 23, 1996 NAL Financial Group, Inc., a Delaware corporation ("Maker" or the "Company") entered into a convertible debenture in the principal amount of $5,000,000 (the "Debenture") payable to the order of Beneficial Standard Life Insurance Company as lender ("Lender"). For good and valuable consideration, receipt of which is acknowledged, the parties agree to amend the Debenture as follows: 1. Paragraph 1 of the Debenture is hereby superseded and replaced in its entirety with the following: "1. Principal and all unpaid interest which accrues thereon shall be payable in full at the election of Lender upon the earlier of (i) October 23, 1997, or (ii) a Change in Control, as hereinafter defined (hereinafter the "Maturity"). Interest on the outstanding principal balance of this Debenture at the rate of 9% per annum, shall be due and payable on a quarterly basis, on March 31, June 30, September 30 and December 31. Maker may not prepay part or all of the principal due under this Debenture without the consent of Lender. "Change in Control" means the time at which (i) any Person (including a Person's affiliates and associates) or group (as that term is understood under Section 13(d) of the Exchange Act and the rules and regulations thereunder), has become the beneficial owner of a percentage (based on voting power, in the event different classes of stock shall have different voting powers) of the voting stock of the Company equal to at least twenty-five percent (25%), other than existing shareholders which currently own in excess of twenty-five percent (25%) and existing debenture holders whether upon exercise of conversion rights currently existing or otherwise, (ii) there shall be consummated any consolidation or merger of the Company pursuant to which the Company's common stock (or other capital stock) would be converted into cash, securities or other property, other than a merger or consolidation of the Company in which the holders of such common stock (or such other capital stock) immediately prior to the merger have the same proportionate ownership, directly or indirectly, of common stock of the surviving corporation immediately after the merger as they had of the Company's common stock immediately prior to such merger, or (iii) all or substantially all of the Company's assets shall be sold, leased, conveyed or otherwise disposed of as an entirety or substantially as an entirety to any Person in one or a series of transactions." 2. The following language shall be added to paragraph 2 of the Debenture: "The Lender at its option shall be entitled to cause the Company to repay the Debenture at Maturity by paying to Lender the "Equity Value" (as defined below) of the Debenture in lieu of the payment of outstanding principal and interest or the conversion thereof into the Common Stock of the Company. Lender may make this election by delivery of a written request for payment of the Equity Value one day prior to the Maturity date. Upon receipt of such request, the Company shall repay the Debenture by paying to the holder thereof the Equity Value. Equity Value means an amount equal to the market value of the greatest number of shares of common stock into which this Debenture is convertible (assuming conversion of both outstanding principal and interest) on the date of election. The market value of the maximum number of shares of common stock into which the Debenture is convertible shall be determined using the closing bid price of a share of common stock as reported by the Nasdaq system or the closing price of a share of common stock as reported by the principal stock exchange upon which shares of common stock are traded on the date Lender makes its election to receive the Equity Value. If the common stock is not listed for trading on a nationally recognized stock exchange or on the Nasdaq system on such date the market value of a share of common stock shall be determined by reference to the closing bid price of a share of common stock as reported by the Nasdaq/NMS system on June 23, 1997." 