-----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, Enea+2XbvElSdO356P/06XvHwq+xg/CP0/kNKZ2sSLs0Ymptfy0IaPRpZf8gilv+ FLbzswJarwCRvugCI9NYUw== 0001224608-05-000019.txt : 20050816 0001224608-05-000019.hdr.sgml : 20050816 20050816155851 ACCESSION NUMBER: 0001224608-05-000019 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050815 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050816 DATE AS OF CHANGE: 20050816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSECO INC CENTRAL INDEX KEY: 0001224608 STANDARD INDUSTRIAL CLASSIFICATION: ACCIDENT & HEALTH INSURANCE [6321] IRS NUMBER: 753108137 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31792 FILM NUMBER: 051030817 BUSINESS ADDRESS: STREET 1: 11825 N PENNSYLVANIA ST CITY: CARMEL STATE: IN ZIP: 46032 BUSINESS PHONE: 3178176100 MAIL ADDRESS: STREET 1: 11825 NORTH PENNSYLVANIA STREET CITY: CARMEL STATE: IN ZIP: 46032 8-K 1 cnc.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 ----------- Date of Report (Date of earliest event reported): August 15, 2005 CONSECO, INC. (Exact name of registrant as specified in its charter) Delaware 001-31792 75-3108137 - ---------------------- ---------------- -------------- (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) organization) 11825 North Pennsylvania Street Carmel, Indiana 46032 - -------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (317) 817-6100 ------------------------- (Registrant's telephone number, including area code) Not Applicable ---------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01. Entry into a Material Definitive Agreement. See disclosure under Item 2.03 of this Current Report, which is incorporated by reference in this Item 1.01. Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. On August 15, 2005, Conseco, Inc. (the "Company") issued a press release to state that it closed its previously announced private offering of 3.50% Convertible Debentures due September 30, 2035 (the "Debentures") and completed the amendment of its senior secured credit facility. A copy of the Company's press release is filed as Exhibit 99.1 to this Current Report on Form 8-K. The Debentures were offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. The initial purchasers in the Debenture offering exercised their option to purchase an additional $30 million of Debentures, bringing the total principal amount of the offering to $330 million. Net proceeds from the offering of approximately $320 million were applied to repay term loans outstanding under the Company's senior credit facility. The terms of the Debentures are governed by an indenture dated as of August 15, 2005 between the Company and The Bank of New York Trust Company, N.A., as trustee (the "Indenture"). The Debentures represent the Company's senior, unsecured obligations and bear interest at a rate of 3.50 percent per year, payable semi-annually, beginning on March 31, 2006 and ending on September 30, 2010. Thereafter, the principal amount of the Debentures will accrete at a rate that provides holders with an aggregate yield to maturity of 3.50 percent, computed on a semi-annual, bond-equivalent basis. The Company will pay contingent interest on the Debentures for any six-month interest period from and including March 31 to and including September 29 or from and including September 30 to and including March 30, beginning with the six-month interest period commencing on September 30, 2010, if the average trading price per Debenture for the five trading day period immediately preceding the six-month interest period equals or exceeds a certain level, as described in the Indenture. The Debentures will be convertible at the option of the holders, upon the occurrence of certain specified events, into cash or, under certain circumstances, cash and shares of the Company's common stock at an initial conversion price of approximately $26.66 per share. The number of shares to be received by a converting holder is subject to adjustment for certain dilutive events. The amount of cash to be received upon conversion is equal to the lesser of (i) the accreted principal amount of the converting Debenture and (ii) the conversion value of such Debentures (as calculated in accordance with the Indenture). On or after October 5, 2010, the Company may redeem for cash all or a portion of the Debentures at any time at a redemption price equal to 100 percent of the accreted principal amount of the Debentures plus accrued and unpaid interest, including additional interest and contingent interest, if any, to the redemption date. Holders may require the Company to repurchase in cash all or any portion of the Debentures on September 30, 2010, 2015, 2020, 2025 and 2030 at a repurchase price equal to 100 percent of the accreted principal amount of the Debentures to be repurchased, plus accrued and unpaid interest, including additional interest and contingent interest, if any, to the applicable repurchase date. Holders of the Debentures may convert their Debentures only under the following circumstances: (i) prior to September 30, 2034, if the price of the Company's common stock reaches a specified threshold, (ii) prior to September 30, 2034, if the trading price for the Debentures falls below a specified threshold, (iii) at any time on or after September 30, 2034, (iv) if the Debentures have been called for redemption or (v) if specified corporate transactions occur. The holders' ability to convert their Debentures prior to September 30, 2010 (except in connection with a "fundamental change"), however, will be subject to the limitations imposed by the Company's senior credit facility, and by any limitations in any other credit facilities or indebtedness that the Company may incur in the future. If holders convert their Debentures in connection with a "change in control" of the Company prior to September 30, 2010, the holders will be entitled to receive additional shares of common stock as set forth on a table in the Indenture, provided that no increase will be made if at least 90 percent of the consideration paid for the Company's common stock in the change of control transaction consists of securities quoted on an established over-the-counter market or traded on a United States national securities exchange (or that will be so quoted or traded immediately following the transaction). If an event of default occurs and is continuing with respect to the Debentures, either the trustee or the holders of at least 25 percent in aggregate accreted principal amount of the Debentures then outstanding may declare the accreted principal amount, plus accrued and unpaid interest, including additional interest and contingent interest, if any, on the Debentures to be due and payable immediately. If an event of default relating to certain events of bankruptcy, insolvency or reorganization occurs, the accreted principal amount plus accrued and unpaid interest, including additional interest and contingent interest, if any, on the Debentures automatically will become immediately due and payable. The following are events of default with respect to the Debentures: o default for 30 days in payment of any interest, contingent interest or additional interest due and payable on the Debentures; o default in payment of accreted principal of the Debentures at maturity, upon redemption, upon repurchase or following a fundamental change, when the same becomes due and payable; o default by the Company or any of its subsidiaries in the payment of principal, interest or premium when due under any other instruments of indebtedness having an aggregate outstanding principal amount of $50.0 million (or its equivalent in any other currency or currencies) or more, following a specified period for cure; o default in the Company's conversion obligations upon exercise of a holder's conversion right, following a specified period for cure; o default in the Company's obligations to give notice of the occurrence of a fundamental change within the time required to give such notice; o acceleration of any of the Company's indebtedness or the indebtedness of any of its subsidiaries under any instrument or instruments evidencing indebtedness (other than the Debentures) having an aggregate outstanding principal amount of $50.0 million (or its equivalent in any other currency or currencies) or more, subject to certain exceptions; o default in the Company's performance of any other covenants or agreements contained in the Indenture or the Debentures for 60 days after written notice to us from the trustee or the holders of at least 25 percent in aggregate principal amount of the Debentures; and o certain events of bankruptcy, insolvency and reorganization of us or any of the Company's subsidiaries. On August 15, 2005, in connection with the sale of the Debentures, the Company also entered into a Registration Rights Agreement (the "Registration Rights Agreement") with the initial purchasers. Pursuant to that agreement, the Company agreed to file with the Securities and Exchange Commission within 90 days, and to use its reasonable best efforts to cause to become effective within 210 days, a shelf registration statement with respect to the resale of the Debentures and the sale of the Company's shares of common stock issuable upon conversion of the Debentures. If the Company fails to comply with certain of its obligations under the Registration Rights Agreement, additional interest will be payable on the Debentures. The amendment of the senior credit facility provides for, among other things: o A reduction in the principal amount of the facility from $767 million to $447 million, using proceeds from the Debenture offering described above; o A reduction in the interest spread on the term loan from 350 basis points over LIBOR to 200 basis points over LIBOR, with a further reduction to 175 basis points over LIBOR when the Company's credit facility is rated Ba3 by Moody's Investor Services, Inc.; o Relaxed financial covenants and increased flexibility for the Company to enter into capital markets transactions. Certain of the initial purchasers in the Debenture offering and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for the Company, for which they received or will receive customary fees and expenses. Bank of America, N.A. and JPMorgan Chase Bank, N.A., affiliates of Banc of America Securities LLC and J.P. Morgan Securities Inc., respectively, are lenders under the Company's senior credit facility, and received a portion of the amounts to be repaid under the senior credit facility from the Debenture offering. Banc of America Securities LLC and J.P. Morgan Securities Inc. are lead arrangers and joint bookrunners under the senior credit facility. In addition, Goldman Sachs Credit Partners L.P., Morgan Stanley Senior Funding, Inc., and Lehman Commercial Paper Inc., affiliates of Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and Lehman Brothers Inc., respectively, have become lenders under the Company's senior credit facility. Certain of the initial purchasers individually own less than five percent of the Company's outstanding common stock and common stock equivalents. Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Banc of America Securities LLC and J.P. Morgan Securities Inc. also acted as underwriters in public offerings of the Company's common stock and class B preferred stock. The foregoing description of the private placement and the amendment to the senior credit facility does not purport to be complete and is qualified in its entirety by reference to the Indenture, the Registration Rights Agreement, and the Amended and Restated Credit Agreement dated as of August 15, 2005 among Conseco, Inc., Bank of America, N.A., as Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, and other financial institutions, which are attached hereto as Exhibits 4.4, 4.5 and 10.1. Item 3.02. Unregistered Sales of Equity Securities. See disclosure under Item 2.03 of this Current Report, which is incorporated by reference in this Item 3.02. Item 9.01. Financial Statements and Exhibits. (c) Exhibits 4.4 Indenture dated as of August 15, 2005 for 3.50% Convertible Debentures due September 30, 2035 between Conseco, Inc. and The Bank of New York Trust Company, N.A., as Trustee. 4.5 Registration Rights Agreement dated as of August 15, 2005 among Conseco, Inc. and Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated and J.P. Morgan Securities, Inc., as representatives of several purchasers of the 3.50% Convertible Debentures due September 30, 2035. 10.1 Amended and Restated Credit Agreement dated as of August 15, 2005 among Conseco, Inc., Bank of America, N.A., as Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, and other financial institutions. 99.1 Press release of Conseco, Inc. issued August 15, 2005. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. CONSECO, INC. August 16, 2005 By: /s/ John R. Kline ------------------------ John R. Kline Senior Vice President and Chief Accounting Officer EX-4 2 indenture.txt EXHIBIT 4.4 Exhibit 4.4 EXECUTION COPY - -------------------------------------------------------------------------------- CONSECO, INC. ISSUER TO THE BANK OF NEW YORK TRUST COMPANY, N.A. TRUSTEE INDENTURE Dated as of August 15, 2005 3.50% CONVERTIBLE DEBENTURES DUE SEPTEMBER 30, 2035 - -------------------------------------------------------------------------------- TABLE OF CONTENTS Article I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................................1 Section 1.1 Definitions.....................................................................1 Section 1.2 Compliance Certificates and Opinions...........................................14 Section 1.3 Form of Documents Delivered to the Trustee.....................................14 Section 1.4 Acts of Holders of Securities..................................................15 Section 1.5 Notices, Etc. to the Trustee and Company......................................17 Section 1.6 Notice to Holders of Securities; Waiver........................................17 Section 1.7 Effect of Headings and Table of Contents.......................................18 Section 1.8 Successors and Assigns.........................................................18 Section 1.9 Separability Clause............................................................18 Section 1.10 Benefits of Indenture..........................................................18 Section 1.11 Governing Law..................................................................18 Section 1.12 Legal Holidays.................................................................18 Section 1.13 Conflict with Trust Indenture Act..............................................19 Article II SECURITY FORMS........................................................................................19 Section 2.1 Form Generally.................................................................19 Section 2.2 Form of Security...............................................................20 Section 2.3 Form of Certificate of Authentication..........................................31 Section 2.4 Form of Conversion Notice......................................................32 Section 2.5 Form of Assignment.............................................................33 Article III THE SECURITIES.......................................................................................34 Section 3.1 Title and Terms................................................................34 Section 3.2 Maturity, Interest and Principal Payments Generally............................34 Section 3.3 Denominations..................................................................35 Section 3.4 Execution, Authentication, Delivery and Dating.................................35 Section 3.5 Global Securities; Non-global Securities; Book-entry Provisions. Global Securities..............................................................36 Section 3.6 Registration; Registration of Transfer and Exchange; Restrictions on Transfer..37 Section 3.7 Mutilated, Destroyed, Lost or Stolen Securities................................41 Section 3.8 Regular Interest...............................................................41 Section 3.9 Contingent Interest............................................................42 Section 3.10 Accretion......................................................................42 Section 3.11 Payment of Interest; Interest Rights Preserved.................................42 Section 3.12 Persons Deemed Owners..........................................................43 Section 3.13 Cancellation...................................................................43 Section 3.14 Computation of Interest........................................................44 Section 3.15 CUSIP Numbers..................................................................44 Article IV SATISFACTION AND DISCHARGE............................................................................44
ii Section 4.1 Satisfaction and Discharge of Indenture........................................44 Section 4.2 Application of Trust Money.....................................................45 Article V DEFAULT AND REMEDIES...................................................................................46 Section 5.1 Events of Default..............................................................46 Section 5.2 Covenant of Company to Pay to Trustee Whole Amount Due on Securities on Default in Payment of Interest or Principal; Suits for Enforcement by Trustee.....................48 Section 5.3 Trustee May File Proof of Claim................................................48 Section 5.4 Trustee May Enforce Claims Without Possession of Securities....................49 Section 5.5 Application of Money Collected.................................................49 Section 5.6 Limitation on Suits............................................................50 Section 5.7 Notice of Defaults.............................................................50 Section 5.8 Unconditional Right of Holders to Receive Principal and Interest...............51 Section 5.9 Restoration of Rights and Remedies.............................................51 Section 5.10 Rights and Remedies Cumulative.................................................51 Section 5.11 Delay or Omission not Waiver...................................................51 Section 5.12 Control by Holders of Securities...............................................51 Section 5.13 Waiver of Past Defaults........................................................52 Section 5.14 Undertaking for Costs..........................................................52 Section 5.15 Waiver of Stay, Usury or Extension Laws........................................52 Article VI THE TRUSTEE...........................................................................................53 Section 6.1 Certain Duties and Responsibilities............................................53 Section 6.2 Notice of Defaults.............................................................54 Section 6.3 Certain Rights of Trustee......................................................54 Section 6.4 Not Responsible for Recitals or Issuance of Securities.........................55 Section 6.5 May Hold Securities, Act as Trustee Under Other Indentures.....................55 Section 6.6 Money Held in Trust............................................................55 Section 6.7 Compensation and Reimbursement.................................................55 Section 6.8 Corporate Trustee Required; Eligibility........................................56 Section 6.9 Resignation and Removal; Appointment of Successor..............................56 Section 6.10 Acceptance of Appointment by Successor.........................................58 Section 6.11 Merger, Conversion, Consolidation or Succession to Business....................58 Section 6.12 Authenticating Agents..........................................................58 Section 6.13 Disqualification; Conflicting Interests........................................60 Section 6.14 Preferential Collection of Claims Against Company..............................60 Article VII CONSOLIDATION, MERGER, SALE OR TRANSFER..............................................................60 Section 7.1 Company May Consolidate, Etc. Only on Certain Terms...........................60 Section 7.2 Successor Substituted..........................................................61
iii Article VIII SUPPLEMENTAL INDENTURES.............................................................................61 Section 8.1 Supplemental Indentures Without Consent of Holders of Securities...............61 Section 8.2 Supplemental Indentures with Consent of Holders of Securities..................63 Section 8.3 Execution of Supplemental Indentures...........................................64 Section 8.4 Effect of Supplemental Indentures..............................................64 Section 8.5 Reference in Securities to Supplemental Indentures.............................64 Section 8.6 Notice of Supplemental Indentures..............................................64 Article IX MEETINGS OF HOLDERS OF SECURITIES.....................................................................65 Section 9.1 Purposes for Which Meetings May Be Called......................................65 Section 9.2 Call, Notice and Place of Meetings.............................................65 Section 9.3 Persons Entitled to Vote at Meetings...........................................65 Section 9.4 Quorum; Action.................................................................65 Section 9.5 Determination of Voting Rights; Conduct and Adjournment of Meetings............66 Section 9.6 Counting Votes and Recording Action of Meetings................................67 Article X COVENANTS..............................................................................................67 Section 10.1 Payment of Principal and Interest..............................................67 Section 10.2 Maintenance of Offices or Agencies.............................................67 Section 10.3 Money for Security Payments to Be Held in Trust................................68 Section 10.4 Existence......................................................................69 Section 10.5 Maintenance of Properties......................................................69 Section 10.6 Payment of Taxes and Other Claims..............................................70 Section 10.7 Registration and Listing.......................................................70 Section 10.8 Statement by Officers as to Default............................................70 Section 10.9 Delivery of Certain Information................................................71 Section 10.10 Tax Treatment of Securities....................................................71 Section 10.11 Resale of Certain Securities...................................................72 Section 10.12 Registration Rights............................................................72 Section 10.13 Waiver of Certain Covenants....................................................73 Article XI REDEMPTION OF SECURITIES..............................................................................73 Section 11.1 Right of Redemption............................................................73 Section 11.2 Applicability of Article.......................................................73 Section 11.3 Election to Redeem; Notice to Trustee..........................................73 Section 11.4 Notice of Redemption...........................................................74 Section 11.5 Deposit of Redemption Price....................................................75 Section 11.6 Securities Payable on Redemption Date..........................................75 Section 11.7 Securities Redeemed in Part....................................................76 Article XII CONVERSION OF SECURITIES.............................................................................76
iv Section 12.1 Right to Convert...............................................................76 Section 12.2 Certain Corporate Transactions.................................................77 Section 12.3 Determination of Satisfaction of Certain Conversion Triggers...................78 Section 12.4 Notice of Conversion...........................................................78 Section 12.5 Conversion at Option of the Holder Upon a Fundamental Change...................78 Section 12.6 Exercise of Conversion Privilege...............................................80 Section 12.7 Exchange in Lieu of Conversion.................................................81 Section 12.8 Fractions of Shares............................................................82 Section 12.9 Anti-Dilution Adjustments......................................................82 Section 12.10 Adjustment to Capped Anti-Dilution Multiplier In Connection With a Change in Control............................................88 Section 12.11 Notice of Adjustments..........................................................89 Section 12.12 Notice of Certain Corporate Action.............................................89 Section 12.13 Company to Provide Common Stock................................................90 Section 12.14 Taxes on Conversions...........................................................90 Section 12.15 Covenant as to Common Stock....................................................91 Section 12.16 Cancellation of Converted Securities...........................................91 Section 12.17 Rights Issued in Respect of Common Stock.......................................91 Section 12.18 Responsibility of Trustee for Conversion Provisions............................92 Article XIII REPURCHASE OF SECURITIES............................................................................92 Section 13.1 Repurchase Rights..............................................................92 Section 13.2 Exchange in Lieu of Repurchase.................................................94 Article XIV HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE.......................................94 Section 14.1 Company to Furnish Trustee Names and Addresses of Holders......................94 Section 14.2 Preservation of Information....................................................94 Section 14.3 Reports by Trustee.............................................................95 Section 14.4 Reports by Company.............................................................95 Section 14.5 Calculations in Respect of Securities..........................................95 Article XV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.......................................95 Section 15.1 Indenture and Securities Solely Corporate Obligations..........................96
