Common use of ESOP Loans Clause in Contracts

ESOP Loans. The Committee may from time to time direct the Trustee to incur debt (an "ESOP Loan") on terms specified by the Committee for the purpose of acquiring Common Stock or for the purpose of repaying all or any portion of any outstanding ESOP Loan, subject to the following: (a) Each ESOP Loan shall be for a specific term. (b) The interest rate with respect to an ESOP Loan may be fixed or variable; provided, however, that in either case such rate shall not be in excess of a reasonable rate of interest taking into account all relevant factors, including the amount and duration of the ESOP Loan, the security and the guarantee, if any, and the credit standing of the Plan and the guarantor, if any. (c) The only Trust assets which may be given as collateral for an ESOP Loan are Common Stock acquired with the loan proceeds, or with the proceeds of any prior ESOP Loan to the extent that such prior ESOP Loan is repaid with the proceeds of the current ESOP Loan. Any such collateral shall be released as provided in Section 6.3. (d) Under the terms of the ESOP Loan, no person entitled to payment thereunder shall have any right to any Plan assets other than (i) collateral, if any, given for the ESOP Loan in accordance with subparagraph (c) above, (ii) Employer contributions (other than contributions of employer securities) that are made to enable the Trust to meet its obligations under the ESOP Loan, and (iii) earnings attributable to such collateral and to the investment of such contributions. (e) Subject to paragraph (d) above, the ESOP Loan shall be without recourse against the Plan. (f) Subject to the use of the proceeds of a new ESOP Loan to refinance (in whole or in part) an existing ESOP Loan, payments during any Plan Year on all outstanding ESOP Loans shall not exceed an amount equal to the sum for all Plan Years of all contributions described in Section 6.2(d)(ii) and earnings on assets of the ESOP, reduced by all prior payments on ESOP Loans during all prior Plan Years. (g) In the event of a default under the ESOP Loan, the value of Plan assets transferred in satisfaction of the ESOP Loan shall not exceed the amount of the default. If the lender is a disqualified person (as defined in Section 4975(e) of the Code) or a party in interest to the Plan (as defined in Section 3(14) of ERISA), the ESOP Loan shall provide for a transfer of Plan assets upon default only upon and to the extent of the failure of the Plan to meet the payment schedule of the ESOP Loan. (h) The Trustee shall maintain adequate records to identify at any time the ESOF shares and shares of Common Stock held under the Trust Fund which were acquired with the proceeds of each ESOP Loan. (i) The Trustee shall have the responsibility to determine whether each ESOP Loan and purchase of Company Stock with the proceeds thereof meet the fiduciary requirements of ERISA.

ESOP Loans. The Committee may from time to time direct the Trustee to incur debt (an "ESOP Loan") on terms specified by the Committee for the purpose of acquiring UICI Common Stock or for the purpose of repaying all or any portion of any outstanding ESOP Loan, subject to the following: (a) Each ESOP Loan shall be for a specific term. (b) The interest rate with respect to an ESOP Loan may be fixed or variable; provided, however, that in either case such rate shall not be in excess of a reasonable rate of interest taking into account all relevant factors, including the amount and duration of the ESOP Loanloan, the security security, and the guarantee, if any, and the credit standing of the Plan and the guarantor, if any. (c) The proceeds of an ESOP Loan shall be used, within a reasonable time after receipt, to acquire UICI Common Stock, or to repay all or any portion of such ESOP Loan or of a prior ESOP Loan. (d) The only Trust Plan assets which may be given as collateral for an ESOP Loan are UICI Common Stock acquired with the loan proceeds, or with the proceeds of any prior ESOP Loan to the extent that such prior ESOP Loan is repaid with the proceeds of the current ESOP Loan. Any such collateral shall be released as provided in Section 6.3subsection 5.3. (de) Under the terms of the ESOP Loan, no person entitled to payment thereunder shall have any right to any Plan assets other than (i) collateral, if any, collateral given for the ESOP Loan in accordance with subparagraph subsection (cd) next above, (ii) Basic Employer contributions (other than contributions of employer securities) that are made to enable the Trust to meet its obligations under the ESOP LoanContributions, and (iii) earnings attributable to such collateral and to the investment of such contributions. (ef) Subject to paragraph (de) next above, the ESOP Loan shall be without recourse against the Plan. (fg) Subject Payments which relate to the use of the proceeds of a new ESOP Loan to refinance (in whole or in part) an existing ESOP Loan, payments during any Plan Year on all outstanding ESOP Loans shall not exceed an amount equal to the sum for all Plan Years of all contributions described in Section 6.2(d)(ii) Basic Employer Contributions, and all earnings on assets of the ESOPcollateral, if any, provided in accordance with paragraph (d) next above, reduced by all prior ESOP Loan payments on ESOP Loans during which relate to all prior Plan Years. (gh) In the event of a default under the ESOP Loan, the value of Plan assets transferred in satisfaction of the ESOP Loan loan shall not exceed the amount of the default. If the lender is a disqualified person (as defined in Section section 4975(e) of the Code) or a party in interest to the Plan (as defined in Section section 3(14) of ERISA), the ESOP Loan shall provide for a transfer of Plan assets upon default only upon and to the extent of the failure of the Plan to meet the payment schedule of the ESOP Loan. (hi) The Trustee shall maintain adequate records to identify at any time the ESOF shares and shares of UICI Common Stock held under the Trust Fund which were acquired with the proceeds of each ESOP Loan. (i) The Trustee shall have the responsibility to determine whether each an ESOP Loan and purchase shall not be subject to a put, call or other option or a buy-sell or similar arrangement either while held by the Plan or when distributed to or on account of Company Stock with the proceeds thereof meet the fiduciary requirements of ERISAa Participant.