3. Paragraph 5 of the Debenture is hereby superseded and replaced in its entirety with the following: "5. An Event of Default under this Debenture means any of the following events (whether the reason for such Event of Default shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) nonpayment of principal or interest when due which nonpayment is unremedied for a period of ten (10) days; (ii) any other material breach of the terms hereof which shall remain unremedied for a period ending on the first to occur of ten (10) days after the Maker shall receive written notice of any such failure from the Lender or fifteen (15) days after the Maker shall become aware thereof; (iii) a material breach of the terms of the Securities Purchase Agreement, the occurrence of a "Triggering Event" (as defined in the Securities Purchase Agreement) or the occurrence of a default under the Securities Purchase Agreement any or each of which remain unremedied after notice and to the extent set forth within Sections 9 or 10 of the Securities Purchase Agreement, whichever is applicable; or (iv) an Event of Default occurs under that certain credit agreement between Conseco Private Capital Group, Inc. and NAL Acceptance Corporation dated June 23, 1997 (the "Credit Agreement")." 2 4. Paragraph 14 of the Debenture is amended and restated to read as follows: "This Debenture is transferable at any time prior to maturity without the consent of Maker, but subject to compliance with all applicable federal and state securities laws." 5. The applicability of paragraph 7.5 of the Debenture is waived with respect to the transaction or transactions required by the Credit Agreement, including the reduction in the exercise price of 515,000 warrants previously issued to Conseco, Inc., and the granting of 257,000 additional warrants to Conseco, Inc., all for the price of $ .15 per share. The foregoing waiver shall be strictly construed to waive the application of such paragraph 7.5 to the foregoing transactions, and shall not constitute a waiver, or as a commitment by the Lender to waive the application thereof, to any other transactions. 6. In all other respects, the Debenture shall remain unamended and in full force and effect. [The remainder of this page intentionally left blank] WITNESS WHEREOF, the parties have executed this amendment to be effective as of June 23, 1997. 3 BENEFICIAL STANDARD LIFE NAL FINANCIAL GROUP INC. INSURANCE COMPANY as the Company as Lender By: By: ------------------------------ ------------------------------------ Robert R. Bartolini Chief Executive Officer 4 EX-4.31 14 SECOND AMENDMENT TO 9% SUBORDINATED CONV. DEBEN. SECOND AMENDMENT TO 9% SUBORDINATED CONVERTIBLE DEBENTURE DATED APRIL 23, 1996 On April 23, 1996, NAL Financial Group Inc., a Delaware corporation ("Maker" or the "Company") entered into a convertible debenture in the principal amount of $5,000,000 (the "Debenture") payable to the order of Beneficial Standard Life Insurance Company as lender ("BSLI"), as amended by that certain First Amendment to 9% Subordinated Convertible Debenture dated June 23, 1997. BSLI has transferred the Debenture to CIHC, Incorporated (the "Lender"). For good and valuable consideration, receipt of which is acknowledged, the parties agree to amend the Debenture as follows: 1. Paragraph 6 of the Debenture is hereby superseded and replaced in its entirety with the following: "6. The unpaid principal of this Debenture is convertible at the option of the Lender, in whole or in part, upon surrender of this Debenture at the principal office of the Company, into restricted shares of the Maker's Common Stock at a fixed conversion price ("Conversion Price") equal to Thirty-Two Cents (32(cent)) per share. Upon such conversion and issuance of the Common Stock, all principal due under this Debenture shall be discharged and the Company released from all obligations hereunder, however, accrued interest shall be paid to the date of conversion. At the option of the Lender, accrued interest may also be subject to conversion in the same manner as principal. The shares of the Company's Common Stock issuable upon the exercise of the conversion feature shall be "restricted securities" as that term is defined under Rule 144 of the 1933 Act and, as a consequence, may not be sold or otherwise transferred except pursuant to registration under the 1933 Act or an available exemption therefrom." 2. Paragraph 7.5 of the Debenture is hereby superseded and replaced in its entirety with the following: "7.5 The Company shall not issue, offer or sell additional shares of Common Stock or any preferred stock, or issue any rights or options for the purchase of, or securities convertible into shares of Common Stock or preferred stock, without the prior written consent of Lender." 