v INDENTURE, dated as of August 15, 2005, between CONSECO, INC., a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 11825 N. Pennsylvania Street, Carmel, Indiana 46032 (herein called the "Company"), and THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee hereunder (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the creation of an issue of its 3.50% Convertible Debentures due September 30, 2035 (herein called the "Securities") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. All things necessary to make the Securities, when the Securities are executed by the Company and authenticated and delivered hereunder, the valid obligations of the Company, and to make this Indenture a valid agreement of the Company, in accordance with their and its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.1 Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Accredited Investor" has the meaning specified in Section 2.2. "Accreted Principal Amount" has the meaning specified in Section 3.10. "Act," when used with respect to any Holder of a Security, has the meaning specified in Section 1.4. "Additional Interest" has the meaning specified in Section 2.2. "Adjustment Factor" has the meaning specified in Section 12.10(a). "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control," when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent Member" means any member of, or participant in, the Depositary. "Applicable Conversion Reference Period" means: (a) in the case of a conversion in connection with a Change in Control, the ten consecutive Trading Days immediately following the Change in Control Effective Date; (b) in all other cases, the ten consecutive Trading Days beginning on the third Trading Day following the Conversion Date. "Applicable Procedures" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of DTC or any successor Depository, in each case to the extent applicable to such transaction and as in effect from time to time. "Authenticating Agent" means any Person authorized pursuant to Section 6.12 to act on behalf of the Trustee to authenticate Securities. "beneficial owner" and "beneficial ownership" will be determined in accordance with Rule 13d-3 under the Exchange Act. "Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board. "Board Resolution" means a resolution duly adopted by the Board of Directors, a copy of which, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, shall have been delivered to the Trustee. "Business Day" when used with respect to any Place of Payment, Place of Conversion or any other place, as the case may be, means any day other than a Saturday or Sunday or a day on which banking institutions in the City of New York or the City of Indianapolis are authorized or required by law or executive order to close. 2 "capital stock" of any Person means any and all shares, interests, participations or other equivalents however designated of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person and any rights (other than debt securities convertible or exchangeable into an equity interest), warrants or options to acquire an equity interest in such Person, and American Depositary Receipts. "Capped Anti-Dilution Multiplier" means an amount initially equal to 1.0000, subject to adjustment pursuant to Section 7.1 and Article XII hereof; provided, however, that in no event will the Capped Anti-Dilution Multiplier exceed 1.2750. "Change in Control" means the occurrence of any of the following at any time after the date of this Indenture: (a) any Person, including any syndicate or group deemed to be a "person" under Section 13(d)(3) of the Exchange Act, acquires beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of the Company's capital stock entitling such Person to exercise 50% or more of the total voting power of all shares of the Company's capital stock entitled to vote generally in elections of directors, other than an acquisition by the Company, any of its Subsidiaries or any of its employee benefit plans and other than any transaction contemplated by clause (b)(ii) below; or (b) the Company merges or consolidates with or into any other Person (other than a Subsidiary), another Person merges with or into the Company, or the Company conveys, sells, transfers or leases all or substantially all of its assets to another Person, other than any transaction: (i) that does not result in a reclassification, conversion, exchange or cancellation of the outstanding Common Stock; (ii) pursuant to which the holders of Common Stock immediately prior to the transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all shares of capital stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after the transaction; or (iii) which is effected solely to change the Company's jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving entity; or (c) at any time the Continuing Directors do not constitute a majority of the Board of Directors (or, if applicable, a successor Person to the Company); provided, however, that a change in control under clauses (a) or (b) of this definition will not be deemed to have occurred if at least 90% of the consideration paid for the Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to dissenters' appraisal rights) in a merger or consolidation or a conveyance, sale, transfer or lease otherwise constituting a Change in Control under clause (a) and/or clause (b) above consists of shares of capital stock traded on the New York Stock Exchange or another United States national securities exchange or quoted on The Nasdaq National Market or another established automated over-the-counter trading market in the United States (or will be so quoted or traded immediately following the merger or consolidation) and as a result of the merger or consolidation the Securities become convertible into such shares of such capital stock. 3 "Change in Control Effective Date" has the meaning specified in Section 12.10. "Change in Control Price" has the meaning specified in Section 12.10(a). "Closing Price" with respect to the Common Stock, on any date, means the closing sale price per share (or, if no closing sale price is reported, the average of the bid and asked prices or, if more than one in either case, the average of the average bid and the average asked prices) on that date as reported in composite transactions by the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, as reported by the principal U.S. securities exchange or The Nasdaq National Market on which the Common Stock is traded or quoted. The Closing Price will be determined without reference to after-hours or extended market trading. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange and not reported by The Nasdaq National Market on the relevant date, the Closing Price will be the last quoted bid for the Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization. If the Common Stock is not so quoted, the Closing Price will be the average of the midpoint of the last bid and asked prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. "Code" has the meaning specified in Section 2.l. "Commission" means the U.S. Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Common Stock" means the Common Stock, par value $0.01 per share, of the Company authorized at the date of this Indenture (or as such stock may be constituted from time to time (including upon a change in the par value of such securities)), which is currently listed on the New York Stock Exchange under the trading symbol "CNO." Subject to the provisions of Section 7.1 and Section 12.9, shares issuable on conversion of Securities shall include only shares of Common Stock or shares of any class or classes of common stock resulting from any reclassification or reclassifications thereof; provided, however, that if at any time there shall be more than one such resulting class, the shares so issuable on conversion of Securities shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. "common stock" includes any stock of any class of capital stock which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the issuer thereof, which has unrestricted voting rights and which is not subject to redemption by the issuer thereof. 4 "Company" means the Person named as the "Company" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by (a) its Chairman of the Board, its President, Chief Executive Officer, an Executive Vice President or a Vice President, and by (b) its principal financial officer, Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Comparable Yield" has the meaning specified in Section 2.2. "Contingent Interest" means the interest amounts payable pursuant to Section 3.9. "Contingent Payment Regulations" has the meaning specified in Section 10.10. "Continuing Directors" means, as of any date of determination, any member of the Board of Directors who (a) was a member of the Board of Directors on the date of this Indenture or (b) becomes a member of the Board of Directors subsequent to the date of this Indenture and was appointed, nominated for election or elected to the Board of Directors with the approval of a majority of the Continuing Directors who were members of the Board of Directors at the time of such appointment, nomination or election. "Conversion Agent" means any Person authorized by the Company to convert Securities in accordance with Article XII. The Company has initially appointed the Trustee as its Conversion Agent pursuant to Section 10.2 hereof. "Conversion Consideration" means, as applicable, in connection with the surrender for conversion of any Security having an Initial Principal Amount of $1,000: (a) other than in connection with a Fundamental Change, (i) cash in an amount equal to the lesser of (A) the Accreted Principal Amount of such Security; or (B) the Conversion Value of such Security; and (ii) a number of shares of Common Stock equal to the sum of the Daily Share Amounts for each of the ten consecutive Trading Days in the Applicable Conversion Reference Period; provided, however, that the Company may pay cash in lieu of fractional shares otherwise issuable upon conversion of the Securities in accordance with Section 12.8; (b) in connection with a Change in Control, (i) cash in an amount equal to the Accreted Principal Amount of such Security plus accrued and unpaid interest, including Additional Interest and Contingent Interest, if any, to but not including the Fundamental Change Election Date, unless such Fundamental Change Election Date falls after a Record Date and prior to the corresponding Interest Payment Date, in which case the full amount of accrued and unpaid interest, including Additional Interest and Contingent Interest, if any, will be payable on such Interest Payment Date to the Holder of record at the close of business on the corresponding Record Date; and (ii) a number of shares of Common Stock determined pursuant to clause (a)(ii) of this definition; provided, however, that clause (a) of the definition of Applicable Conversion Reference Period shall apply, and; provided further that if the Change in Control occurs prior to 5 September 30, 2010, the Capped Anti-Dilution Multiplier shall be adjusted pursuant to Section 12.10; or (c) in connection with a Termination of Trading, cash in an amount equal to the Accreted Principal Amount of such Security plus accrued and unpaid interest, including Additional Interest and Contingent Interest, if any, to but not including the Fundamental Change Election Date, unless such Fundamental Change Election Date falls after a Record Date and prior to the corresponding Interest Payment Date, in which case the full amount of accrued and unpaid interest, including Additional Interest and Contingent Interest, if any, will be payable on such Interest Payment Date to the Holder of record at the close of business on the corresponding Record Date. The Conversion Consideration may also include cash and distributed assets in the circumstances contemplated by Section 12.9. If more than one Security is surrendered by a Holder, the Conversion Consideration shall be computed based on the aggregate principal amounts of Securities surrendered. The Company shall calculate the Conversion Consideration in accordance with Section 14.5. "Conversion Date" has the meaning specified in Section 12.6. "Conversion Period" means the period from and including the eleventh Trading Day in a fiscal quarter of the Company up to but not including the eleventh Trading Day in the following fiscal quarter of the Company. "Conversion Value" for any Security with an Initial Principal Amount of $1,000, as of any Conversion Date, equals the product of (a) 37.5090 and (b) the average of the Parity Prices for each of the ten consecutive Trading Days in the Applicable Conversion Reference Period. "Corporate Trust Office" means the office of the Trustee at which at any particular time the trust created by this Indenture shall be principally administered (which at the date of this Indenture is located at 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602, Attention: Corporate Trust Administration; and for purposes of Section 10.2 shall mean, 101 Barclay Street, New York, New York, 10285, Attention: Corporate Trust Administration. "corporation" means a corporation, company, association, joint-stock company or business trust. "Current Market Price" has the meanings specified in Section 12.9, as applicable. "Daily Adjustment" has the meaning specified in Section 12.9. "Daily Share Amount" means, for each Trading Day in the Applicable Conversion Reference Period, the greater of (a) zero or (b) a number of shares determined by the following formula: 6 1 x (37.5090 x Parity Price) - Accreted Principal Amount - ---------------------------------------------------- 10 Closing Price provided, however, that if an event requiring adjustment to either the Capped Anti-Dilution Multiplier or the Uncapped Anti-Dilution Multiplier occurs on any date during the period commencing with the first day of the Applicable Conversion Reference Period and ending on the day the shares of the Common Stock Holders are entitled to receive pursuant to this Indenture are delivered, the Daily Share Amount for each Trading Day in the Applicable Conversion Reference period will be adjusted by multiplying it by a fraction: (1) the numerator of which is the Parity Share Number in effect on the day the shares of the Common Stock are delivered and (2) the denominator of which is the Parity Share Number in effect on that Trading Day. "default" means any event which is, or after notice or lapse of time would become, an Event of Default. "Defaulted Interest" has the meaning specified in Section 3.11. "Depositary" means, with respect to any Securities (including any Global Securities), a clearing agency that is registered as such under the Exchange Act and is designated by the Company to act as Depositary for such Securities (or any successor securities clearing agency so registered). "Documents" has the meaning specified in Section 6.3. "Dollar" or "U.S. $" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debts. "DTC" means The Depository Trust Company, a New York corporation. "Effective Failure" has the meaning specified in Section 2.2. "Effectiveness Period" has the meaning specified in Section 2.2. "Event of Default" has the meaning specified in Section 5.1. "Exchange Act" means the U.S. Securities Exchange Act of 1934 (or any successor statute), as amended from time to time. "ex-date" or "ex-dividend date" has the meaning set forth in Section 12.2. "Fair Market Value" shall mean the amount which a willing buyer would pay a willing seller in an arm's length transaction (as determined in good faith by the Board of Directors, whose good faith determination shall be conclusive). "Fundamental Change" means the occurrence of a Change in Control or a Termination of Trading. 7 "Fundamental Change Notice" has the meaning specified in Section 12.5(c) hereof. "Fundamental Change Effective Date" means a Change in Control Effective Date or the date on which a Termination of Trading is deemed to have occurred. "Fundamental Change Election Date" means any date selected by the Company in connection with a Fundamental Change Effective Date on which the Holder may require the Company to convert the Securities in accordance with Section 12.5. "Global Security" means a Security that is registered in the Security Register in the name of a Depositary or a nominee thereof. "Holder" means the Person in whose name the Security is registered in the Security Register. "in connection with," when followed by "a Fundamental Change," "a Change in Control" or "a Termination of Trading" has the meaning set forth in Section 12.5(e). "Indebtedness" means the principal of, premium, if any, and interest on any indebtedness for borrowed money (excluding trade payables and insurance liabilities) of the Company, whether outstanding on the date of this Indenture or hereafter created, incurred or assumed, so long as the instrument or agreement pursuant to which indebtedness was created does not expressly provide that such indebtedness will be subordinate in right of payment to the Securities. "Indenture" means this Indenture as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this Indenture and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Indenture and any such supplemental indenture, respectively. "Initial Principal Amount" with respect to the Securities means $330.0 million in the aggregate for all Securities in authorized denominations of $1,000 and any integral multiple thereof. "Initial Purchasers" means Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc., Lehman Brothers Inc. and Banc of America Securities LLC. "Interest" means Regular Interest, Contingent Interest and Additional Interest, unless the context requires otherwise. "Interest Payment Date" has the meaning specified in Section 2.2. "Interest Period" has the meaning specified in Section 2.2. "Issue Date" means August 15, 2005. "Market Capitalization" has the meaning specified in Section 12.9. 8 "Maturity," when used with respect to any Security, means the date on which the principal amount of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, exercise of the repurchase right set forth in Article XIII or otherwise. "Measurement Period" has the meaning specified in Section 3.9. "Officers' Certificate" means a certificate signed by (a) the Chairman of the Board, the President, Chief Executive Officer, or any Vice President and by (b) the principal financial officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 10.8 shall be the principal executive, financial or accounting officer of the Company. "Opinion of Counsel" means a written opinion of counsel, in form and substance reasonably satisfactory to the Trustee, who may be counsel for the Company and who shall be reasonably acceptable to the Trustee. "Outstanding," when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (a) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) Securities for which money in the necessary amount to pay or redeem such Securities has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor reasonably satisfactory to the Trustee has been made; (c) Securities which have been paid pursuant to Section 3.7 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; (d) Securities converted pursuant to Article XII; and (e) Securities that cease to be Outstanding in accordance with Section 13.1; provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such determination as to the presence of a quorum or upon any such request, demand, authorization, 9 direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee has been notified in writing to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor, and the Trustee shall be protected in relying upon an Officer's Certificate to such effect. "Parity Price" means, on any date of determination, the Closing Price of the Common Stock on such date multiplied by the Parity Share Number. "Parity Share Number" means, on any date of determination, the product of the Capped Anti-Dilution Multiplier as of such date and the Uncapped Anti-Dilution Multiplier as of such date. "Paying Agent" means any Person authorized by the Company to pay the principal of or Interest on any Securities on behalf of the Company and, except as otherwise specifically set forth herein, such term shall include the Company if it shall act as its own Paying Agent. The Company has initially appointed the Trustee as its Paying Agent pursuant to Section 10.2 hereof. "Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated organization or government or any agency or political subdivision thereof and, for purposes of the definition of "Change in Control," includes any syndicate or group that would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act. "Place of Conversion" has the meaning specified in Section 3.1. "Place of Payment" has the meaning specified in Section 3.1. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.7 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Press Release" means any press release issued by the Company and disseminated to Reuters Business News Services and Bloomberg News Services. "principal amount" means the Initial Principal Amount prior to September 30, 2010 and the Accreted Principal Amount on or after September 30, 2010. "Purchase Agreement" means the Purchase Agreement, dated as of August 9, 2005, among the Company and the Initial Purchasers, as such agreement may be amended from time to time. "Qualified Institutional Buyer" shall mean a "qualified institutional buyer" as defined in Rule 144A. "Record Date" means any Regular Record Date or Special Record Date. 10 "Record Date Period" means the period from the close of business of any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date. "Redemption Date," when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Notice" has the meaning specified in Section 11.4. "Redemption Price," when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Registrable Securities" means all or any portion of the Securities issued from time to time under this Indenture in registered form and the shares of Common Stock issuable upon conversion, repurchase or redemption of such Securities; provided, however, that a security ceases to be a Registrable Security when it is no longer a Restricted Security. "Registration Default" has the meaning specified in Section 2.2. "Registration Rights Agreement" means the Registration Rights Agreement, dated as of August 15, 2005, between the Company and the Initial Purchasers, as such agreement may be amended from time to time in accordance with its terms. "Regular Interest" has the meaning specified in Section 3.8. "Regular Record Date" for Interest payable in respect of any Security on any Interest Payment Date means the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. "Repurchase Date" has the meaning specified in Section 13.1. "Repurchase Notice" has the meaning set forth in Section 13.1. "Repurchase Premium" has the meaning set forth in Section 12.9(g). "Repurchase Price" has the meaning specified in Section 13.1. "Responsible Officer," when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge and familiarity with the particular subject. "Restricted Global Security" has the meaning specified in Section 2.1(f). "Restricted Securities" means all Securities required pursuant to Section 3.6(h) to bear any Restricted Securities Legend. Such term includes the Restricted Global Security. 11 "Restricted Securities Legend" means, collectively, the legends substantially in the forms of the legends required in the form of Security set forth in Section 2.2 to be placed upon each Restricted Security. "Rule 144" means Rule 144 under the Securities Act (or any successor provision), as it may be amended from time to time. "Rule 144A" means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time. "Rule 144A Information" has the meaning specified in Section 10.9(b). "Securities" has the meaning specified in the first paragraph under the caption "Recitals of the Company." "Securities Act" means the U.S. Securities Act of 1933 (or any successor statute), as amended from time to time. "Security Register" and "Security Registrar" have the respective meanings specified in Section 3.6. "Shelf Registration Statement" has the meaning specified in Section 2.2. "Significant Subsidiary" means, with respect to any Person, a Subsidiary of such Person that would constitute a "significant subsidiary" as such term is defined under Rule 1-02 of Regulation S-X under the Securities Act and the Exchange Act. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Company pursuant to Section 3.11. "Spin-Off" has the meaning specified in Section 12.9. "Stated Maturity," when used with respect to any Security or any installment of Interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of Interest is due and payable. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock or other similar interests in the corporation which ordinarily has or have voting power for the election of directors, or persons performing similar functions, whether at all times or only so long as no senior class of stock or other interests has or have such voting power by reason of any contingency. "Successor Security" of any particular Security means every Security issued after, and evidencing all or a portion of the same debt as that evidenced by, such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.7 in 12 exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Surrender Certificate" means a certificate substantially in the form set forth in Annex B. "Termination of Trading" will be deemed to have occurred if the Common Stock (or other common stock into which the Securities are convertible) is neither listed for trading on the New York Stock Exchange or another United States national securities exchange or approved for quotation on The Nasdaq National Market or another established automated over-the-counter trading market in the United States. "Then-Prevailing Market Price" means the average of the Closing Prices of the Common Stock for the five consecutive Trading Days ending on the relevant repurchase date. "Trading Day" means a day during which trading in securities generally occurs on the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, on another national or regional securities exchange, or The Nasdaq National Market, on which the Common Stock is then listed or quoted or, if the Common Stock is not listed on the New York Stock Exchange or a national or regional securities exchange or quoted on The Nasdaq National Market, on the principal other market on which the Common Stock is then traded or quoted. "Trading Price," with respect to the Securities as of any date of determination, means the average of the secondary market bid quotations per Security obtained by the Company for $5.0 million in Initial Principal Amount of Securities at approximately 3:30 p.m., New York City time, on such determination date from two independent nationally recognized securities dealers, which may include the Initial Purchasers, selected by the Company; provided that, if at least two such bids cannot reasonably be obtained by the Company, but one such bid can reasonably be obtained by the Company, that one bid shall be used; provided further that, in determining whether Contingent Interest will be paid by the Company as described in Section 3.9, if the Company cannot reasonably obtain at least one bid for $5.0 million in Initial Principal Amount of Securities from a nationally recognized securities dealer or, in the Company's reasonable judgment, the bid quotations are not indicative of the secondary market value of the Securities, then the trading price of a Security having an Initial Principal Amount of $1,000 will equal the product of (x) 37.5090 and (y) the Parity Price of our Common Stock on such determination date. "Trigger Event" has the meaning specified in Section 12.17. "Trust Indenture Act" means the Trust Indenture Act of 1939, and the rules and regulations thereunder, as in force at the date as of which this Indenture was executed, provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939, and the rules and regulations thereunder, as so amended. 