FINANCIAL INDUSTRIES CORPORATION
AMENDMENT NO. 2
TO
9% SUBORDINATED SENIOR NOTE DATED JULY 30, 1993
This Amendment No. 2 (this "Second Amendment") dated as of March 18, 2004,
is entered into by and between Financial Industries Corporation (the "Company"),
and Investors Life Insurance Company of North America (the "Payee"). Capitalized
terms used but not defined herein shall have the meaning set forth in the
Subordinated Senior Note (as hereinafter defined).
RECITALS
WHEREAS, Family Life Insurance Investment Company (the "Maker") and the
Payee entered into that certain Subordinated Senior Note dated July 30, 1993 in
the original principal amount of $4,500,000 (the "Subordinated Senior Note");
WHEREAS, the original parties amended the Subordinated Senior Note pursuant
to Amendment No. 1 dated effective as of June 12, 1996;
WHEREAS, the Company assumed the rights and obligations of the Maker under
the Subordinated Senior Note pursuant to that certain Assignment Agreement dated
effective as of December 23, 1998 in accordance with Maker's Plan of
Dissolution;
WHEREAS, the Payee is an indirect, wholly-owned subsidiary of the Company;
and
WHEREAS, the Company and the Payee desire to further amend the Subordinated
Senior Note (i) to better reflect the terms available for borrowing money in the
financial markets and (ii) to reward the Company for its historical performance
in the timely payment of its obligations under the Subordinated Senior Note.
- 1 -
AGREEMENT
NOW, THEREFORE, the parties agree as follows:
A. The Subordinated Senior Note is hereby further amended as follows:
1. The interest rate is hereby reduced to five percent (5%) for the
remainder of the term.
2. The Payment Schedule attached to Amendment No. 1 to the
Subordinated Senior Note is hereby revised in its entirety to
read as set forth on Exhibit A attached hereto.
B. Except as expressly amended by Amendment No. 1 and this Second
Amendment, the Subordinated Senior Note shall remain in full force and
effect. None of the rights, interests and obligations existing and to
exist under the Subordinated Senior Note are hereby released,
diminished or impaired, and the parties hereby reaffirm all covenants,
representations and warranties in the Subordinated Senior Note.
C. For the convenience of the parties, this Second Amendment may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Signatures Follow on Next Page
- 2 -
IN WITNESS WHEREOF, the parties have executed this Second Amendment on this 10th
day of June, 2004.
COMPANY:
Financial Industries Corporation
By: /s/ J. Bruce Boisture
Name: J. Bruce Boisture
Title: President and CEO
PAYEE:
Investors Life Insurance Company of North America
By: /s/ Theodore A.Fleron
Name: Theodore A. Fleron
Title: V.P. & Secretary
- 3 -
Exhibit A
Revised Payment Schedule
Unpaid Principal
Date of Payment Principal Amount Paid Balance Outstanding
--------------- --------------------- -------------------
6/12/1996 $4,500,000
12/12/1996 $ 24,531 $4,475,469
3/12/1997 $ 24,531 $4,450,938
6/12/1997 $ 24,531 $4,426,407
9/12/1997 $ 24,531 $4,401,876
12/12/1997 $ 24,531 $4,377,345
3/12/1998 $ 24,531 $4,352,814
6/12/1998 $ 24,531 $4,328,283
9/12/1998 $ 24,531 $4,303,752
12/12/1998 $ 24,531 $4,279,221
3/12/1999 $ 24,531 $4,254,690
6/12/1999 $ 24,531 $4,230,159
9/12/1999 $ 24,531 $4,205,628
12/12/1999 $ 24,531 $4,181,097
3/12/2000 $ 24,531 $4,156,566
6/12/2000 $ 24,531 $4,132,035
9/12/2000 $ 24,531 $4,107,504
12/12/2000 $ 24,531 $4,082,973
3/12/2001 $ 24,531 $4,058,442
6/12/2001 $ 24,531 $4,033,911
9/12/2001 $ 24,531 $4,009,380
12/12/2001 $200,469 $3,808,911
3/12/2002 $200,469 $3,608,442
6/12/2002 $200,469 $3,407,973
9/12/2002 $200,469 $3,207,504
12/12/2002 $200,469 $3,007,035
3/12/2003 $200,469 $2,806,566
6/12/2003 $200,469 $2,606,097
9/12/2003 $200,469 $2,405,628
12/12/2003 $200,469 $2,205,159
3/12/2004 $200,469 $2,004,690
6/12/2004 $ 0 $2,004,690
9/12/2004 $ 0 $2,004,690
12/12/2004 $ 0 $2,004,690
3/12/2005 $ 0 $2,004,690
6/12/2005 $ 0 $2,004,690
9/12/2005 $ 0 $2,004,690
12/12/2005 $ 0 $2,004,690
3/12/2006 $200,469 $1,804,221
6/12/2006 $200,469 $1,603,752
9/12/2006 $200,469 $1,403,283
12/12/2006 $200,469 $1,202,814
3/12/2007 $200,469 $1,002,345
6/12/2007 $200,469 $ 801,876
9/12/2007 $200,469 $ 601,407
12/12/2007 $200,469 $ 400,938
3/12/2008 $200,469 $ 200,469
6/12/2008 $200,469 $ 0
- 4 -