3. In all other respects, the Debenture as amended shall remain unamended and in full force and effect. WITNESS WHEREOF, the parties have executed this amendment to be effective as of October 1, 1997. CIHC, INCORPORATED NAL FINANCIAL GROUP INC. as Lender as the Company By: /s/ David A. Hill By: /s/ Robert R. Bartolini ------------------------------ ---------------------------- David A. Hill, Vice President Robert R. Bartolini Chief Executive Officer 2 EX-4.32 15 AMENDMENT TO SUBORDINATED DEBENTURE FIRST AMENDMENT TO 9% SUBORDINATED CONVERTIBLE DEBENTURE DATED APRIL 23, 1996 On April 23, 1996 NAL Financial Group, Inc., a Delaware corporation ("Maker" or the "Company") entered into a convertible debenture in the principal amount of $5,000,000 (the "Debenture") payable to the order of Great America Reserve Insurance Company as lender ("Lender"). For good and valuable consideration, receipt of which is acknowledged, the parties agree to amend the Debenture as follows: 1. Paragraph 1 of the Debenture is hereby superseded and replaced in its entirety with the following: "1. Principal and all unpaid interest which accrues thereon shall be payable in full at the election of Lender upon the earlier of (i) October 23, 1997, or (ii) a Change in Control, as hereinafter defined (hereinafter the "Maturity"). Interest on the outstanding principal balance of this Debenture at the rate of 9% per annum, shall be due and payable on a quarterly basis, on March 31, June 30, September 30 and December 31. Maker may not prepay part or all of the principal due under this Debenture without the consent of Lender. "Change in Control" means the time at which (i) any Person (including a Person's affiliates and associates) or group (as that term is understood under Section 13(d) of the Exchange Act and the rules and regulations thereunder), has become the beneficial owner of a percentage (based on voting power, in the event different classes of stock shall have different voting powers) of the voting stock of the Company equal to at least twenty-five percent (25%), other than existing shareholders which currently own in excess of twenty-five percent (25%) and existing debenture holders whether upon exercise of conversion rights currently existing or otherwise, (ii) there shall be consummated any consolidation or merger of the Company pursuant to which the Company's common stock (or other capital stock) would be converted into cash, securities or other property, other than a merger or consolidation of the Company in which the holders of such common stock (or such other capital stock) immediately prior to the merger have the same proportionate ownership, directly or indirectly, of common stock of the surviving corporation immediately after the merger as they had of the Company's common stock immediately prior to such merger, or (iii) all or substantially all of the Company's assets shall be sold, leased, conveyed or otherwise disposed of as an entirety or substantially as an entirety to any Person in one or a series of transactions." 2. The following language shall be added to paragraph 2 of the Debenture: "The Lender at its option shall be entitled to cause the Company to repay the Debenture at Maturity by paying to Lender the "Equity Value" (as defined below) of the Debenture in lieu of the payment of outstanding principal and interest or the conversion thereof into the Common Stock of the Company. Lender may make this election by delivery of a written request for payment of the Equity Value one day prior to the Maturity date. Upon receipt of such request, the Company shall repay the Debenture by paying to the holder thereof the Equity Value. Equity Value means an amount equal to the market value of the greatest number of shares of common stock into which this Debenture is convertible (assuming conversion of both outstanding principal and interest) on the date of election. The market value of the maximum number of shares of common stock into which the Debenture is convertible shall be determined using the closing bid price of a share of common stock as reported by the Nasdaq system or the closing price of a share of common stock as reported by the principal stock exchange upon which shares of common stock are traded on the date Lender makes its election to receive the Equity Value. If the common stock is not listed for trading on a nationally recognized stock exchange or on the Nasdaq system on such date the market value of a share of common stock shall be determined by reference to the closing bid price of a share of common stock as reported by the Nasdaq/NMS system on June 23, 1997." 