13 "Trustee" means the Person named as the "Trustee" in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. "Uncapped Anti-Dilution Multiplier" means an amount initially equal to 1.0000, subject to adjustment pursuant to Section 12.9. "United States" means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction (its "possessions" including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands). "Unrestricted Securities Certificate" means a certificate substantially in the form set forth in Annex A. Section 1.2 Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (including certificates provided for in Section 10.8) shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 1.3 Form of Documents Delivered to the Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons 14 as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or any other Person stating that the information with respect to such factual matters is in the possession of the Company or such other Person, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 1.4 Acts of Holders of Securities. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders of Securities may be embodied in and evidenced by (i) one or more instruments of substantially similar tenor signed by such Holders in person or by an agent or proxy duly appointed in writing by such Holders or (ii) the record of Holders of Securities voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities duly called and held in accordance with the provisions of Article IX. Such action shall become effective when such instrument or instruments or record is delivered to the Trustee and, where it is hereby expressly required, to the Company. The Trustee shall promptly deliver to the Company copies of all such instruments and records delivered to the Trustee. Such instrument or instruments and records (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders of Securities signing such instrument or instruments and so voting at such meeting. Proof of execution of any such instrument or of a writing appointing any such agent or proxy, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 9.6. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The principal amount and serial number of any Security held by any Person, and the date of his holding the same, shall be proved by the Security Register. 15 (d) The fact and date of execution of any such instrument or writing and the authority of the Person executing the same may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section. (e) The Company may set any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted by this Indenture to be given or taken by Holders. Promptly and in any case not later than ten days after setting a record date, the Company shall notify the Trustee and the Holders of such record date. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 14.1) prior to such first solicitation or vote, as the case may be. With regard to any record date, the Holders on such date (or their duly appointed agents or proxies), and only such Persons, shall be entitled to give or take, or vote on, the relevant action, whether or not such Holders remain Holders after such record date. Notwithstanding the foregoing, the Company shall not set a record date for, and the provisions of this paragraph shall not apply with respect to, any notice, declaration or direction referred to in the next paragraph. Upon receipt by the Trustee from any Holder of (i) any notice of default or breach referred to in Section 5.1(a)(vii), if such default or breach has occurred and is continuing and the Trustee shall not have given such a notice to the Company, (ii) any declaration of acceleration referred to in Section 5.1(b), if an Event of Default has occurred and is continuing and the Trustee shall not have given such a declaration to the Company, or (iii) any direction referred to in Section 5.12, if the Trustee shall not have taken the action specified in such direction, then, with respect to clauses (ii) and (iii), a record date shall automatically and without any action by the Company or the Trustee be set for determining the Holders entitled to join in such declaration or direction, which record date shall be the close of business on the tenth day (or, if such day is not a Business Day, the first Business Day thereafter) following the day on which the Trustee receives such declaration or direction, and, with respect to clause (i), the Trustee may set any day as a record date for the purpose of determining the Holders entitled to join in such notice of default. Promptly after such receipt by the Trustee of any such declaration or direction referred to in clause (ii) or (iii), and promptly after setting any record date with respect to clause (i), and as soon as practicable thereafter, the Trustee shall notify the Company and the Holders of any such record date so fixed. The Holders on such record date (or their duly appointed agents or proxies), and only such Persons, shall be entitled to join in such notice, declaration or direction, whether or not such Holders remain Holders after such record date; provided that, unless such notice, declaration or direction shall have become effective by virtue of Holders of the requisite principal amounts of Securities on such record date (or their duly appointed agents or proxies) having joined therein on or prior to the 90th day after such record date, such notice, declaration or direction shall automatically and without any action by any Person be canceled and of no further effect. Nothing in this paragraph shall be construed to prevent a Holder (or a duly appointed agent or proxy thereof) from giving, before or after the expiration of such 90-day period, a notice, declaration or direction contrary to or different from, or, after the expiration of such period, identical to, the notice, declaration or direction to which such record date relates, in 16 which event a new record date in respect thereof shall be set pursuant to this paragraph. In addition, nothing in this paragraph shall be construed to render ineffective any notice, declaration or direction of the type referred to in this paragraph given at any time to the Trustee and the Company by Holders (or their duly appointed agents or proxies) of the requisite principal amounts of Securities on the date such notice, declaration or direction is so given. (f) Except as provided in Sections 5.12 and 5.13, any request, demand, authorization, direction, notice, consent, election, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. (g) The provisions of this Section are subject to the provisions of Section 9.5. Section 1.5 Notices, Etc. to the Trustee and Company. Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of Holders of Securities or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: (a) the Trustee by any Holder of Securities or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with a Responsible Officer of the Trustee and received at its Corporate Trust Office; and (b) the Company by the Trustee or by any Holder of Securities shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing, mailed, first-class postage prepaid, or telecopied and confirmed by mail, first-class postage prepaid, or delivered by hand or overnight courier, addressed to the Company at 11825 N. Pennsylvania Street, Carmel, Indiana 46032, Attention: Daniel J. Murphy, Treasurer, or at any other address previously furnished in writing to the Trustee by the Company. Section 1.6 Notice to Holders of Securities; Waiver. (a) Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of Securities of any event, such notice shall be sufficiently given to Holders if in writing and mailed, first-class postage prepaid or delivered by an overnight delivery service, or transmitted by telecopy or other electronic means, with written confirmation of transmission, to each Holder of a Security affected by such event, at the address of such Holder as it appears in the Security Register, not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice. (b) Neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Security shall affect the sufficiency of such notice with respect to other Holders of Securities. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification to Holders of Securities as shall be made with the approval of the Trustee, which approval shall not be unreasonably withheld, shall constitute a sufficient notification to such Holders for every purpose hereunder. 17 (c) Such notice shall be deemed to have been given three days after mailing, if by mail, one day after mailing if by overnight courier, and on the date the notice is furnished if by telecopy or other electronic means or by hand. (d) Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders of Securities shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 1.7 Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 1.8 Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. Section 1.9 Separability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 1.10 Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors and assigns hereunder and the Holders of Securities, any benefit or legal or equitable right, remedy or claim under this Indenture. Section 1.11 Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Section 1.12 Legal Holidays. In any case where any Interest Payment Date, Redemption Date, Repurchase Date or Stated Maturity of any Security or the last day on which a Holder of a Security has a right to convert his Security shall not be a Business Day at a Place of Payment or Place of Conversion, as the case may be, then (notwithstanding any other provision of this Indenture or of the Securities) payment of principal amount of or Interest on, or the payment of the Redemption Price or Repurchase Price (whether the same is payable in cash or in shares of Common Stock or a combination of cash and stock in the case of the Repurchase Price) with respect to, or delivery for conversion of, such Security need not be made at such Place of Payment or Place of Conversion, as the case may be, on or by such day, but may be made on or by the next succeeding Business Day at such Place of Payment or Place of Conversion, as the case may be, with the same force and effect as if made on the Interest Payment Date, Redemption Date or Repurchase Date, or at the Stated Maturity or by such last day for conversion; provided, however, that in the case that payment is made on such succeeding Business Day, no Interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date, Repurchase Date, Stated Maturity or last day for conversion, as the case may be. 18 Section 1.13 Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. Until such time as this Indenture shall be qualified under the Trust Indenture Act, this Indenture, the Company and the Trustee shall be deemed for all purposes hereof to be subject to and governed by the Trust Indenture Act to the same extent as would be the case if this Indenture were so qualified on the date hereof. ARTICLE II SECURITY FORMS Section 2.1 Form Generally. (a) The Securities shall be in substantially the form set forth in this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange, the Internal Revenue Code of 1986, as amended, and regulations thereunder (the "Code"), or as may, consistent herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. All Securities shall be in fully registered form. (b) The Trustee's certificates of authentication shall be in substantially the form set forth in Section 2.3. (c) Conversion notices shall be in substantially the form set forth in Section 2.4. (d) Repurchase notices shall be substantially in the form set forth in Section 2.2. (e) The Securities shall be printed, lithographed, typewritten or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any automated quotation system or securities exchange (including on steel engraved borders if so required by any securities exchange upon which the Securities may be listed) on which the Securities may be quoted or listed, as the case may be, all as determined by the officers executing such Securities, as evidenced by their execution thereof. (f) Upon their original issuance, Securities issued as contemplated by the Purchase Agreement to Qualified Institutional Buyers in reliance on Rule 144A shall be issued in the form of a Global Security in fully registered form without interest coupons and bearing the Restricted Securities Legend. Such Global Security shall be registered in the name of DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian for DTC, for credit by DTC to the respective accounts of beneficial owners of the Securities represented thereby (or such other accounts as they may direct). Such Global Security, together with its Successor 19 Securities which are Global Securities, are collectively herein called the "Restricted Global Security." Section 2.2 Form of Security. [FORM OF FACE] [THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED SECURITY: THIS SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF SECTIONS 1272, 1273, AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. IN ADDITION, THIS SECURITY IS SUBJECT TO THE RULES FOR DEBT INSTRUMENTS WITH CONTINGENT PAYMENTS UNDER TREASURY REGULATIONS SECTION 1.1275-4(b). THE COMPANY AGREES, AND BY PURCHASING A BENEFICIAL OWNERSHIP INTEREST IN THE SECURITIES EACH HOLDER OF SECURITIES WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THE SECURITIES AS INDEBTEDNESS THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE "CONTINGENT PAYMENT REGULATIONS") AND, FOR PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, TO TREAT THE FAIR MARKET VALUE OF ANY STOCK BENEFICIALLY RECEIVED BY A BENEFICIAL HOLDER UPON ANY CONVERSION OF THE SECURITIES AS A CONTINGENT PAYMENT, (2) TO ACCRUE INTEREST WITH RESPECT TO THE SECURITIES AS ORIGINAL ISSUE DISCOUNT ON A CONSTANT YIELD BASIS USING THE COMPARABLE YIELD OF 7.375% PER ANNUM COMPOUNDED SEMI-ANNUALLY AND (3) TO BE BOUND BY THE COMPANY'S DETERMINATION OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THE SECURITIES. THE COMPANY AGREES TO PROVIDE PROMPTLY TO HOLDER OF SECURITIES, UPON WRITTEN REQUEST, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE COMPANY AT THE FOLLOWING ADDRESS: CONSECO, INC., 11825 N. PENNSYLVANIA STREET, CARMEL, INDIANA 46032, ATTENTION: INVESTOR RELATIONS. THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER ("RULE 144A"). 20 THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a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onseco, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company," which term includes any successor Person under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to_____________________, or registered assigns, the principal sum of ____________________ United States Dollars (U.S.$___) [if this Security is a Global Security, then insert - (which principal amount may from time to time be increased or decreased to such other principal amounts (which, taken together with the principal amounts of all other Outstanding Securities, shall not exceed $330,000,000) by adjustments made on the records of the Trustee hereinafter referred to in accordance with the Indenture)] on September 30, 2035 and to pay Interest (including Contingent Interest and Additional Interest) thereon as described below. Regular Interest will accrue on this Security at the rate of 3.50% per annum, from August 15, 2005, or from the most recent Interest Payment Date (as defined below) to which Regular Interest has been paid or duly provided for, semi-annually in arrears on March 31 and September 30 in each year (each, an "Interest Payment Date"), commencing March 31, 2006. This Security will cease to accrue Regular Interest as of September 29, 2010. The Company generally will not pay accrued and unpaid Regular Interest on this Security upon conversion hereof. On and after September 30, 2010, Contingent Interest will accrue on this Security during any six-month period from and including March 31 to and including September 29 or from and including September 30 to and including March 30 ("Interest Period") beginning with the six-month Interest Period commencing on or after September 30, 2010, if the average Trading Price per Security for the five consecutive Trading Day period immediately preceding the first day of the applicable Interest Period (the "Measurement Period") equals or exceeds 120% of the Accreted Principal Amount of such Security as of the last day of the Measurement Period. The amount of Contingent Interest payable in any Interest Period shall equal 0.25% of the average Trading Price per Security for the applicable Measurement Period. 22 The Company generally will not pay accrued and unpaid Contingent Interest on this Security upon conversion hereof. Up to and including September 29, 2010, the accreted principal amount (the "Accreted Principal Amount") of a Security will be equal to the Initial Principal Amount of that Security. Beginning on September 30, 2010, the principal amount shall accrete daily at the rate of 3.50% per annum, computed on a semi-annual bond-equivalent yield basis (the Accreted Principal Amount will compound semi-annually). The following table sets forth the Accreted Principal Amounts as of the specified dates during the period from September 30, 2010 to the Maturity Date:
Date Accreted Principal Amount September 30, 2010.................................. $1,000.00 March 31, 2011...................................... $1,017.50 September 30, 2011.................................. $1,035.31 March 31, 2012...................................... $1,053.43 September 30, 2012.................................. $1,071.87 March 31, 2013...................................... $1,090.63 September 30, 2013.................................. $1,109.72 March 31, 2014...................................... $1,129.14 September 30, 2014.................................. $1,148.90 March 31, 2015...................................... $1,169.01 September 30, 2015.................................. $1,189.47 March 31, 2016...................................... $1,210.29 September 30, 2016.................................. $1,231.47 March 31, 2017...................................... $1,253.02 September 30, 2017.................................. $1,274.95 March 31, 2018...................................... $1,297.26 September 30, 2018.................................. $1,319.96 March 31, 2019...................................... $1,343.06 September 30, 2019.................................. $1,366.56 March 31, 2020...................................... $1,390.47 September 30, 2020.................................. $1,414.80 March 31, 2021...................................... $1,439.56 September 30, 2021.................................. $1,464.75 March 31, 2022...................................... $1,490.38 September 30, 2022.................................. $1,516.46 March 31, 2023...................................... $1,543.00 September 30, 2023.................................. $1,570.00 March 31, 2024...................................... $1,597.48 September 30, 2024.................................. $1,625.44 March 31, 2025...................................... $1,653.89 September 30, 2025.................................. $1,682.83 March 31, 2026...................................... $1,712.28 September 30, 2026.................................. $1,742.24 March 31, 2027...................................... $1,772.73
23 September 30, 2027.................................. $1,803.75 March 31, 2028...................................... $1,835.32 September 30, 2028.................................. $1,867.44 March 31, 2029...................................... $1,900.12 September 30, 2029.................................. $1,933.37 March 31, 2030...................................... $1,967.20 September 30, 2030.................................. $2,001.63 March 31, 2031...................................... $2,036.66 September 30, 2031.................................. $2,072.30 March 31, 2032...................................... $2,108.57 September 30, 2032.................................. $2,145.47 March 31, 2033...................................... $2,183.02 September 30, 2033.................................. $2,221.22 March 31, 2034...................................... $2,260.09 September 30, 2034.................................. $2,299.64 March 31, 2035...................................... $2,339.88 September 30, 2035.................................. $2,380.83
Payments on the Securities will be made in U.S. dollars at the office of the Trustee; provided that the Company may elect to make payments by check mailed to the Holder's registered address or, with respect to Global Securities, by wire transfer. In the event any Holder surrenders any Security for conversion during the period between the close of business on a Record Date but prior to the corresponding Interest Payment Date, the Company shall pay accrued Interest on such Security on that Interest Payment Date to the Holder of such Security as of such Record Date. However, the Holder surrendering the Security for conversion shall be required to pay to the Company an amount equal to the Interest that has accrued as of such Interest Payment Date and that amount will be paid to the Holder of such Security as of the Record Date pursuant to the preceding sentence. Notwithstanding the foregoing, the preceding sentence does not apply to Securities that are surrendered for conversion after the Company has specified a Redemption Date that is after a Record Date but on or prior to the corresponding Interest Payment Date. The Company agrees, and by acceptance of a beneficial ownership in the Securities each Holder of the Securities has agreed, for United States federal income tax purposes, (a) to treat the Securities as "contingent payment debt instruments" as defined in Treasury Regulations Section 1.1275-4 (the "Contingent Payment Regulations") and, for purposes of the Contingent Payment Regulations, to treat the Fair Market Value of any Common Stock beneficially received by a beneficial owner upon conversion of the Securities as a contingent payment; (b) to accrue interest with respect to the Securities as original issue discount on a constant yield basis using the comparable yield of 7.375% per annum compounded semi-annually; and (c) to be bound by the "comparable yield" and the "projected payment schedule" within the meaning of the Contingent Payment Regulations, as determined by the Company. A Holder or beneficial owner of Securities may obtain the issue price, issue date, comparable yield and projected payment schedule by submitting a written request to the Company at the following address: Conseco Inc., 11825 N. Pennsylvania Street, Carmel, Indiana 46032, Attention: Investor Relations. 24 Except as specifically provided herein and in the Indenture, the Company shall not be required to make any payment with respect to any tax, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority thereof or therein. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof or an Authenticating Agent by the manual signature of one of their respective authorized signatories, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this Security to be duly executed. CONSECO, INC. By:________________________ Name: Title: 25 [FORM OF REVERSE] This Security is one of a duly authorized issue of securities of the Company designated as its "3.50% Convertible Debentures due September 30, 2035" (herein called the "Securities"), limited in aggregate principal amount to U.S. $330,000,000, issued and to be issued under an Indenture, dated as of August 15, 2005 (herein called the "Indenture"), between the Company and The Bank of New York Trust Company, N.A., as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. As provided in the Indenture and subject to certain limitations therein set forth, Securities are convertible into Conversion Consideration. No sinking fund is provided for the Securities. The Securities are subject to redemption at the option of the Company at any time on or after October 5, 2010, in whole or in part, upon not less than 30 nor more than 60 days' notice to the Holders prior to the Redemption Date at a Redemption Price equal to 100% of the Accreted Principal Amount, plus accrued and unpaid interest (including Regular Interest, Contingent Interest, and Additional Interest, as applicable, together "Interest") to, but excluding, the Redemption Date. In the event of a redemption of the Securities, the Company will not be required (a) to register the transfer or exchange of any Security for a period beginning at the opening of business 15 days immediately preceding the mailing of a Redemption Notice and ending on the close of business on the day of such mailing or (b) to register the transfer or exchange of any Security, or portion thereof, called for redemption (except the unredeemed portion of a Security being redeemed in part). Subject to and upon compliance with the provisions of the Indenture, the Holder of this Security is entitled to require the Company to repurchase this Security on September 30, 2010, 2015, 2020, 2025 and 2030. The repurchase price payable on any Repurchase Date will be equal to 100% of the Accreted Principal Amount of the Securities to be repurchased, plus accrued and unpaid Interest to, but not including, the applicable Repurchase Date. A Holder may withdraw any repurchase notice by delivering a written notice of withdrawal to the Paying Agent prior to the close of business on the second Business Day immediately preceding the Repurchase Date. The notice of withdrawal must state: (i) the principal amount of the Securities being withdrawn; (ii) if certificated, the certificate numbers of the Securities being withdrawn; and (iii) the Initial Principal Amount of the Securities that remain subject to the Repurchase Notice. If this Security is a Registrable Security (as defined in the Indenture), then the Holder of this Security [if this security is a global security, then insert - (including any Person that has a beneficial interest in this Security)] and the Common Stock of the Company issuable upon 26 conversion hereof is entitled to the benefits of a Registration Rights Agreement, dated as of August 15, 2005 (the "Registration Rights Agreement"), between the Company and the Initial Purchasers. Pursuant to the Registration Rights Agreement, the Company has agreed for the benefit of the Holders from time to time of the Registrable Securities that it will, at its expense, among other things, and as more fully provided in such agreement, file a shelf registration statement (the "Shelf Registration Statement") with the Commission with respect to resales of the Registrable Securities and maintain such Shelf Registration Statement effective under the Securities Act for a specified period (the "Effectiveness Period"). The Company will be permitted to suspend the use of the prospectus which is part of the Shelf Registration Statement during certain periods of time as provided in the Registration Rights Agreement. If (a) on or prior to the 90th day following August 15, 2005, a Shelf Registration Statement has not been filed with the Commission, or (b) on or prior to the 210th day following August 15, 2005, such Shelf Registration Statement is not declared effective (each, a "Registration Default"), additional interest ("Additional Interest") will accrue on this Restricted Security from and including the day following such Registration Default to but excluding the day on which such Registration Default has been cured. Additional Interest will be paid semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date, as applicable, in respect of the Restricted Securities following the date on which such Additional Interest begin to accrue, and will accrue at a rate per annum equal to one-quarter of one percent (0.25%) of the principal amount of the Restricted Securities to and including the 90th day following such Registration Default and at a rate per annum equal to one-half of one percent (0.50%) thereof from and after the 91st day following such Registration Default. Pursuant to the Registration Rights Agreement, in the event that the Shelf Registration Statement ceases to be effective (or the Holders of Registrable Securities are otherwise prevented or restricted by the Company from effecting sales pursuant thereto) (an "Effective Failure") during the Effectiveness Period for more than 30 days, whether or not consecutive, during any 90-day period or for more than 90 days, whether or not consecutive, during any 12-month period, then the Additional Interest will accrue at a rate per annum equal to an additional one-half of one percent (0.50%) of the principal amount of the Restricted Securities from the 31st day of the applicable 90-day period or the 91st day of the applicable 12-month period until the earlier of (i) such time as the Effective Failure is cured or (ii) the Effectiveness Period expires. Whenever in this Security there is a reference, in any context, to the payment of the principal amount of or Interest on, or in respect of, any Security, such mention shall be deemed to include mention of the payment of Additional Interest payable as described in the immediately preceding paragraph to the extent that, in such context, Additional Interest is, was or would be payable in respect of such Security and express mention of the payment of Additional Interest (if applicable) in any provisions of this Security shall not be construed as excluding Additional Interest in those provisions of this Security where such express mention is not made. If this Security is a Registrable Security and the Holder of this Security [if this security is a global security, then insert - (including any Person that has a beneficial interest in this security)] elects to sell this Security pursuant to the Shelf Registration Statement then, by its acceptance hereof, such Holder of this Security agrees to be bound by the terms of the Registration Rights Agreement relating to the Registrable Securities which are the subject of such election. 27 [The following paragraph shall appear in each Global Security: In the event of a deposit or withdrawal of an interest in this Security, including an exchange, transfer, redemption, repurchase or conversion of this Security in part only, the Trustee, as custodian of the Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in accordance with the Applicable Procedures.] [The following paragraph shall appear in each Security that is not a Global Security: In the event of redemption, repurchase or conversion of this Security in part only, a new Security or Securities for the unredeemed, unrepurchased or unconverted portion hereof will be issued in the name of the Holder hereof.] If an Event of Default shall occur and be continuing, the principal amounts of all the Securities, together with accrued Interest to the date of declaration, may be declared due and payable in the manner and with the effect provided in the Indenture. Upon payment (a) of the principal amounts so declared due and payable, together with accrued Interest to the date of declaration, and (b) of Interest on any overdue principal and, to the extent permitted by applicable law, overdue interest, all of the Company's obligations in respect of the payment of the principal of and Interest on the Securities shall terminate. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with either (a) the written consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding, or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of at least a majority in aggregate principal amount of the Outstanding Securities represented and entitled to vote at such meeting. The Indenture also contains provisions permitting the Holders of specified percentages in principal amounts of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued in exchange therefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Security or such other Security. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee, the Holder or Holders shall have offered indemnity satisfactory to the Trustee, the Trustee shall not have received from the Holders of a majority in principal amount of the Securities Outstanding a direction inconsistent with such request, and the Trustee shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity. The 28 foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal amount hereof or Interest hereon on or after the respective due dates expressed herein or for the enforcement of the right to convert this Security as provided in the Indenture. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal amount of and Interest on this Security at the times, places and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable on the Security Register upon surrender of this Security for registration of transfer at the Corporate Trust Office of the Trustee or at such other office or agency of the Company as may be designated by it for such purpose in the Borough of Manhattan, The City of New York (which shall initially be an office or agency of the Trustee), or at such other offices or agencies as the Company may designate, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees by the Registrar. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to recover any tax or other governmental charge payable in connection therewith. Prior to due presentation of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner thereof for all purposes, whether or not such Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. No recourse for the payment of the principal amount of or Interest on this Security and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of consideration for the issue hereof, expressly waived and released. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. In the event of a conflict between this Security and the Indenture, the terms of the Indenture shall govern. 29 ABBREVIATIONS The following abbreviations, when used in the inscription of the face of this Security, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM: as tenant-in-common TEN ENT as tenants by the entireties JT TEN as joint tenants with right of survivorship and not as tenants-in-common UNIF GIFT MIN ACT: Custodian under Uniform Gifts to Minors Act ___ (State) Additional abbreviations may also be used though not in the above list. 30 ELECTION OF HOLDER TO REQUIRE REPURCHASE (1) Pursuant to Article XIII of the Indenture, the undersigned hereby elects to have this Security repurchased by the Company. (2) The undersigned hereby directs the Trustee or the Company to pay it or ___the repurchase price as set forth in the Indenture. Dated: ------------------------------ ------------------------------ Signature(s) Signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934. ------------------------------ Signature Guaranteed Initial Principal Amount to be repurchased (at least U.S. $1,000 or an integral multiple of $1,000 in excess thereof): ------------------------------ Remaining Initial Principal Amount following such repurchase (not less than U.S. $1,000): ------------------------------ NOTICE: The signature to the foregoing Election must correspond to the Name as written upon the face of this Security in every particular, without alteration or any change whatsoever. Section 2.3 Form of Certificate of Authentication. The Trustee's certificate of authentication shall be in substantially the following form: This is one of the Securities referred to in the within-mentioned Indenture. Dated:________ The Bank of New York Trust Company, N.A., as Trustee By: --------------------------- Authorized Signatory 31 Section 2.4 Form of Conversion Notice. CONVERSION NOTICE The undersigned Holder of this Security hereby irrevocably exercises the option to convert this Security, or any portion of the principal amount hereof (which is U.S. $1,000 or an integral multiple of U.S. $1,000 in excess thereof; provided that, the unconverted portion of such principal amount is equal to or in excess of U.S. $1,000) below designated, into the Conversion Consideration in accordance with the terms of the Indenture referred to in this Security, and directs that such Conversion Consideration, be delivered to and be registered in the name of the undersigned unless a different name has been indicated below. If shares of Common Stock or Securities are to be registered in the name of a Person other than the undersigned, (a) the undersigned will pay all transfer taxes payable with respect thereto and (b) signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934. Any amount required to be paid by the undersigned on account of Interest accompanies this Security. Dated: ------------------------------ Signature(s) If shares or Securities are to be registered in the name of a Person other than the Holder, please print such Person's name and address: - -------------------------------- (Name) - -------------------------------- (Address) - -------------------------------- Social Security or other Identification Number, if any Signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad -15 under the Securities Exchange Act of 1934. - -------------------------------- [Signature Guaranteed] If only a portion of the Securities is to be converted, please indicate: 32 1. Principal amount to be converted: U.S. $ ___ 2. Principal amount and denomination of Securities representing unconverted principal amount to be issued: Amount: U.S. $___Denominations: U.S. $___ (U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof; provided that, the unconverted portion of such principal amount is equal to or in excess of U.S. $1,000) Section 2.5 Form of Assignment. For value received ___hereby sell(s), assign(s) and transfer(s) unto ___(Please insert social security or other identifying number of assignee) the within Security, and hereby irrevocably constitutes and appoints ___as attorney to transfer the said Security on the books of the Company, with full power of substitution in the premises. Dated: ------------------------------ Signature(s) Signature(s) must be guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934. ------------------------------ Signature Guaranteed 33 ARTICLE III THE SECURITIES Section 3.1 Title and Terms. (a) The aggregate Initial Principal Amount of Securities that may be authenticated and delivered under this Indenture is limited to U.S. $330.0 million, except for Securities authenticated and delivered pursuant to Section 3.5, 3.6, 3.7, 8.5, 12.5 or 12.6 in exchange for, or in lieu of, other Securities previously authenticated and delivered under this Indenture. (b) The Securities shall be known and designated as the "3.50% Convertible Debentures due September 30, 2035" of the Company. Their Stated Maturity shall be September 30, 2035 and they shall bear Regular Interest on their principal amount from August 15, 2005 through September 29, 2010; provided that the Securities will cease to accrue Regular Interest as of September 30, 2010. (c) Commencing on or after September 30, 2010, Contingent Interest shall be paid, if applicable, in accordance with Section 3.9 below. (d) Commencing September 30, 2010, the Accreted Principal Amount shall increase in accordance with Section 3.10 below. (e) The principal amount of and Interest on the Securities shall be payable as provided in Sections 3.2, 3.8, 3.9, 3.10, 3.11 and Articles XI and XIII of this Indenture and the Repurchase Price shall be payable at such places as are identified in the notice of the Company given pursuant to Section 13.1 (any city in which any Paying Agent is located being herein called a "Place of Payment"). (f) The Registrable Securities are entitled to the benefits of a Registration Rights Agreement as provided by Section 10.12 and in the form of Security set forth in Section 2.2. The Securities are entitled to the payment of Additional Interest as provided by Section 3.11. (g) The Securities shall be convertible as provided in Article XII (any city in which any Conversion Agent is located being herein called a "Place of Conversion"). (h) The Securities shall be subject to repurchase by the Company at the option of the Holders as provided in Article XIII. Section 3.2 Maturity, Interest and Principal Payments Generally. (a) The Securities will mature on September 30, 2035, and Holders will be entitled to receive the Accreted Principal Amount of their Securities on that date, unless the Securities were earlier redeemed, repurchased or converted pursuant to the terms of this Indenture. 34 (b) In the event that any Interest becomes payable on the Securities, a Holder of any Security at the close of business on a Record Date shall be entitled to receive such Interest on the corresponding Interest Payment Date; provided, however, that: (i) Subject to Section 12.6, the Company will not pay accrued Interest on Securities surrendered for conversion and upon payment by or on behalf of the Company of the Conversion Consideration with respect thereto the Company shall satisfy its obligations with respect to the Securities, including the payment of the principal amount and any such accrued Interest, such amounts being deemed to have been paid in full rather than cancelled, extinguished or forfeited by receipt of Conversion Consideration; provided that, Additional Interest will be payable as specified in the Registration Rights Agreement and this Indenture; and (ii) all Interest will be paid to a Person other than the Holder of a Security on a Record Date if the Company redeems the Security on a date that is after such Record Date and on or prior to the corresponding Interest Payment Date, in which case accrued and unpaid Interest on the Security being redeemed to, but excluding, the Redemption Date will be paid to the same Person to whom the principal amount of such Security is paid. (c) Except as provided below, the Company will pay Interest on: (i) any Global Security to the Depositary therefor in immediately available funds; and (ii) any certificated Securities by check mailed to the Holders of those Securities. (d) At maturity, Interest on any certificated Securities will be payable at the office of the Trustee. (e) Payments on the Securities will be made in U.S. dollars at the office of the Trustee; provided that, the Company may elect to make payments by check mailed to the Holder's registered address or, with respect to Global Securities, by wire transfer in immediately available funds. Section 3.3 Denominations. The Securities shall be issuable only in registered form, without coupons, in denominations of U.S. $1,000 Initial Principal Amount and integral multiples of U.S. $1,000 in excess thereof. Section 3.4 Execution, Authentication, Delivery and Dating. (a) The Securities shall be executed on behalf of the Company by its Chairman of the Board, its President or Chief Executive Officer, or one of its Vice Presidents. Any such signature may be manual or facsimile. (b) Securities bearing the manual or facsimile signature of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. 35 (c) At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee or to its order for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with such Company Order shall authenticate and make available for delivery such Securities as in this Indenture provided. (d) Each Security shall be dated the date of its authentication. (e) No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature of an authorized signatory, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Section 3.5 Global Securities; Non-global Securities; Book-entry Provisions. Global Securities. (a) (a) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated by the Company for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture. (b) Except for exchanges of Global Securities for definitive, non-Global Securities at the sole discretion of the Company, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (i) such Depositary (A) has notified the Company that it is unwilling, unable or no longer qualified to continue as Depositary for such Global Security or (B) has ceased to be a clearing agency registered as such under the Exchange Act or announces an intention permanently to cease business or does in fact do so or (ii) there shall have occurred and be continuing an Event of Default with respect to such Global Security. In the event clause (i)(A) of the immediately preceding sentence is applicable, if a successor Depositary for such Global Security is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company will execute, and the Trustee, upon receipt of a Company Order, accompanied by an Officers' Certificate, directing the authentication and delivery of Securities, will authenticate and deliver, Securities, in any authorized denominations in an aggregate principal amount equal to the principal amount of such Global Security in exchange for such Global Security. (c) If any Global Security is to be exchanged for other Securities or canceled in whole, it shall be surrendered by or on behalf of the Depositary or its nominee to the Trustee, as Security Registrar, for exchange or cancellation, as provided in this Article III. If any Global Security is to be exchanged for other Securities or canceled in part, or if another Security is to be exchanged in whole or in part for a beneficial interest in any Global Security, in each case, as provided in Section 3.6, then either (i) such Global Security shall be so surrendered for exchange or cancellation, as provided in this Article III, or (ii) the principal amount thereof shall be reduced or increased by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such other Security to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records 36 of the Trustee, as Security Registrar, whereupon the Trustee, in accordance with the Applicable Procedures, shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Security, the Trustee shall authenticate and deliver any Securities issuable in exchange for such Global Security (or any portion thereof) to or upon the order of, and registered in such names as may be directed by, the Depositary or its authorized representative. Upon the request of the Trustee in connection with the occurrence of any of the events specified in the preceding paragraph, the Company shall promptly make available to the Trustee a reasonable supply of Securities that are not in the form of Global Securities. The Trustee shall, subject to Section 3.6(h), be entitled to rely upon any order, direction or request of the Depositary or its authorized representative which is given or made pursuant to this Article III if such order, direction or request is given or made in accordance with the Applicable Procedures. (d) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Article III or otherwise, shall be authenticated and delivered in the form of, and shall be, a registered Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof, in which case such Security shall be authenticated and delivered in definitive, fully registered form, without interest coupons. (e) The Depositary or its nominee, as registered owner of a Global Security, shall be the Holder of such Global Security for all purposes under the Indenture and the Securities, and owners of beneficial interests in a Global Security shall hold such interests pursuant to the Applicable Procedures. Accordingly, any such owner's beneficial interest in a Global Security will be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Agent Members and such owners of beneficial interests in a Global Security will not be considered the owners or holders thereof. Non-global Securities. Securities issued upon the events described in Section 3.5(b) shall be in definitive, fully registered form, without interest coupons, and shall bear the Restricted Securities Legend if and as required by this Indenture. Section 3.6 Registration; Registration of Transfer and Exchange; Restrictions on Transfer. (a) The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers and exchanges of Securities as herein provided. (b) Upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 10.2 for such purpose, the Company shall execute, and, upon receipt of a Company Order, the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture. 37 (c) At the option of the Holder, and subject to the other provisions of this Section, Securities may be exchanged for other Securities of any authorized denomination and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at any such office or agency. Whenever any Securities are so surrendered for exchange, and subject to the other provisions of this Section, the Company shall execute and, upon receipt of a Company Order, the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Security Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. (d) All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt and entitled to the same benefits under this Indenture as the Securities surrendered upon such registration of transfer or exchange. (e) No service charge shall be charged to a Holder for any registration of transfer or exchange of Securities except as provided in Section 3.7, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.5, 3.6, 3.7, 8.5, 12.5 or 12.6 (other than where the shares of Common Stock are to be issued or delivered in a name other than that of the Holder of the Security) not involving any transfer and other than any stamp and other duties, if any, which may be imposed in connection with any such transfer or exchange by the United States or any political subdivision thereof or therein, which shall be paid by the Company. (f) In the event of a redemption of the Securities, neither the Company nor the Securities Registrar will be required (i) to register the transfer or exchange of any Security for a period of beginning at the opening of business 15 days immediately preceding the mailing of a Redemption Notice and ending on the close of business on the day of such mailing or (ii) to register the transfer or exchange of any Security, or portion thereof, called for redemption (except the unredeemed portion of a Security being redeemed in part). (g) Certain Transfers and Exchanges. Notwithstanding any other provision of this Indenture or the Securities, transfers and exchanges of Securities and beneficial interests in a Global Security of the kinds specified in this Section shall be made only in accordance with this Section. (i) Restricted Global Security to Restricted Non-Global Security. In the event that non-Global Securities are to be issued pursuant to Section 3.5(b) in connection with any transfer of Securities, such transfer may be effected only in accordance with the provisions of this clause and subject to the Applicable Procedures. Upon receipt by the Trustee, as Security Registrar, of (A) a Company Order from the Company directing the Trustee, as Security Registrar, to (x) authenticate and deliver one or more Securities of the same aggregate principal amount as the beneficial interest in the Restricted Global Security to be transferred, such instructions to contain the name or names of the designated transferee or transferees, the 38 authorized denomination or denominations of the Securities to be so issued and appropriate delivery instructions and (y) decrease the beneficial interest of a specified Agent Member's account in a Restricted Global Security by a specified principal amount not greater than the principal amount of such Restricted Global Security, and (B) such other certifications, legal opinions or other information as the Company or the Trustee may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, then the Trustee, as Security Registrar, shall decrease the principal amount of the Restricted Global Security by the specified amount and authenticate and deliver Securities in accordance with such instructions from the Company as provided in Section 3.5(c). (ii) Restricted Non-Global Security to Restricted Global Security. If the Holder of a Restricted Security (other than a Global Security) wishes at any time to transfer all or any portion of such Restricted Security to a Person who wishes to take delivery thereof in the form of a beneficial interest in the Restricted Global Security, such transfer may be effected only in accordance with the provisions of this clause and subject to the Applicable Procedures. Upon receipt by the Trustee, as Security Registrar, of such Restricted Security as provided in this Section and instructions from the Company directing that a beneficial interest in the Restricted Global Security in a specified principal amount not greater than the principal amount of such Security be credited to a specified Agent Member's account, then the Trustee, as Security Registrar, shall cancel such Restricted Security (and issue a new Restricted Security in respect of any untransferred portion thereof) as provided in this Section and increase the principal amount of the Restricted Global Security by the specified principal amount as provided in Section 3.5(c). (iii) Exchanges Between Global Security and Non-global Security. A beneficial interest in a Global Security may be exchanged for a Security that is not a Global Security only as provided in Section 3.5(b); provided that, if such interest is a beneficial interest in the Restricted Global Security, then such interest shall be exchanged for a Restricted Security (subject in each case to clause (h) below. A Security that is not a Global Security may be exchanged for a beneficial interest in a Global Security only if such exchange occurs in connection with a transfer effected in accordance with clause (g)(ii) above. (h) Securities Act Legends. All Securities issued pursuant to this Indenture, and all Successor Securities, shall bear the Restricted Securities Legend and shall be subject to the restrictions on transfer specified therein, subject to the following: (i) subject to the following clauses of this Section, a Security or any portion thereof which is exchanged, upon transfer or otherwise, for a Global Security or any portion thereof shall bear the Restricted Securities Legend borne by such Global Security for which the Security was exchanged; (ii) subject to the following clauses of this Section 3.6, a new Security that is not a Global Security and is issued in exchange for another Security (including a Global Security) or any portion thereof, upon transfer or otherwise, shall bear the Restricted Securities Legend borne by the Security for which the new Security was exchanged; 39 (iii) any Securities that are sold or otherwise disposed of pursuant to an effective registration statement under the Securities Act (including the Shelf Registration Statement), together with their Successor Securities shall not bear a Restricted Securities Legend; the Company shall inform the Trustee in writing of the effective date of any such registration statement registering the Securities under the Securities Act and shall notify the Trustee, in writing, at any time when prospectuses must be delivered with respect to Securities to be sold pursuant to such registration statement. The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the aforementioned registration statement and instructions; (iv) at any time after the Securities may be freely transferred without registration under the Securities Act or without being subject to transfer restrictions pursuant to the Securities Act, a new Security that does not bear a Restricted Securities Legend may be issued in exchange for or in lieu of a Security (other than a Global Security) or any portion thereof that bears such a legend if the Trustee has received an Unrestricted Securities Certificate, satisfactory to the Trustee and duly executed by the Holder of such Security bearing a Restricted Securities Legend or his attorney duly authorized in writing, and after such date and receipt of such certificate, upon receipt of a Company Order, the Trustee shall authenticate and deliver such new Security in exchange for or in lieu of such other Security as provided in this Article III; (v) a new Security that does not bear a Restricted Securities Legend may be issued in exchange for or in lieu of a Security or any portion thereof that bears such a legend if, in the Company's judgment, placing such a legend upon such new Security is not necessary to ensure compliance with the registration requirements of the Securities Act, and the Trustee, at the direction of the Company, shall authenticate and deliver such a new Security as provided in this Article III; and (vi) notwithstanding the foregoing provisions of this Section 3.6, a Successor Security of a Security that does not bear a Restricted Securities Legend shall not bear such legend unless the Company has reasonable cause to believe that such Successor Security is a "restricted security" within the meaning of Rule 144, in which case the Trustee, at the direction of the Company, shall authenticate and deliver a new Security bearing a Restricted Securities Legend in exchange for such Successor Security as provided in this Article III. (i) Any stock certificate representing shares of Common Stock issued upon conversion of the Securities shall bear the Restricted Securities Legend borne by such Securities, to the extent required by this Indenture, unless such shares of Common Stock have been sold pursuant to a registration statement that has been declared effective under the Securities Act (and that continues to be effective at the time of such transfer) or sold pursuant to Rule 144(k) of the Securities Act, or unless otherwise agreed by the Company in writing with written notice thereof to the transfer agent for the Common Stock. With respect to the transfer of shares of Common Stock issued upon conversion of the Securities that are restricted hereunder, any deliveries of certificates, legal opinions or other instruments that would be required to be made to the Security Registrar in the case of a transfer of Securities, as described above, shall instead be made to the transfer agent for the Common Stock. 