3. Paragraph 5 of the Debenture is hereby superseded and replaced in its entirety with the following: "5. An Event of Default under this Debenture means any of the following events (whether the reason for such Event of Default shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) nonpayment of principal or interest when due which nonpayment is unremedied for a period of ten (10) days; (ii) any other material breach of the terms hereof which shall remain unremedied for a period ending on the first to occur of ten (10) days after the Maker shall receive written notice of any such failure from the Lender or fifteen (15) days after the Maker shall become aware thereof; (iii) a material breach of the terms of the Securities Purchase Agreement, the occurrence of a "Triggering Event" (as defined in the Securities Purchase Agreement) or the occurrence of a default under the Securities Purchase Agreement any or each of which remain unremedied after notice and to the extent set forth within Sections 9 or 10 of the Securities Purchase Agreement, whichever is applicable; or (iv) an Event of Default occurs under that certain credit agreement between Conseco Private Capital Group, Inc. and NAL Acceptance Corporation dated June 23, 1997 (the "Credit Agreement")." 2 4. Paragraph 14 of the Debenture is amended and restated to read as follows: "This Debenture is transferable at any time prior to maturity without the consent of Maker, but subject to compliance with all applicable federal and state securities laws." 5. The applicability of paragraph 7.5 of the Debenture is waived with respect to the transaction or transactions required by the Credit Agreement, including the reduction in the exercise price of 515,000 warrants previously issued to Conseco, Inc., and the granting of 257,000 additional warrants to Conseco, Inc., all for the price of $ .15 per share. The foregoing waiver shall be strictly construed to waive the application of such paragraph 7.5 to the foregoing transactions, and shall not constitute a waiver, or as a commitment by the Lender to waive the application thereof, to any other transactions. 6. In all other respects, the Debenture shall remain unamended and in full force and effect. [The remainder of this page intentionally left blank] WITNESS WHEREOF, the parties have executed this amendment to be effective as of June 23, 1997. 3 GREAT AMERICA RESERVE NAL FINANCIAL GROUP INC. INSURANCE COMPANY as the Company as Lender By: By: ------------------------------ ------------------------------------ Robert R. Bartolini Chief Executive Officer 4 EX-4.33 16 SECOND AMENDMENT TO 9% SUBORDINATED CONV. DEBEN. SECOND AMENDMENT TO 9% SUBORDINATED CONVERTIBLE DEBENTURE DATED APRIL 23, 1996 On April 23, 1996, NAL Financial Group Inc., a Delaware corporation ("Maker" or the "Company") entered into a convertible debenture in the principal amount of $5,000,000 (the "Debenture") payable to the order of Great American Reserve Insurance Company as lender ("GARCO"), as amended by that certain First Amendment to 9% Subordinated Convertible Debenture dated June 23, 1997. GARCO has transferred the Debenture to CIHC, Incorporation (the "Lender"). For good and valuable consideration, receipt of which is acknowledged, the parties agree to amend the Debenture as follows: 1. Paragraph 6 of the Debenture is hereby superseded and replaced in its entirety with the following: "6. The unpaid principal of this Debenture is convertible at the option of the Lender, in whole or in part, upon surrender of this Debenture at the principal office of the Company, into restricted shares of the Maker's Common Stock at a fixed conversion price ("Conversion Price") equal to Thirty-Two Cents (32(cent)) per share. Upon such conversion and issuance of the Common Stock, all principal due under this Debenture shall be discharged and the Company released from all obligations hereunder, however, accrued interest shall be paid to the date of conversion. At the option of the Lender, accrued interest may also be subject to conversion in the same manner as principal. The shares of the Company's Common Stock issuable upon the exercise of the conversion feature shall be "restricted securities" as that term is defined under Rule 144 of the 1933 Act and, as a consequence, may not be sold or otherwise transferred except pursuant to registration under the 1933 Act or an available exemption therefrom." 2. Paragraph 7.5 of the Debenture is hereby superseded and replaced in its entirety with the following: "7.5 The Company shall not issue, offer or sell additional shares of Common Stock or any preferred stock, or issue any rights or options for the purchase of, or securities convertible into shares of Common Stock or preferred stock, without the prior written consent of Lender." 