40 (j) Neither the Trustee, the Paying Agent nor any of their agents shall (i) have any duty to monitor compliance with or with respect to any Federal or state or other securities or tax laws or (ii) have any duty to obtain documentation on any transfers or exchanges other than as specifically required hereunder. Section 3.7 Mutilated, Destroyed, Lost or Stolen Securities. (a) If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding. If the Holder of such lost, stolen or destroyed Security delivers to the Company and the Trustee: (i) evidence to their satisfaction of the destruction, loss or theft of any Security, and (ii) such security or indemnity as may be satisfactory to the Company and the Trustee to save each of them and any agent of either of them harmless, then, in the absence of actual notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such lost, stolen or destroyed Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding. (b) In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion, but subject to any conversion rights, may, instead of issuing a new Security, pay such Security, upon satisfaction of the conditions set forth in the preceding paragraph. (c) Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto (other than any stamp and other duties, if any, which may be imposed in connection therewith by the United States or any political subdivision thereof or therein, which shall be paid by the Company) and any other expenses (including the fees and expenses of the Trustee) connected therewith. (d) Every new Security issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and such new Security shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. (e) The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies of any Holder with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 3.8 Regular Interest. Subject to the last paragraph of Section 3.11, "Regular Interest" will accrue on the Securities at the rate of 3.50% per year during any six-month period from and including March 31 to and including September 29 and from and including September 30 to and including March 30, commencing March 31, 2006 (provided that 41 the initial Interest Period shall commence on August 15, 2005 and run to but excluding March 31, 2006). Regular Interest will be payable in arrears on September 30 and March 31 of each year (provided, however, that if such date is not a Business Day, interest will be payable on the next succeeding Business Day, and no additional interest will accrue therefor), beginning March 31, 2006, to the Holder of record at the close of business on the Regular Record Date preceding such Interest Payment Date, provided that the Securities will cease to accrue Regular Interest as of September 30, 2010. Section 3.9 Contingent Interest. (a) The Company will pay Contingent Interest to Holders during any six-month period from and including March 31 to and including September 29 or from and including September 30 to and including March 30 (each, an "Interest Period") beginning with the six-month Interest Period commencing on September 30, 2010, if the average Trading Price per Security for the five consecutive Trading Day period immediately preceding the first day of the relevant Interest Period (the "Measurement Period") equals or exceeds 120% of the Accreted Principal Amount of that Security as of the last day of such Measurement Period. (b) The amount of "Contingent Interest" payable per Security in any Interest Period pursuant to this Section shall equal 0.25% of the average Trading Price per Security for the applicable Measurement Period. (c) The Company shall pay Contingent Interest owed pursuant to this Section for any Interest Period on the Interest Payment Date immediately succeeding the applicable Interest Period, to Holders of Securities as of the Regular Record Date related to such Interest Payment Date. (d) Upon determination that the Holders of the Securities are entitled to receive Contingent Interest which may become payable during a relevant Interest Period, the Company will notify such Holders and the Trustee, will issue a Press Release containing information regarding the Contingent Interest determination and will publish the information through a public medium customary for such Press Releases. Section 3.10 Accretion. Beginning on September 30, 2010, the Initial Principal Amount shall commence increasing daily at the rate of 3.50% per annum computed on a semi-annual bond equivalent yield basis. References in this Indenture to the "principal amount" shall mean the Initial Principal Amount at any time prior to September 30, 2010 and the principal amount as adjusted upwards for accretion at any time on or after September 30, 2010 (the "Accreted Principal Amount"); provided that references to the Accreted Principal Amount shall mean the Initial Principal Amount prior to September 30, 2010. Section 3.11 Payment of Interest; Interest Rights Preserved. (a) Any Interest (including Additional Interest) on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (i) or (ii) below: 42 (i) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security, the date of the proposed payment and the Special Record Date, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements reasonably satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. The Special Record Date for the payment of such Defaulted Interest shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at such Holder's address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (ii). (ii) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. (b) Subject to the foregoing and following provisions of this Section 3.11 and Section 3.6, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to Interest accrued and unpaid, and to accrue, which were carried by such other Security. (c) Interest on any Security that is converted in accordance with Section 12.1 during a Record Date Period shall be payable in accordance with the provisions of Section 12.1. Section 3.12 Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee, any Paying Agent and any agent of the Company, the Trustee or any Paying Agent may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of the principal amount of and Interest on such Security (subject to Section 3.2 and Section 3.11) and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee, any Paying Agent nor any agent of the Company, the Trustee or any Paying Agent shall be affected by notice to the contrary. Section 3.13 Cancellation. All Securities surrendered for payment, redemption, repurchase, registration of transfer or exchange or conversion shall, if surrendered to any Person 43 other than the Trustee, be delivered to the Trustee. All Securities so delivered to the Trustee shall be canceled promptly by the Trustee (or its agent). No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section. The Trustee shall dispose of all canceled Securities in accordance with applicable law and its customary practices in effect from time to time. Section 3.14 Computation of Interest. Interest on the Securities (including any Additional Interest) shall be computed on the basis of a 360-day year of twelve 30-day months. Notwithstanding any other provision of this Indenture, the Company shall notify the Trustee in writing of the amount of any Contingent Interest or Accreted Principal Amount with respect to the Securities, and at the same time the Company shall deposit with the Trustee an amount of money equal to any such amount proposed to be paid in respect of such Contingent Interest or shall make arrangements reasonably satisfactory to the Trustee for such deposit prior to the Interest Payment Date. Section 3.15 CUSIP Numbers. The Company in issuing Securities may use "CUSIP" numbers (if then generally in use); if so, the Trustee shall use such CUSIP numbers in notices of redemption and repurchase as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such CUSIP numbers either as printed on the Securities or as contained in any notice of a redemption or repurchase and that reliance may be placed only on the serial or other identification numbers printed on the Securities, and any such redemption or repurchase shall not be affected by any defect in or omission of such CUSIP numbers. The Company will promptly notify the Trustee of any change in the CUSIP numbers. ARTICLE IV SATISFACTION AND DISCHARGE Section 4.1 Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of conversion, or registration of transfer or exchange, or replacement of Securities herein expressly provided for and any right to receive Additional Interest as provided in the Registration Rights Agreement and in the form of Security set forth in Section 2.2 and the Company's obligations to the Trustee pursuant to Section 6.7), and the Trustee, at the expense of the Company, shall execute proper instruments in form and substance reasonably satisfactory to the Trustee acknowledging satisfaction and discharge of this Indenture, when (a) Either: (i) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 3.7 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Trustee or the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or 44 (ii) all such Securities not theretofore delivered to the Trustee or its agent for cancellation (other than Securities referred to in clauses (A) and (B) of clause (a)(i) above): (A) have become due and payable, or (B) will have become due and payable at their Stated Maturity within one year, or (C) are to be called for redemption within one year under arrangements reasonably satisfactory to the Trustee for the giving of a Redemption Notice by the Trustee in the name, and at the expense, of the Company; and (iii) the Company has deposited or caused to be deposited with the Trustee as trust funds (immediately available to the Holders in the case of clause (ii)(A) above or held in trust for such purpose, in the case of clause (ii)(B) or (ii)(C) above) an amount in cash sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for the principal amount of and Interest (including any Additional Interest) to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.7, the obligations of the Company to any Authenticating Agent under Section 6.12, the obligation of the Company to pay Additional Interest, if money shall have been deposited with the Trustee pursuant to clause (a)(ii) of this Section 4.1, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 and the obligations of the Company and the Trustee under Section 3.6 and Article XII shall survive. Section 4.2 Application of Trust Money. (a) Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust for the sole benefit of the Holders, and such monies shall be applied by the Trustee, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent, to the Persons entitled thereto, of the principal amount and Interest (including any Additional Interest) for whose payment such money has been deposited with the Trustee. (b) All moneys deposited with the Trustee pursuant to Section 4.1 (and held by it or any Paying Agent) for the payment of Securities subsequently converted shall be returned to the Company. (c) The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed or assessed against all money deposited with the Trustee pursuant to Section 4.1 (other than income taxes and franchise taxes incurred or payable by the Trustee and such other taxes, fees or charges incurred or payable by the Trustee that are not directly the result of the deposit of such money with the Trustee). 45 ARTICLE V DEFAULT AND REMEDIES Section 5.1 Events of Default. (a) "Event of Default," wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it 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) default in the payment of any Interest on the Securities when it becomes due and payable, and continuance of such default for a period of 30 calendar days; (ii) default in the payment of the Accreted Principal Amount of the Securities at Maturity, upon redemption, upon repurchase or following a Fundamental Change, in each case when it becomes due and payable; (iii) default by the Company or any of its Subsidiaries in the payment of principal, interest or premium when due under any agreement or instrument relating to any other Indebtedness of the Company or any Subsidiary having an aggregate outstanding principal amount of $50.0 million (or its equivalent in any other currency or currencies) or more, and such default continues in effect for more than 30 calendar days after the expiration of any grace period or extension of time for payment applicable thereto; (iv) default by the Company of its conversion obligations upon exercise of a Holder's conversion right pursuant to Article XII hereof, unless such default is cured within five calendar days after written notice of the default is given to the Company by the Trustee or such Holder; (v) default by the Company of its obligations to give notice to the Holders of the occurrence of a Fundamental Change within the time required to give such notice; (vi) acceleration of any indebtedness under any agreement or instrument evidencing any Indebtedness of the Company or any of its Subsidiaries (other than the Securities) having an aggregate outstanding principal amount of at least $50.0 million (or its equivalent in any other currency or currencies) or more, unless such acceleration has been rescinded or annulled within 30 days after written notice of such acceleration has been received by the Company; (vii) default in the Company's performance of any other covenants or agreements contained in the Indenture or the Securities if such default exists and is continuing for 60 calendar days after written notice to the Company from the Trustee or the Holders of at least 25% in aggregate principal amount of the Outstanding Securities; (viii) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization, or other 46 similar law or (B) a decree or order adjudging the Company or any Significant Subsidiary a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment, or composition of or in respect of the Company or any Significant Subsidiary under any applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator, or other similar official of the Company or any Significant Subsidiary or of any substantial part of the property of either or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive calendar days; (ix) the commencement by the Company or any Significant Subsidiary of a voluntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization, or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by either to the entry of a decree or order for relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under any applicable Federal or state bankruptcy, insolvency, reorganization, or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against either, or the filing by either of a petition or answer or consent seeking reorganization or relief with respect to the Company or any Significant Subsidiary under any applicable Federal or state bankruptcy, insolvency, reorganization, or other similar law, or the consent by either to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator, or other similar official of the Company or any Significant Subsidiary or of any substantial part of the property of either pursuant to any such law, or the making by either of an assignment for the benefit of creditors, or the admission by either in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; (b) If an Event of Default (other than an Event of Default arising under Section 5.1(a)(viii) or (ix)) occurs and is continuing, then in every case the Trustee or the Holders of at least 25% in aggregate principal amount of the Outstanding Securities may declare the principal amount of plus accrued and unpaid Interest on all of the Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount plus accrued and unpaid Interest (including, to the extent permitted by applicable law, interest on any unpaid Interest) will become immediately due and payable. If an Event of Default under Section 5.1(a)(viii) or (ix) occurs, then the principal amount of and accrued and unpaid Interest on the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. (c) At any time after a declaration of acceleration with respect to Securities has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, if (i) all Events of Default with respect to the Securities have been cured (other than the nonpayment of principal amounts or Interest that has become due solely by reason of the declaration of acceleration) and (ii) a rescission and annulment would not conflict with any judgment or decree issued in appropriate judicial proceedings regarding the payment by the Trustee to the Holders of the amounts referred to in Section 5.1(b), then the declaration of acceleration shall be automatically annulled and rescinded. No such rescission will affect any subsequent default or impair any right consequent thereon. 47 Section 5.2 Covenant of Company to Pay to Trustee Whole Amount Due on Securities on Default in Payment of Interest or Principal; Suits for Enforcement by Trustee. (a) The Company covenants that if (i) default is made in the payment of any Interest on any Security when such Interest becomes due and payable and such default continues for a period of 30 calendar days or (ii) default is made in the payment of the principal amount of any Security when it becomes due and payable, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities and, to the extent that payment of such interest will be legally enforceable, interest on any overdue principal amount and, to the extent permitted by applicable law, on any overdue Interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as will be sufficient to cover the reasonable costs and expenses of collection, including the reasonable compensation, expenses, disbursements, and advances of the Trustee and its agents and counsel. (b) If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated. (c) If an Event of Default with respect to any Security occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. (d) In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee will be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee will be authorized to collect and receive any money or other property payable or deliverable on any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements, and advances of the Trustee and its agents and counsel, and any other amounts due the Trustee under Section 6.7. Section 5.3 Trustee May File Proof of Claim. (a) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or the creditors of either, the Trustee (irrespective of whether the principal of, and any Interest on, the Securities shall then be 48 due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or Interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (i) to file and prove a claim for the whole amount of the principal amount and Interest owing and unpaid in respect of the Securities and take such other actions, including participating as a member, voting or otherwise, of any official committee of creditors appointed in such matter, and to file such other papers or documents, in each of the foregoing cases, as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders of Securities allowed in such judicial proceeding, and (ii) to collect and receive any moneys or other property payable or deliverable on any such claim and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of Securities to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under Section 6.7. (b) Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder of a Security in any such proceeding; provided, however, that the Trustee may, on behalf of such Holders, vote for the election of a trustee in bankruptcy or similar official. Section 5.4 Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee will be brought in its own name as trustee of an express trust, and any recovery of judgment will, after provision for the payment of the reasonable compensation, expenses, disbursements, and advances of the Trustee and its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. Section 5.5 Application of Money Collected. Any money collected by the Trustee pursuant to this Article will be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of the principal amount or Interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 6.7; SECOND: To the payment of the amounts then due and unpaid for principal of and Interest (including Additional Interest) on the Securities in respect of which or for the benefit of 49 which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal amount and Interest, respectively; and THIRD: To such other Person or Persons, if any, to the extent entitled thereto; and FOURTH: To the Company. Section 5.6 Limitation on Suits. No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (b) the Holders of at least 25% in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default, appoint a receiver or pursue any other remedy hereunder, as applicable, in its own name as Trustee hereunder; (c) such Holder or Holders have offered to the Trustee and, if requested, shall have provided indemnity satisfactory to the Trustee against the costs, expenses, and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 calendar days after its receipt of such notice, request and offer of indemnity (or if requested, receipt of indemnity) has failed to institute any such proceeding; and (e) no direction inconsistent with such written request has been given to the Trustee during the 60 calendar day period referred to in Section 5.6(d) hereof by the Holders of a majority in aggregate principal amount of the Outstanding Securities, it being understood and intended that no one or more of such Holders will have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb, or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. The Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Notwithstanding the foregoing, this Section 5.6 shall not affect the right of a Holder to sue for enforcement of the payment of the principal of or Interest on its Security on or after the respective due dates in the Security or the Holder's right to convert its Securities in accordance with the provisions of this Indenture. Section 5.7 Notice of Defaults. If a default occurs hereunder with respect to Securities, the Trustee will give the Holders notice of such Event of Default of which it has actual notice within 90 calendar days of occurrence; provided, however, to the extent consistent 50 with the Trust Indenture Act, the Trustee may withhold notice of any Event of Default (except a default of the character specified in Section 5.1(a)(i) or Section 5.1(a)(ii) if the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders). The Company will give the Trustee written notice of any default that could mature into an Event of Default of the character described in Section 5.1(a)(vii) within 30 calendar days of such default and of any uncured Event of Default within 10 days after any Responsible Officer of the Company becomes aware of or receives actual notice of such Event of Default. Section 5.8 Unconditional Right of Holders to Receive Principal and Interest. Notwithstanding any other provision in this Indenture, the Holder of any Security will have the right, which is absolute and unconditional, to receive payment of the principal amount of and Interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption or repurchase, on the Redemption Date or Repurchase Date, as the case may be) and, as contemplated by Article XII, to convert such Security in accordance with its terms and to institute suit for the enforcement of any such payment, and any such right to convert and such rights may not be impaired without the consent of such Holder. Section 5.9 Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee, and the Holders will be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders will continue as though no such proceeding had been instituted. Section 5.10 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost, or stolen Securities in the last paragraph of Section 3.7, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy will, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 5.11 Delay or Omission not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default will impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 5.12 Control by Holders of Securities. The Holders of a majority in principal amount of the Outstanding Securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities; provided that, the Trustee 51 may refuse to follow any direction that conflicts with any rule of law or with this Indenture, that is prejudicial to the rights of other Holders or that would involve the Trustee in personal liability. Section 5.13 Waiver of Past Defaults. The Holders, either through the written consent of not less than a majority in principal amount of the Outstanding Securities or by the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of at least a majority in aggregate