3. In all other respects, the Debenture as amended shall remain unamended and in full force and effect. WITNESS WHEREOF, the parties have executed this amendment to be effective as of October 1, 1997. CIHC, INCORPORATED NAL FINANCIAL GROUP INC. as Lender as the Company By: /s/ David A. Hill By: /s/ Robert R. Bartolini ------------------------------ ---------------------------- David A. Hill, Vice President Robert R. Bartolini Chief Executive Officer 2 EX-4.34 17 AMENDMENT TO SUBORDINATED CONVERTIBLE DEBENTURE AMENDMENT TO SUBORDINATED CONVERTIBLE DEBENTURE On September 12, 1996, NAL Financial Group Inc., a Delaware corporation ("Maker" or the "Company") entered into a convertible debenture in the principal amount of $2,750,000 (the "Debenture") payable to the order of Kane & Co. as lender. The Debenture has been transferred to CIHC, Incorporation (the "Lender"). For good and valuable consideration, receipt of which is acknowledged, the parties agree to amend the Debenture as follows: 1. Paragraph 6 of the Debenture is hereby superseded and replaced in its entirety with the following: "6. Conversion Feature. The unpaid principal of this Debenture is convertible at the option of the Lender, in whole or in part, upon surrender of this Debenture at the principal office of the Company, into restricted shares of the Maker's Common Stock at a fixed conversion price ("Conversion Price") equal to Thirty-Two Cents (32(cent)) per share. Upon such conversion and issuance of the Common Stock, all principal due under this Debenture shall be discharged and the Company released from all obligations hereunder, however, accrued interest shall be paid to the date of conversion. At the option of the Lender, accrued interest may also be subject to conversion in the same manner as principal. The shares of the Company's Common Stock issuable upon the exercise of the conversion feature shall be "restricted securities" as that term is defined under Rule 144 of the 1933 Act and, as a consequence, may not be sold or otherwise transferred except pursuant to registration under the 1933 Act or an available exemption therefrom." 2. In all other respects, the Debenture as amended shall remain unamended and in full force and effect. WITNESS WHEREOF, the parties have executed this amendment to be effective as of October 1, 1997. CIHC, INCORPORATED NAL FINANCIAL GROUP INC. as Lender as the Company By: /s/ David A. Hill By: /s/ Robert R. Bartolini ------------------------------ ---------------------------- David A. Hill, Vice President Robert R. Bartolini Chief Executive Officer 2 EX-4.35 18 AMENDMENT TO SUBORDINATED CONVERTIBLE DEBENTURE AMENDMENT TO SUBORDINATED CONVERTIBLE DEBENTURE On September 12, 1996, NAL Financial Group Inc., a Delaware corporation ("Maker" or the "Company") entered into a convertible debenture in the principal amount of $2,250,000 (the "Debenture") payable to the order of Bridge Rope & Co. as lender. The Debenture has been transferred to CIHC, Incorporation (the "Lender"). For good and valuable consideration, receipt of which is acknowledged, the parties agree to amend the Debenture as follows: 1. Paragraph 6 of the Debenture is hereby superseded and replaced in its entirety with the following: "6. Conversion Feature. The unpaid principal of this Debenture is convertible at the option of the Lender, in whole or in part, upon surrender of this Debenture at the principal office of the Company, into restricted shares of the Maker's Common Stock at a fixed conversion price ("Conversion Price") equal to Thirty-Two Cents (32(cent)) per share. Upon such conversion and issuance of the Common Stock, all principal due under this Debenture shall be discharged and the Company released from all obligations hereunder, however, accrued interest shall be paid to the date of conversion. At the option of the Lender, accrued interest may also be subject to conversion in the same manner as principal. The shares of the Company's Common Stock issuable upon the exercise of the conversion feature shall be "restricted securities" as that term is defined under Rule 144 of the 1933 Act and, as a consequence, may not be sold or otherwise transferred except pursuant to registration under the 1933 Act or an available exemption therefrom." 2. In all other respects, the Debenture as amended shall remain unamended and in full force and effect. WITNESS WHEREOF, the parties have executed this amendment to be effective as of October 1, 1997. CIHC, INCORPORATED NAL FINANCIAL GROUP INC. as Lender as the Company By: /s/ David A. Hill By: /s/ Robert R. Bartolini ------------------------------ ---------------------------- David A. Hill, Vice President Robert R. Bartolini Chief Executive Officer 2 -----END PRIVACY-ENHANCED MESSAGE-----