principal amount of the Outstanding Securities represented at such meeting, may, by notice to the Trustee, on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default (i) in the payment of the principal amount of or Interest (including Additional Interest) on any Security, or (ii) in respect of a covenant or provision hereof which under Article VIII cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 5.14 Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or to any suit instituted by any Holder of any Security for the enforcement of the payment of the principal amount of or Interest on any Security on or after the respective Stated Maturity or Maturities expressed in such Security (or, in the case of redemption or repurchase, on or after the Redemption Date or Repurchase Date, as the case may be) or for the enforcement of the right to convert any Security in accordance with Article XII. Section 5.15 Waiver of Stay, Usury or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, usury or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede by reason of such law the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 52 ARTICLE VI THE TRUSTEE Section 6.1 Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default, (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture, but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture, but not to verify the contents thereof. (b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (i) this paragraph (c) shall not be construed to limit the effect of paragraph (a) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and (iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power under this Indenture unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) If the Trustee becomes one of the Company's creditors, it may become subject to limitations in the indenture on its rights to obtain payment of claims or to realize on some property received for any such claim, as security or otherwise. The Trustee is permitted to 53 engage in other transactions with us. If, however, it acquires any conflicting interest, it must eliminate that conflict or resign as Trustee under this Indenture. Section 6.2 Notice of Defaults. Within 90 days after the occurrence of any default hereunder as to which the Trustee has received written notice, the Trustee shall give to all Holders of Securities, in the manner provided in Section 1.6, notice of such default, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal amount of or Interest on any Security the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders. Section 6.3 Certain Rights of Trustee. Subject to the provisions of Section 6.1: (a) the Trustee may conclusively rely, and shall be protected in acting or refraining from acting, upon any resolution, Officers' Certificate, other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document (collectively, the "Documents") believed by it to be genuine and to have been signed or presented by the proper party or parties, and the Trustee need not investigate any fact or matter stated in such Documents; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be the one specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers' Certificate or Opinion of Counsel; (d) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Securities pursuant to this Indenture, unless such Holders shall have offered, and, if requested by the Trustee, delivered to the Trustee, reasonable security against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document, but the Trustee in its discretion may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to 54 make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney and shall, absent its bad faith, incur no liability of any kind by reason of such inquiry or investigation; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (h) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder, absent bad faith on the part the of Trustee (in any such capacity) and of such agent, custodian or other Person. Section 6.4 Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities (except the Trustee's certificates of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity, sufficiency or priority of this Indenture, of the Securities or of the Common Stock issuable upon the conversion of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. Section 6.5 May Hold Securities, Act as Trustee Under Other Indentures. The Trustee, any Authenticating Agent, any Paying Agent, any Conversion Agent or any other agent of the Company or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Conversion Agent or such other agent. The Trustee may become and act as trustee under other indentures under which other securities, or certificates of interest or participation in other securities, of the Company are outstanding in the same manner as if it were not Trustee hereunder. Section 6.6 Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. Section 6.7 Compensation and Reimbursement. (a) The Company agrees: (i) to pay to the Trustee from time to time such reasonable compensation as the Company and the Trustee shall from time to time agree in writing for its acceptance of this Indenture and for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (ii) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by 55 the Trustee (including costs and expenses of enforcing this Indenture and defending itself against any claim (whether asserted by the Company, any Holder of Securities or any other Person) or liability in connection with the exercise of any of its powers or duties hereunder) in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (iii) to indemnify the Trustee (and its directors, officers, employees and agents) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs, expenses and reasonable attorneys' fees of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. (b) The Trustee shall have a lien prior to the Securities on all money or property held or controlled by the Trustee to secure the Company's payment obligations in this Section, except that held in trust to pay principal and Interest (including Additional Interest) on the Securities. (c) When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.1(a)(viii) or (ix), the expenses (including the reasonable charges of its counsel) and the compensation for the services are intended to constitute expenses of the administration under any applicable Federal or state bankruptcy, insolvency or other similar law. (d) The provisions of this Section 6.7 shall survive the termination of this Indenture or the earlier resignation or removal of the Trustee. Section 6.8 Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, and the Trustee and its parent corporation shall have (or be part of a holding company group with) a combined capital and surplus of at least U.S. $50 million, subject to supervision or examination by Federal or state authority, and in good standing. The Trustee or an Affiliate of the Trustee shall maintain an established place of business in the Borough of Manhattan, The City of New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article and a successor shall be appointed pursuant to Section 6.9. Section 6.9 Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.10. 56 (b) The Trustee may resign at any time by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been delivered to the Trustee within 30 calendar days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by an Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and the Company. If the instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been delivered to the Trustee within 30 calendar days after the giving of such notice of removal, the removed Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. (d) The Trustee may be removed at any time by the Company and the Company may appoint a successor Trustee pursuant to this Article; provided that, (i) there is not an Event of Default that is continuing at the time of removal, (ii) the successor Trustee appointed by the Company meets the eligibility requirements of Section 6.8, and (iii) such removal and resignation shall not become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.10. (e) If at any time: (i) the Trustee shall cease to be eligible under Section 6.8 and shall fail to resign after written request therefor by the Company or by any Holder of a Security who has been a bona fide Holder of a Security for at least six months, or (ii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case (i) the Company by a Board Resolution may remove the Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (f) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee and shall comply with the applicable requirements of this Section 6.9 and Section 6.10. If no successor Trustee shall have been so appointed by the Company or the Holders of Securities and accepted appointment in the manner required by this Section 6.9 and Section 6.10, any Holder of a Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (g) The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders of Securities in the manner provided in Section 1.6. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. 57 Section 6.10 Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be eligible under this Article. Section 6.11 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee (including the trust created by this Indenture), by sale or otherwise, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 6.12 Authenticating Agents. (a) The Trustee may, with the consent of the Company, appoint an Authenticating Agent or Agents acceptable to the Company with respect to the Securities, which Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon exchange or substitution pursuant to this Indenture. (b) Securities authenticated by an Authenticating Agent shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder, and every reference in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be subject to acceptance by the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent and subject to supervision or examination by government or other fiscal authority. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of 58 this Section 6.12, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section 6.12. (c) Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section 6.12, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. (d) An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be subject to acceptance by the Company. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. (e) The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. (f) If an Authenticating Agent is appointed with respect to the Securities pursuant to this Section, the Securities may have endorsed thereon, in addition to or in lieu of the Trustee's certification of authentication, an alternative certificate of authentication in the following form: This is one of the Securities referred to in the within-mentioned Indenture. THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee By: ---------------------------------- As Authenticating Agent By: ---------------------------------- As Authenticating Agent 59 Section 6.13 Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Section 6.14 Preferential Collection of Claims Against Company. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). ARTICLE VII CONSOLIDATION, MERGER, SALE OR TRANSFER Section 7.1 Company May Consolidate, Etc. Only on Certain Terms. (a) The Company shall not (i) consolidate with or merge with or into any other Person, or convey, sell, transfer or lease or otherwise dispose of all or substantially all of its assets to any other Person in any one transaction or a series of related transactions; or (ii) permit any Person to consolidate with or merge with or into the Company, unless: (i) in the case of a merger or consolidation, either the Company is the surviving Person or, if the Company is not the surviving Person, the surviving Person formed by such merger or consolidation or into which the Company is merged or consolidated or in the case of a conveyance, sale, transfer, lease or other disposition of all or substantially all of the Company's assets, the Person to which the Company's properties and assets are so transferred shall be a corporation organized and existing under the laws of the United States, any state thereof, or the District of Columbia, and shall execute and deliver to the Trustee a supplemental indenture expressly assuming the payment when due of the principal amount of and Interest, if any, on the Securities and the performance of each of the Company's other covenants under the Securities and this Indenture; (ii) in either case, immediately after giving effect to such transaction, no default or Event of Default shall have occurred and be continuing; and (iii) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such merger, consolidation, conveyance, transfer or lease and, if a supplemental indenture is required, such supplemental indenture comply with this Article VII and that all conditions precedent provided for in this Indenture relating to such transaction have been complied with. (b) In the case of a merger or consolidation pursuant to which all or substantially all of the Common Stock would be converted into cash, securities or other property, or any sale, transfer or lease of all or substantially all of the Company's assets, the right to convert a Security into Common Stock will be changed into a right to convert such Security into the type and amount of cash, securities or other property that the Holder of such Security would have received had the Holder held a number of shares of Common Stock equal to the product of 60 37.5090 and the Parity Share Number then in effect immediately prior to the transaction; provided, however, that upon conversion such Holder will continue to receive cash in satisfaction of all or a portion of the Conversion Consideration as provided in Article XII. In such event, the Company and the Trustee shall enter into a supplemental indenture providing for adjustments that, for events subsequent to the effective date of such supplemental indenture, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article VII. The above provisions of this Section shall similarly apply to successive consolidations, mergers, conveyances, sales, transfers, leases or other dispositions. Notice of the execution of such a supplemental indenture shall be given by the Company to the Holder of each Security as provided in Section 1.6 promptly upon such execution. For purposes of this Section 7.1(b), the type and amount of consideration that a Holder would have been entitled to receive as a holder of the Common Stock in the case of a merger or consolidation that causes the Common Stock to be converted into the right to receive more than a single type and amount of consideration (determined based in part upon any form of stockholder election), will be deemed to be the weighted average of the types and amounts of consideration received by the holders of the Common Stock that affirmatively make such an election. In addition, if the transaction constitutes a Change in Control and a Holder converts such Holder's Securities in connection with a Change in Control, the Capped Anti-Dilution Multiplier will be increased (but only prior to September 30, 2010), as provided in Section 12.10. (c) Neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any such supplemental indenture relating either to the kind or amount of shares of Common Stock or other securities or property or cash receivable by Holders of Securities upon the conversion of their Securities after any such consolidation, merger, conveyance, transfer, sale, lease (or other disposition or to any such adjustment, but may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, an Officers' Certificate or an Opinion of Counsel with respect thereto, which the Company shall cause to be furnished to the Trustee. Section 7.2 Successor Substituted. Upon any consolidation of the Company with, or merger of the Company into, any other Person or any sale, transfer or lease, sale or other disposition of all or substantially all the properties and assets of the Company in accordance with Section 7.1, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, transfer, lease or other disposition is made shall succeed to and be substituted for, and may exercise every right and power of the Company under this Indenture with the same effect as if such successor or Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE VIII SUPPLEMENTAL INDENTURES Section 8.1 Supplemental Indentures Without Consent of Holders of Securities. Without the consent of any Holders of Securities, the Company, when authorized by 61 a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto for any of the following purposes: (a) to cure any ambiguity or omission, or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein; provided that, any action pursuant to this clause (a) will not adversely affect the interests of the Holders of the Securities in any material respect; (b) to conform the text of any provision of this Indenture to any provision of the "Description of the Debentures" section of the Company's Offering Circular dated August 9, 2005, relating to the initial offering of the Securities, to the extent that such provision in that "Description of the Debentures" was intended to be a verbatim recitation of a provision of this Indenture; (c) to provide for the succession of another Person to the Company and the assumption by any such successor of the obligations of the Company herein and in the Securities, upon any merger, consolidation or asset transfer in accordance with Article VII hereof; (d) to provide for exchange rights of Holders of Securities in certain events such as the Company's consolidation or merger, or upon sale, lease or transfer of all or substantially all of its assets; (e) to provide for Global Securities in addition to or in place of certificated Securities; (f) to provide Holders with a security interest for, or a guarantee of, the Securities; (g) to comply with any requirement to effect or maintain the qualification of this Indenture under the Trust Indenture Act; (h) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities and to add to or change any of the provisions of this Indenture as may be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee; (i) to add to the covenants of the Company for the benefit of the Holders of the Securities or to surrender any right or power herein conferred upon the Company; (j) to add any Events of Default to Section 5.1(a) hereof; (k) to add to, change or eliminate any of the provisions of this Indenture; provided that, any such addition, change or elimination does not adversely affect the interests of the Holders of any Outstanding Securities in any material respect. Upon Company Request, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and subject to and upon receipt by the Trustee of the documents described in Section 8.3 hereof, the Trustee shall join with the Company in the 62 execution of any supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained. Notwithstanding any other provision of this Indenture or the Securities, the Registration Rights Agreement and the obligation to pay Additional Interest thereunder may only be amended, modified or waived in accordance with the provisions of the Registration Rights Agreement. Section 8.2 Supplemental Indentures with Consent of Holders of Securities. Except as set forth in Section 8.1, with either: (a) the written consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by the Act of said Holders delivered to the Company and the Trustee, or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of at least a majority in principal amount of the Outstanding Securities represented at such meeting, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities under this Indenture; provided, however, that no such supplemental indenture shall, without the consent or affirmative vote of the Holder of each Outstanding Security affected thereby: (i) reduce the percentage in principal amount of the Outstanding Securities whose Holders must consent to an amendment, supplement or waiver of this Indenture or the Securities pursuant to this Article VIII. (ii) reduce the rate of accrual of Interest or modify the method for calculating Interest or change the time for payment of Interest on the Securities; (iii) modify the provisions with respect to Holders' rights upon a Fundamental Change in a manner adverse to the Holders of the Securities, including the Company's obligations to convert the Securities following a Fundamental Change; (iv) reduce the Initial Principal Amount or the Accreted Principal Amount of the Securities or change the Stated Maturity of the Securities; (v) reduce the Redemption Price or the Repurchase Price of the Securities or change the time at which the Securities may or must be redeemed or repurchased; (vi) make payments on the Securities payable in currency other than in U.S. dollars; (vii) impair any Holder's right to institute suit for the enforcement of any payment on the Securities; 63 (viii) make any change in the percentage of principal amount of Securities necessary to waive compliance with provisions of this Indenture or to make any change in this Section 8.2; (ix) waive a continuing default or Event of Default regarding any payment on the Securities (except a rescission of acceleration of the Securities as provided in Section 5.1(c) and a waiver of the payment default that has resulted from such acceleration); or (x) adversely affect the conversion or repurchase provisions of the Securities. It shall not be necessary for any Act of Holders of Securities under this Section 8.2 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 8.3 Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture, and that such supplemental indenture has been duly authorized, executed and delivered by the Company, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms and does not conflict with or violate the terms of this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which adversely affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 8.4 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article VIII, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder appertaining thereto shall be bound thereby. Section 8.5 Reference in Securities to Supplemental Indentures. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Company and the Trustee, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities. Section 8.6 Notice of Supplemental Indentures. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 8.1 or Section 8.2, the Company shall give notice to all Holders of Securities of such fact, setting forth in general terms the substance of such supplemental indenture, in the manner provided in Section 1.6. Any failure of the Company to give such notice, or any defect therein, shall not in any way impair or affect the validity of any such supplemental indenture. 64 ARTICLE IX MEETINGS OF HOLDERS OF SECURITIES Section 9.1 Purposes for Which Meetings May Be Called. A meeting of Holders of Securities may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities. Section 9.2 Call, Notice and Place of Meetings. (a) The Trustee may at any time call a meeting of Holders of Securities for any purpose specified in Section 9.1, to be held at such time and at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine. Notice of every meeting of Holders of Securities, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 1.6, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (b) In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% in principal amount of the Outstanding Securities shall have requested the Trustee to call a meeting of the Holders of Securities for any purpose specified in Section 9.1, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the Holders of Securities in the amount specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in paragraph (a) of this Section. Section 9.3 Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders of Securities, a Person shall be: (a) a Holder of one or more Outstanding Securities, or (b) a Person appointed by an instrument in writing as proxy for a Holder or Holders of Securities of one or more Outstanding Securities by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. Section 9.4 Quorum; Action. (a) The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities shall constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders, be dissolved. In any other case, the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned 65 meeting, such adjourned meeting may be further adjourned for a period not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting (subject to repeated applications of this sentence). Notice of the reconvening of any adjourned meeting shall be given as provided in Section 9.2(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage of the principal amount of the Outstanding Securities that shall constitute a quorum. (b) Subject to the foregoing, at the reconvening of any meeting adjourned for a lack of a quorum, the Persons entitled to vote 25% in aggregate principal amount of the Outstanding Securities at the time shall constitute a quorum for the taking of any action set forth in the notice of the original meeting. (c) At a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid, any resolution and all matters (except as limited by the proviso to and except to the extent Section 10.13 requires a different vote) shall be effectively passed and decided if passed or decided by the lesser of: (i) the Holders of not less than a majority in aggregate principal amount of Outstanding Securities and (ii) the Persons entitled to vote not less than a majority in aggregate principal amount of Outstanding Securities represented and entitled to vote at such meeting. (d) Any resolution passed or decisions taken at any meeting of Holders of Securities duly held in accordance with this Section shall be binding on all the Holders of Securities whether or not present or represented at the meeting. The Trustee shall, in the name and at the expense of the Company, notify all the Holders of Securities of any such resolutions or decisions pursuant to Section 1.6. Section 9.5 Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities in regard to proof of the holding of Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 1.4 and the appointment of any proxy shall be proved in the manner specified in Section 1.4 or by having the signature of the Person executing the proxy guaranteed by any bank, broker or other eligible institution participating in a recognized medallion signature guarantee program. (b) The Trustee shall, by an instrument in writing, appoint a temporary chairman (which may be the Trustee) of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 9.2(b), in which case the Company or the Holders of Securities calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities represented at the meeting. 66 (c) At any meeting, each Holder of a Security or proxy shall be entitled to one vote for each U.S. $1,000 principal amount of Securities held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder or proxy. (d) Any meeting of Holders of Securities duly called pursuant to Section 9.2 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities represented at the meeting, and the meeting may be held as so adjourned without further notice. Section 9.6 Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders of Securities shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities or of their representatives by proxy and the principal amounts at Stated Maturity and serial numbers of the Outstanding Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of Holders of Securities shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 9.2(a) and, if applicable, Section 9.4(a). Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. ARTICLE X COVENANTS Section 10.1 Payment of Principal and Interest. The Company covenants and agrees that it will duly and punctually pay the principal amount of and Interest on the Securities in accordance with the terms of the Securities and this Indenture. The Company will deposit or cause to be deposited with the Trustee or its nominee, no later than the opening of business on the date of the Stated Maturity of any Security or no later than the opening of business on the due date for any installment of Interest, all payments so due, which payments shall be in immediately available funds on the date of such Stated Maturity or due date, as the case may be. Section 10.2 Maintenance of Offices or Agencies. The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where the Securities may be surrendered for registration of transfer or exchange or for presentation for payment or for conversion, redemption or repurchase and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt 67 written notice to the Trustee of the location, and any change in the location, of such office or agency not designated or appointed by the Trustee. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee in the Borough of Manhattan, The City of New York. The Company may at any time and from time to time vary or terminate the appointment of any such agent or appoint any additional agents for any or all of such purposes; provided, however, that until all of the Securities have been delivered to the Trustee for cancellation, or moneys sufficient to pay the principal amount of and Interest on the Securities have been made available for payment and either paid or returned to the Company pursuant to the provisions of Section 10.3, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where Securities may be presented or surrendered for payment and conversion, which shall initially be the Corporate Trust Office of the Trustee, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee, and notice to the Holders in accordance with Section 1.6, of the appointment or termination of any such agents and of the location and any change in the location of any such office or agency. The Company hereby initially designates the Trustee as Paying Agent, Security Registrar and Conversion Agent, and the Corporate Trust Office of the Trustee as one such office or agency of the Company for each of the aforesaid purposes. Section 10.3 Money for Security Payments to Be Held in Trust. (a) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal amount of or Interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal amount of or Interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and the Company will promptly notify the Trustee, in writing, of its action or failure so to act. (b) Whenever the Company shall have one or more Paying Agents, it will, no later than the opening of business on each due date of the principal amount or Interest on any Securities, deposit with the Trustee a sum in funds immediately payable on the payment date sufficient to pay the principal amount or Interest so becoming due, such sum to be held for the benefit of the Persons entitled to such principal amount or Interest and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee, in writing, of any failure so to act. (c) The Company will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section that such Paying Agent will: (i) hold all sums held by it for the payment of the principal amount of or Interest on Securities for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; 68 (ii) give the Trustee written notice of any default by the Company (or any other obligor upon the Securities) in the making of any payment of principal amount or Interest; and (iii) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held by such Paying Agent. (d) The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. (e) Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal amount of or Interest on any Security and remaining unclaimed for two years after such principal amount or Interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease. (f) In the absence of a written request from the Company to return unclaimed funds to the Company, the Trustee shall from time to time deliver all unclaimed funds to or as directed by applicable escheat authorities, as determined by the Trustee in its sole discretion, in accordance with the customary practices and procedures of the Trustee. Any unclaimed funds held by the Trustee pursuant to this Section shall be held uninvested and without any liability of interest. Section 10.4 Existence. Subject to Article VII, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not disadvantageous in any material respect to the Holders. Section 10.5 Maintenance of Properties. The Company will cause all properties used or useful in the conduct of its business or the business of any Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in 69 the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect to the Holders. Section 10.6 Payment of Taxes and Other Claims. The Company will pay or discharge, or cause to be paid or discharged, before the same may become delinquent, (a) all taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Significant Subsidiary, (b) all claims for labor, materials and supplies which, if unpaid, might by law become a lien or charge upon the property of the Company or any Significant Subsidiary, and (c) subject to Section 12.14, all stamps and other duties, if any, which may be imposed by the United States or any political subdivision thereof or therein in connection with the issuance, transfer, exchange or conversion of any Securities or with respect to this Indenture; provided, however, that, in the case of clauses (a) and (b), the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim (i) if the failure to do so will not, in the aggregate, have a material adverse impact on the Company and its Subsidiaries taken as a whole, or (ii) if the amount, applicability or validity is being contested in good faith by appropriate proceedings. Section 10.7 Registration and Listing. The Company will effect all registrations with, and obtain all approvals by, all governmental authorities that may be necessary under any United States federal or state law (including the Securities Act, the Exchange Act and state securities and Blue Sky laws) before the shares of Common Stock issuable upon conversion of Securities are issued and delivered, and qualified or listed as contemplated under the Registration Rights Agreement. Nothing in this Section will limit the application of Section 10.12. Section 10.8 Statement by Officers as to Default. (a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signer thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. (b) The Company will deliver to the Trustee, forthwith upon becoming aware of any default or any Event of Default under the Indenture, an Officers' Certificate specifying with particularity such default or Event of Default and further stating what action the Company has taken, is taking or proposes to take with respect thereto. (c) Any notice required to be given under this Section shall be delivered to the Trustee at its Corporate Trust Office. 70 Section 10.9 Delivery of Certain Information. At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a Holder of a Restricted Security or the holder of shares of Common Stock issued upon conversion thereof, the Company will promptly furnish or cause to be furnished Rule 144A Information to such Holder of Restricted Securities or such holder of shares of Common Stock issued upon conversion of Restricted Securities, or to a prospective purchaser of any such security designated by any such Holder or holder, as the case may be, to the extent required to permit compliance by such Holder or holder with Rule 144A under the Securities Act (or any successor provision thereto) in connection with the resale of any such security; provided, however, that the Company shall not be required to furnish such information in connection with any request made on or after the date that is two years from the later of: (a) the date such a Security (or any such predecessor security) was last acquired from the Company or (b) the date such a Security (or any such predecessor security) was last acquired from an "affiliate" of the Company within the meaning of Rule 144 under the Securities Act (or any successor provision thereto). "Rule 144A Information" shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto). Section 10.10 Tax Treatment of Securities. The Company agrees, and by acceptance of a beneficial ownership interest in the Securities each Holder of Securities has agreed, for United States federal income tax purposes, (a) (i) to treat the Securities as contingent payment debt instruments as defined in Treasury Regulation Section 1.1275-4 (the "Contingent Payment Regulations") and, for purposes of the Contingent Payment Debt Regulations, to treat the Fair Market Value of any Common Stock beneficially received by a beneficial owner upon conversion of the Securities as a contingent payment; and (ii) to accrue interest with respect to the Securities as original issue discount on a constant yield basis using the comparable yield of 7.375% per annum compounded semi-annually; (b) to be bound by the Company's application of the Contingent Payment Debt Regulations to the Securities including the Company's determination of the comparable yield and projected payment schedule, within the meaning of the Contingent Payment Debt Regulations, with respect to the Securities. A Holder of Securities may obtain the Issue Price, Issue Date, comparable yield and projected payment schedule by submitting a written request to the Company at the following address: Conseco, Inc., 11825 N. Pennsylvania Street, Carmel, Indiana 46032, Attention: Investor Relations; (c) that the comparable yield and the projected payment schedule are determined on the basis of an assumption of a fixed growth of stock price and the comparable yield and the projected payment schedule are not determined for any purpose other than for the purpose of applying Treasury Regulation section 1.1275-4(b)(4) to the Security, and the comparable yield and the projected payment schedule do not constitute a projection or representation regarding the actual amounts payable on the Securities; 71 (d) that each Holder shall use the projected payment schedule with respect to the Securities described in Section 10.10(b) above, as required by Treasury Regulations Section 1.1275-4(b)(4)(iv), to determine its interest accruals and adjustments as provided in Treasury Regulation Section 1.1275-4(b); and (e) not to take any position on a tax return inconsistent with (a), (b), (c) or (d), unless otherwise required by applicable law. Section 10.11 Resale of Certain Securities. During the period beginning on the last date of original issuance of the Securities and ending on the date that is two years from such date (or such shortened period under Rule 144(k) under the Securities Act or any successor rule), the Company will not, and will not permit any of its subsidiaries or other "affiliates" (as defined under Rule 144 under the Securities Act or any successor provision thereto) to, resell: (a) any Securities that constitute "restricted securities" under Rule 144 or (b) any securities into which the Securities have been converted under this Indenture that constitute "restricted securities" under Rule 144 that in either case have been reacquired by any of them. The Trustee shall have no responsibility in respect of the Company's performance of its agreement in the preceding sentence. Section 10.12 Registration Rights. (a) The Company agrees that the Holders from time to time of Registrable Securities are entitled to the benefits of the Registration Rights Agreement. (b) Whenever in this Indenture there is mentioned, in any context, the payment of the principal amount of or Interest on, or in respect of, any Security, such mention shall be deemed to include mention of the payment of Additional Interest provided for in this Section and the Registration Rights Agreement to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof pursuant to the provisions of this Section and the Registration Rights Agreement and express mention of the payment of Additional Interest (if applicable) in any provisions hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made. (c) If a Security, or the shares of Common Stock issuable upon conversion of a Security, is a Registrable Security, and the Holder thereof elects to sell such Registrable Security pursuant to the Shelf Registration Statement then, by its acceptance thereof, the Holder of such Registrable Security will have agreed to be bound by the terms of the Registration Rights Agreement relating to the Registrable Securities which are the subject of such election. (d) For the purposes of the Registration Rights Agreement, the term "Holder" means any Person that is the record owner of Registrable Securities (and includes any Person that has a beneficial interest in any Registrable Security in book entry form). (e) If Additional Interest is payable under the Registration Rights Agreement, the Company shall deliver to the Trustee a certificate to that effect stating: 72 (i) the amount of Additional Interest that is payable and (ii) the date on which Additional Interest is payable. (f) Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no Additional Interest is payable. If Additional Interest has been paid by the Company directly to the Persons entitled to them, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment. Section 10.13 Waiver of Certain Covenants. The Company may omit in any particular instance to comply with any covenant or condition set forth in Sections 10.4 (other than with respect to the existence of the Company (subject to Article VII)), 10.5 and 10.6, inclusive (other than a covenant or condition which under Article VII cannot be modified or amended without the consent of the Holder of each Outstanding Security affected), if before the time for such compliance the Holders shall, through: (a) the written consent of not less than a majority in aggregate principal amount of the Outstanding Securities or (b) the adoption of a resolution at a meeting of Holders of the Outstanding Securities at which a quorum is present by the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities represented at such meeting, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee or any Paying or Conversion Agent in respect of any such covenant or condition shall remain in full force and effect. ARTICLE XI REDEMPTION OF SECURITIES Section 11.1 Right of Redemption. The Company will have the right to redeem the Securities, in whole or in part, for cash at any time or from time to time on or after October 5, 2010 at a Redemption Price equal to 100% of the Accreted Principal Amount of the Securities selected for redemption, plus accrued and unpaid Interest, if any, to, but not including, the Redemption Date. Section 11.2 Applicability of Article. Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision of the Securities or this Indenture, shall be made in accordance with such provision and this Article XI. Section 11.3 Election to Redeem; Notice to Trustee. (a) The election of the Company to redeem any Securities will be evidenced by a Board Resolution. In case of any redemption, the Company will, at least 60 calendar days prior to the Redemption Date fixed by 73 the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date and of the Accreted Principal Amount of Securities of such series to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company will furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. (b) If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 calendar days prior to the Redemption Date by the Trustee, from the Outstanding Securities not previously called for redemption, on a pro rata basis unless another method is required by the New York Stock Exchange or The Nasdaq National Market or another national or regional securities exchange on which the Common Stock is then listed or quoted. If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption by the Trustee in accordance with the preceding sentence. Securities which have been converted during a selection of Securities to be redeemed may be treated by the Trustee as Outstanding for the purpose of such selection. The Trustee shall promptly notify the Company and each Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the Accreted Principal Amount thereof to be redeemed. (c) For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. Section 11.4 Notice of Redemption. Notice of redemption of Securities to be redeemed will be given by the Company or, at the Company's written request (which request shall be delivered to the Trustee simultaneously with notification of the Redemption Date pursuant to Section 11.3), by the Trustee in the name and at the expense of the Company and will be irrevocable (such notice, a "Redemption Notice"). A Redemption Notice will be given by mail, first class postage prepaid, not less than 30 or more than 60 calendar days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption will include the CUSIP number and will state: (i) the Redemption Date; (ii) the Redemption Price and accrued Interest; (iii) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the Accreted Principal Amounts) of the particular Securities to be redeemed; (iv) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that Interest thereon will cease to accrue on and after said date; 74 (v) that Securities called for redemption may be converted at any time prior to the close of business on the Business day immediately preceding the Redemption Date; (vi) the place or places where such Securities are to be surrendered for payment of the Redemption Price; and (vii) the specific provision of this Indenture pursuant to which such Securities are to be redeemed. Notice of redemption of Securities to be redeemed shall be given by the Trustee to each Paying Agent in the name of and at the expense of the Company. If the Company exercises its right to redeem the Securities, in whole or in part, it will disseminate a Press Release containing information regarding the redemption and publish the information through a public medium that is customary for such Press Release. Section 11.5 Deposit of Redemption Price. Prior to 10:00 a.m. (local time at the Place of Payment) on the Redemption Date specified in the Redemption Notice given as provided in Section 11.4, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount of money (which shall be in immediate available funds on such Redemption Date) sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) any accrued Interest to, but not including, the Redemption Date on, all of the Securities that are to be redeemed on that date other than any Securities called for redemption on the date which have been converted prior to the date of such deposit. If any Security called for redemption is converted, any money deposited with the Trustee or so segregated and held in trust for the redemption of such Security shall (subject to any right of the Holder of such Security or any Predecessor Security to receive interest as provided in the last paragraph of Section 3.11) be paid to the Company or, if then held by the Company, shall be discharged from such trust. Section 11.6 Securities Payable on Redemption Date. (a) A Redemption Notice having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price, including accrued Interest) such Securities shall cease to accrue Interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued and unpaid Interest to, but not including, the Redemption Date. (b) If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the Accreted Principal Amount and, to the extent permitted by applicable law, accrued Interest shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security and such Security shall remain convertible until the Redemption Price of such Security (or portion thereof, as the case may be) has been paid in full. 75 Section 11.7 Securities Redeemed in Part. (a) Any Security that is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of like tenor, of any authorized denomination as requested by such Holder, in aggregate Accreted Principal Amount equal to and in exchange for the unredeemed portion of the Accreted Principal Amount of the Security so surrendered. (b) In the event of any redemption in part, the Company and the Trustee will not be required (i) to issue, register the transfer of, or exchange any Securities during a period beginning at the opening of business 15 calendar days before the mailing of a Redemption Notice of Securities selected for redemption under Section 11.3 and ending at the close of business on the day of such mailing or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except, in the case of any Securities to be redeemed in part, the portion thereof not being redeemed. ARTICLE XII CONVERSION OF SECURITIES Section 12.1 Right to Convert. Subject to and upon compliance with the provisions of this Article XII, at the option of the Holder, any Securities or any portion of the principal amount thereof that is an integral multiple of $1,000 (but for purposes of such denominations based on the Initial Principal Amount of such Securities) may be converted: (a) prior to September 30, 2034, during any Conversion Period, if the Parity Price of the Common Stock for at least 20 Trading Days in the 30 consecutive Trading Day period ending on the first day of that Conversion Period is greater than 120% of the product of (i) $26.66 and (ii) the Accreted Principal Amount of a Security with an Initial Principal Amount of $1,000 divided by $1,000; (b) prior to September 30, 2034, during the five consecutive Business Day period following any five consecutive Trading Day period in which the Trading Price of a Security with an Initial Principal Amount of $1,000 for each day of that five Trading Day period was less than 98% of the of the product of (i) the Parity Price and (ii) 37.5090; (c) at any time on or after September 30, 2034; (d) if the Securities are called for redemption pursuant to Article XI, at any time after the date of the mailing of the applicable Redemption Notice and prior to the close of business on the Business Day immediately preceding the Redemption Date; provided that if the 76 Company elects to redeem less than all of the Securities, only those Securities called for redemption may be converted; or (e) upon the occurrence of a corporate transaction described in Section 12.2. Notwithstanding the provisions of this Section 12.1, prior to September 30, 2010, except in the case of a conversion of Securities made in connection with a Fundamental Change (as provided in Section 12.5), Holders will not have the option to convert Securities if such conversion would result in a default under the terms of the Company's other outstanding Indebtedness or would otherwise be prohibited by the terms of such other Indebtedness. Section 12.2 Certain Corporate Transactions. (a) If the Company elects to: (i) distribute to all holders of Common Stock rights, options or warrants entitling them to purchase, for a period expiring within 60 days of the declaration date for such distribution, shares of Common Stock at less than the Closing Price of the Common Stock on the Trading Day immediately preceding the declaration date for such distribution; or (ii) distribute to all holders of Common Stock assets, debt securities or rights, options or warrants to purchase securities of the Company, which distribution has a per share fair market value (determined in the manner specified in Section 12.9(f)) exceeding 10% of the Closing Price of the Common Stock on the Trading Day immediately preceding the declaration date for such distribution; then in the case of the foregoing clauses (i) and (ii), the Company shall notify the Holders at least 20 days prior to the ex-dividend date for such distribution. Once the Company has given such notice, even if the Securities are not otherwise convertible at such time, Holders may surrender their Securities for conversion at any time thereafter until the earlier of the close of business on the Business Day immediately prior to the ex-dividend date or the Company's announcement that such distribution will not take place, subject to the limitations imposed by the last paragraph of Section 12.1; provided, however, that a Holder may not exercise this right to convert if the Holder is otherwise entitled to participate in the distribution without conversion. As used herein, the term "ex-dividend date" or "ex-date" when used with respect to any issuance or distribution, shall mean the first date upon which a sale of shares of Common Stock does not automatically transfer the right to receive the relevant dividend or distribution from the seller of such Common Stock to its buyer. (b) If the Company is party to a consolidation, merger or binding share exchange pursuant to which all or substantially all of the Common Stock would be converted into cash, securities or other property, even if the Securities are not otherwise convertible at the time, Holders may surrender their Securities for conversion at any time from and after the date that is 15 days prior to the anticipated effective date of the transaction until 15 days after the actual date of the transaction. If such consolidation, merger or binding share exchange constitutes a Fundamental Change, the right to convert Securities contemplated by this Section 12.2(b) will not be subject to the limitations imposed by the last paragraph of Section 12.1. 77 (c) If a Fundamental Change occurs, Holders may surrender their Securities for conversion during the period described in paragraph (b) above. However, a conversion of a Security will only be considered "in connection with" a Fundamental Change if the Security is surrendered during the period described in Section 12.5(e) and the provisions of Section 12.5(d) and Section 12.5(e) are complied with. Section 12.10 provides for an adjustment to the Capped Anti-Dilution Multiplier only if a Security is deemed to be converted "in connection with" a Change in Control. Section 12.3 Determination of Satisfaction of Certain Conversion Triggers. (a) Prior to September 30, 2034, the Company shall determine if the Securities are convertible in accordance with Section 12.1(a) and shall notify the Trustee if the Securities become convertible. The Company or its Agent shall make such determination during the 30 consecutive Trading Days ending on the first day of each Conversion Period. (b) The Company shall determine if the Securities are convertible in accordance with Section 12.1(b) and notify the Trustee if the Securities become convertible; provided that, the Company shall have no obligation to make such determination unless requested in writing to do so by a Holder. Upon such request, the Company shall determine the Trading Price of a Security with an Initial Principal Amount of $1,000 beginning on the next Trading Day and on each successive Trading Day until the Trading Price of a Security with an Initial Principal Amount of $1,000 is greater than or equal to 98% of the product of (1) the Parity Price and (2) 37.5090. For this purpose, if the Company cannot reasonably obtain at least one bid for $5.0 million in Initial Principal Amount of the Securities from a nationally recognized securities dealer or if, in the reasonable judgment of the Company, the bid quotations are not indicative of the secondary market value of the Securities, then a Holder may surrender Securities for conversion during the five consecutive Business Day period following such event or determination. Section 12.4 Notice of Conversion. Upon the determination by or on behalf of the Company that Holders are or will be entitled to convert the Securities in accordance with the provisions of Section 12.1 or Section 12.2, the Company will issue a Press Release containing information about the right of conversion, publish the information through a public medium that is customary for such Press Release and publish the information on the Company's website. Section 12.5 Conversion at Option of the Holder Upon a Fundamental Change. (a) If a Fundamental Change occurs at any time prior to Maturity, each Holder will have the right to convert any or all of such Holder's Securities into Conversion Consideration pursuant to the procedures set forth in this Section 12.5. (b) On or before the fifth day after the occurrence of a Fundamental Change, the Company will provide to all Holders, the Trustee and the Paying Agent a notice of the occurrence of the Fundamental Change (such notice, a "Fundamental Change Notice") and of the resulting rights of Holders. Each Fundamental Change Notice shall state, among other things: (i) the events causing the Fundamental Change; 78 (ii) the date of the Fundamental Change; (iii) the last date (determined as provided below) on which a Holder may exercise its conversion right in connection with such Fundamental Change; (iv) the Fundamental Change Election Date, which date shall be no less than 22 days after the date of the applicable Fundamental Change Notice (but not more than 35 days, unless a longer period is required by law); (v) the name and address of the Paying Agent and the Conversion Agent; (vi) the Parity Price, the Parity Share Number and any adjustments to the Parity Share Number (including any adjustments to the Capped Anti-Dilution Multiplier pursuant to Section 12.10 hereof); (vii) the Conversion Consideration (or, if not known, the method for determining the amount of Conversion Consideration) that Holders will be entitled to receive upon conversion; and (viii) the procedures that Holders must follow to convert their Securities. (c) Simultaneously with providing the Fundamental Change Notice, the Company will issue a Press Release and publish the information contained therein through a public medium customary for such Press Releases. (d) To exercise the conversion right contemplated by this Section 12.5, a Holder must deliver, before the close of business on the second Business Day immediately preceding the Fundamental Change Election Date, the Fundamental Change Election Notice, duly completed, to the Paying Agent. The Fundamental Change Election Notice must state: (i) if certificated, the certificate numbers of the Securities to be delivered for conversion; (ii) the portion of the Initial Principal Amount of the Securities to be converted, which must be $1,000 or an integral multiple thereof; and (iii) that the Securities are to be converted by the Company pursuant to the applicable provisions of the Securities and this Indenture. If the Securities are Global Securities, the Fundamental Change Election Notice must comply with the Applicable Procedures. (e) A conversion of Securities by a Holder will be deemed for purposes of this Section 12.5 and Section 12.10 to be "in connection with" a Fundamental Change if the Fundamental Change Election Notice is received by the Conversion Agent subsequent to the Fundamental Change Effective Date and before the close of business on the second Business Day immediately preceding the Fundamental Change Election Date. 79 (f) A Holder may withdraw any Fundamental Change Election Notice (in whole or in part) by a written notice of withdrawal delivered to the Paying Agent prior to the close of business on the Business Day prior to the Fundamental Change Election Date. The notice of withdrawal must state: (i) the principal amount of the withdrawn Securities; (ii) if certificated Securities have been issued, the certificate numbers of the withdrawn Securities; and (iii) the principal amount, if any, that remains subject to the Fundamental Change Election Notice. If the Securities are Global Securities, the withdrawal notice must comply with the Applicable Procedures. (g) A Holder must either effect book-entry transfer or deliver the Securities, together with necessary endorsements, to the office of the Paying Agent after delivery of the Fundamental Change Election Notice to receive payment of the Conversion Consideration. Holders will receive payment of the Conversion Consideration promptly following the later of the Fundamental Change Election Date or the time of book-entry transfer or the delivery of the Securities to the Paying Agent. If the Paying Agent holds money or securities sufficient to pay the Conversion Consideration of the Securities on the Business Day following the Fundamental Change Election Date, then: (i) the Securities will cease to be Outstanding and Interest, if any, will cease to accrue or principal to accrete (whether or not book-entry transfer of the Securities is made or whether or not the Security is delivered to the Paying Agent); and (ii) all other rights of the Holder will terminate (other than the right to receive the Conversion Consideration upon delivery or transfer of the Securities). Section 12.6 Exercise of Conversion Privilege. (a) In order to convert a security other than in connection with a Fundamental Change (which is governed by Section 12.5 above), the Holder of any Security to be converted must deliver an irrevocable conversion notice substantially in the form set forth in Section 2.4 together with the Security (if the Security is in certificated form), duly endorsed in blank, by the time required by Section 12.1 or 12.2, as the case may be, to the Conversion Agent at any office or agency of the Company maintained for that purpose pursuant to Section 10.2 (the date of such delivery of notice and satisfaction of all other requirements for conversion, the "Conversion Date"). Any Holder may obtain copies of the required form of the conversion notice from the Conversion Agent. Upon conversion, the Company will satisfy its conversion obligations with respect to the principal amount of the Securities to be converted into Conversion Consideration. (b) The Conversion Agent will convert the Securities and the Company will remit the Conversion Consideration as soon as practicable, but in no event later than the third Business Day following the last day of the Applicable Conversion Reference Period. (c) In the event any Holder surrenders any Security for conversion during the period between the close of business on a Record Date but prior to the corresponding Interest Payment Date, the Company shall pay accrued Interest on such Security on that Interest Payment Date to the Holder of such Security as of such Record Date. The Holder surrendering the Security for conversion shall be required to pay to the Company an amount equal to the Interest that has accrued as of such Interest Payment Date and that will be paid to the Holder of such Security as of the Record Date. The preceding sentence does not apply to Securities that are 80 surrendered for conversion after the Company has specified a Redemption Date that is after a Record Date but on or prior to the corresponding Interest Payment Date. (d) Securities shall be deemed to have been converted immediately prior to the close of business on the day of surrender of such Securities for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Securities as Holders shall cease, and the Person or Persons entitled to receive any Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such Common Stock at such time. As promptly as practicable on or after the Conversion Date, the Company shall issue and deliver to the Trustee, for delivery to the Holder (unless a different Person is indicated on the Conversion Notice), a certificate or certificates for the number of full shares of Common Stock issuable upon conversion as provided in clause (b) above, together with payment in lieu of any fraction of a share, as provided in Section 12.8. (e) All shares of Common Stock delivered upon conversion of Restricted Securities shall bear restrictive legends substantially in the form of the legends required to be set forth on the Restricted Securities pursuant to Section 3.6(h) and shall be subject to the restrictions on transfer provided in such legends. Neither the Trustee nor any agent maintained for the purpose of such conversion shall have any responsibility for the inclusion or content of any such restrictive legends on such Common Stock; provided, however, that the Trustee or any agent maintained for the purpose of such conversion shall have provided, to the Company or to the Company's transfer agent for such Common Stock, prior to or concurrently with a request to the Company to deliver such Common Stock, written notice that the Securities delivered for conversion are Restricted Securities. (f) In the case of any Security which is converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Security or Securities of authorized denominations in an aggregate principal amount equal to the unconverted portion of the principal amount of such Security. A Security may be converted in part, but only if the principal amount of such Security to be converted is any integral multiple of U.S. $1,000 (but for purposes of such denominations based on the Initial Principal Amount of such Securities) and the principal amount of such security to remain Outstanding after such conversion is equal to or in excess of U.S. $1,000. (g) If shares of Common Stock to be issued upon conversion of a Restricted Security, or Securities to be issued upon conversion of a Restricted Security in part only, are to be registered in a name other than that of the beneficial owner of such Restricted Security, then such Holder must deliver to the Conversion Agent a Surrender Certificate, dated the date of surrender of such Restricted Security and signed by such beneficial owner, as to compliance with the restrictions on transfer applicable to such Restricted Security. Neither the Trustee nor any Conversion Agent, Registrar or transfer agent shall be required to register in a name other than that of the beneficial owner, shares of Common Stock issued upon conversion of any such Restricted Security not so accompanied by a properly completed Surrender Certificate. Section 12.7 Exchange in Lieu of Conversion. When a Holder surrenders Securities for conversion, the Conversion Agent may direct the Holder to surrender the Securities 81 to a financial institution designated by the Company for exchange in lieu of conversion. In order to accept any Securities surrendered for conversion, the designated institution must agree to deliver, in exchange for the Securities, the Conversion Consideration. If the designated institution accepts any such Securities, it will deliver the Conversion Consideration to the Conversion Agent and the Conversion Agent will deliver that consideration to the Holder. Any Securities exchanged by the designated institution will remain Outstanding. If the designated institution agrees to accept any Securities for exchange but does not timely deliver the related Conversion Consideration, the Company will, as promptly as practical thereafter, but not later than the third Business Day following the Applicable Conversion Response Period, convert the Securities and deliver the Conversion Consideration owed upon such conversion. The Company's designation of an institution to which the Securities may be submitted for exchange does not require the institution to accept any Securities. If the designated institution declines to accept any Securities surrendered for exchange, the Company will convert those Securities into the cash payment and the number of shares of Common Stock, issuable upon conversion, as described in this Article XII. The Company will not pay any consideration to, or otherwise enter into any arrangement with, the designated institution for or with respect to such designation. Section 12.8 Fractions of Shares. (a) No fractional shares of Common Stock shall be issued upon conversion of any Security or Securities. Instead of any fractional shares of Common Stock that would otherwise be issued upon conversion of the Securities, the Company will pay a cash amount (calculated to the nearest cent) equal to the value of such fractional shares, based on the Closing Price on the last Trading Day of the Applicable Conversion Reference Period. (b) For purposes of paragraphs (a) above, if more than one Security shall be surrendered for conversion at one time by a Holder, the number of full shares of Common Stock which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof) so surrendered. Section 12.9 Anti-Dilution Adjustments. The Capped Anti-Dilution Multiplier and the Uncapped Anti-Dilution Multiplier will be subject to adjustment, without duplication, as follows upon the occurrence of any of the following events: (a) Stock Splits and Combinations. In the event that the outstanding shares of Common Stock shall be subdivided, split or recombined (including an effective subdivision of Common Stock through the reclassification of Common Stock), the Uncapped Anti-Dilution Multiplier in effect immediately before the close of business on the record date fixed for such subdivision, split or recombination becomes effective shall be proportionately increased or reduced. (b) Stock Dividends. In the event that the Company pays a dividend or makes a distribution on Common Stock, payable exclusively in shares of Common Stock, the Uncapped Anti-Dilution Multiplier in effect immediately before the close of business on the record date 82 fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be adjusted by multiplying it by a fraction: (i) the numerator of which shall be (A) the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination, plus (B) the total number of shares constituting the dividend or distribution; and (ii) the denominator of which shall be the number of shares of Common Stock outstanding on the record date fixed for such dividend or distribution. If, after any such date fixed for determination, any dividend or distribution is not in fact paid, the Uncapped Anti-Dilution Multiplier shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Uncapped Anti-Dilution Multiplier that would have been in effect if such determination date had not been fixed. (c) Issuance of Rights or Warrants. In the event that the Company issues to all or substantially all holders of Common Stock rights, options or warrants (other than pursuant to any dividend reinvestment or share purchase or similar plan) entitling such holders to subscribe for or purchase shares of Common Stock for a period expiring within 60 days from the date of issuance of the rights, options or warrants at less than the Current Market Price per share of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights, options or warrants, the Uncapped Anti-Dilution Multiplier in effect immediately before the close of business on the record date fixed for such determination shall be increased by multiplying it by a fraction: (i) the numerator of which shall be (A) the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus (B) the total number of shares of Common Stock so offered for subscription or purchase; (ii) the denominator of which shall be the sum of (A) the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus (B) the total number of shares of Common Stock that the aggregate offering price of the total number of shares offered for subscription or purchase would purchase at the Current Market Price. If, after any such date fixed for determination, any such rights, options or warrants are not in fact exercised prior to the expiration thereof (and as a result no additional shares of Common Stock are delivered or issued pursuant to such rights, options or warrants), the Uncapped Anti-Dilution Multiplier shall be immediately readjusted, to the Uncapped Anti-Dilution Multiplier that would then be in effect had the adjustments made upon the issuance of such rights, options or warrants been made on the basis of delivery or issuance of only the number of shares of Common Stock actually delivered or issued. "Current Market Price" of the Common Stock (unless otherwise stated below) means the average of the Closing Prices of the Common Stock for the five consecutive Trading Days ending on the earlier of the record date fixed for determination of the stockholders entitled to 83 receive such distribution (if such record date is a Trading Day or, if not, then on the last Trading Day prior to such record date) and the day before the ex-dividend date for such distribution. (d) Spin-Offs. In the event the Company pays a dividend or makes a distribution of shares of capital stock of any class or series, or similar equity interests, of or relating to a Subsidiary of the Company or other business unit ("Spin-Off"), the Uncapped Anti-Dilution Multiplier in effect immediately before the close of business on the record date fixed for determination of stockholders entitled to receive that distribution will be increased by multiplying it by a fraction equal to the sum of the Daily Adjustments for each of the ten consecutive Trading Days beginning on the effective date of the Spin-Off. The "Daily Adjustment" for any given Trading Day is equal to a fraction: (i) the numerator of which is the Closing Price of the Common Stock on that Trading Day plus the Closing Price of the portion of those shares of capital stock or similar equity interests so distributed applicable to one share of Common Stock on that Trading Day; and (ii) the denominator of which is the product of (a) 10 and (b) the Closing Price of the Common Stock on that Trading Day. The adjustment to the Uncapped Anti-Dilution Multiplier in the event of a Spin-Off will take effect at the opening of business on the tenth Trading Day from, and including, the effective date of the Spin-Off. (e) Cash Dividends or Distributions. In the event the Company makes regular quarterly, semi-annual or annual cash dividends or distribution consisting exclusively of cash to all or substantially all holders of the Common Stock, the Uncapped Anti-Dilution Multiplier in effect immediately before the close of business on the record date fixed for such dividend or distribution will be increased by multiplying it by a fraction: (i) the numerator of which is the Current Market Price of the Common Stock; and (ii) the denominator of which is the Current Market Price of the Common Stock, minus the amount per share of such dividend or distribution. In the event the Company makes other dividends or distributions consisting exclusively of cash to all or substantially all holders of Common Stock (excluding any dividends or distribution in connection with the Company's liquidation, dissolution or winding up), the Uncapped Anti-Dilution Multiplier will be increased by multiplying it by the fraction set forth above. Notwithstanding the foregoing, in cases where (i) the amount per share of Common Stock of such distribution equals or exceeds the Current Market Price of the Common Stock or (ii) the Current Market Price of the Common Stock exceeds the amount per share of Common Stock of such distribution by less than $1.00, in lieu of making the foregoing adjustment, the Company will have the right to adjust a Holder's conversion right such that such Holder will receive upon conversion, in addition to cash and shares of Common Stock, if any, the distribution the Holder 84 would have received if the Holder had held a number of shares equal to the product of (i) 37.5090 and (ii) the Parity Share Number then in effect immediately prior to the record date for such distribution or dividend. If the Company elects to adjust the Holders' conversion rights as contemplated by this paragraph, the Company will promptly notify the Trustee, the Conversion Agent and the Holders of such election. (f) Distributions of Indebtedness, Securities or Assets. In the event the Company distributes to all or substantially all holders of Common Stock evidences of indebtedness, securities or other assets or any other rights, options or warrants to purchase its securities (the "distributed assets"), but excluding: (i) dividends or distributions described in Section 12.9(b); (ii) rights or warrants described in Section 12.9(c) (iii) dividends or distributions in connection with a Spin-Off described in Section 12.9(d); and (iv) dividends or distributions paid exclusively in cash described in Section 12.9(e); the Uncapped Anti-Dilution Multiplier in effect immediately before the close of business on the record date fixed for determination of stockholders entitled to receive that distribution will be increased by multiplying it by a fraction: (i) the numerator of which is the Current Market Price of the Common Stock; and (ii) the denominator of which is the Current Market Price of the Common Stock minus the fair market value, as determined by the Board of Directors, whose determination in good faith will be conclusive, of the portion of those distributed assets applicable to one share of Common Stock. Notwithstanding the foregoing, in cases where (i) the fair market value per share of Common Stock of the distributed assets equals or exceeds the Current Market Price of the Common Stock, or (ii) the Current Market Price of the Common Stock exceeds the fair market value per share of Common Stock of the distributed assets by less than $1.00, in lieu of making the foregoing adjustment, the Company will have the right to adjust the conversion rights of the Securities such that a Holder will receive upon conversion, in addition to cash and shares of Common Stock, the distributed assets the Holder would have received if the Holder had held a number of shares of Common Stock equal to the product of 37.5090 and the Parity Share Number then in effect immediately prior to the record date for such distribution of assets. (g) Repurchases. In the event the Company or one of its Subsidiaries makes a payment in respect of a repurchase of Common Stock, the consideration for which exceeds the Then-Prevailing Market Price of the Common Stock (such amount being the "Repurchase Premium"), and that repurchase, together with any other repurchases of Common Stock by the Company or a Subsidiary of the Company involving a Repurchase Premium concluded within 85 the preceding 12 months, results in the payment by the Company (or its Subsidiary) of an aggregate consideration exceeding an amount equal to 10% of the Market Capitalization of the Common Stock, the Uncapped Anti-Dilution Multiplier in effect immediately before the close of business on the day of such payment in respect of a repurchase will be increased by multiplying it by a fraction: (i) the numerator of which shall be the Current Market Price of the Common Stock; and (ii) the denominator of which shall be (A) the Current Market Price of the Common Stock, minus (B) the quotient of (1) the aggregate amount of all of the Repurchase Premiums paid in connection with such repurchases and (2) the number of shares of Common Stock outstanding on the day next succeeding the date of the repurchase triggering the adjustment, as determined by the Board of Directors; provided that no adjustment to the Uncapped Anti-Dilution Multiplier shall be made to the extent the Uncapped Anti-Dilution Multiplier is not increased as a result of the above calculation and; provided further that the repurchases of Common Stock effected by the Company, any of its Subsidiaries or their respective agents in conformity with Rule 10b-18 under the Exchange Act will not be included in any adjustment to the Uncapped Anti-Dilution Multiplier made under this Section 12.9(g). For purposes of this Section 12.9(g): (i) "Market Capitalization" will be calculated by multiplying (A) the Current Market Price of the Common Stock by (B) the number of shares of Common Stock then outstanding on the date of the repurchase triggering the adjustment; (ii) "Current Market Price" will be the average of the Closing Prices of the Common Stock for the five consecutive Trading Days beginning on the Trading Day next succeeding the date of the repurchase triggering the adjustment; and (iii) in determining the Repurchase Premium, the "Then-Prevailing Market Price" of the Common Stock will be the average of the Closing Prices of the Common Stock for the five consecutive Trading Days ending on the relevant repurchase date. (h) Tender or Exchange Offers. In the event the Company or one of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for Common Stock, to the extent the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the Closing Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender offer or exchange offer, as the case may be, the Uncapped Anti-Dilution Multiplier in effect immediately before the close of business on the date fixed for the consummation of such tender or exchange offer will be increased by multiplying it by a fraction: (i) the numerator of which shall be the sum of (A) the fair market value, as determined by the Board of Directors of the aggregate consideration payable for all shares of Common Stock the Company or any such Subsidiary purchases in the tender or exchange offer 86 and (B) the product of (1) the number of shares of Common Stock outstanding on the date of consummation of such tender or exchange offer less any such purchased shares and (2) the Closing Price of the Common Stock on the Trading Day next succeeding the date of the expiration of the tender or exchange offer; and (ii) the denominator of which shall be the product of (A) the number of shares of Common Stock outstanding on the date of consummation of such tender or exchange offer, including any such purchased shares, and (B) the Closing Price of the Common Stock on the Trading Day next succeeding the date of expiration of the tender or exchange offer; (i) In addition to the adjustments set forth above, the Company may increase the Parity Share Number as the Board of Directors considers advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of capital stock (or rights to acquire capital stock) or from any event treated as such for income tax purposes. The Company may also, from time to time, to the extent permitted by applicable law, increase the Parity Share Number by any amount for any period of at least 20 days if the Board of Directors has determined that such increase would be in the Company's best interests. If the Board of Directors makes such a determination, it will be conclusive. The Company will give Holders at least 15 days' notice of such an increase in the Parity Share Number. No adjustment to the Parity Share Number or a Holder's ability to convert its Securities will be made if the Holder otherwise participated in the distribution without conversion. Notwithstanding the foregoing provisions of this Section 12.9, neither the Capped Anti-Dilution Multiplier nor the Uncapped Anti-Dilution Multiplier will be adjusted: (i) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company's securities and the investment of additional optional amounts in shares of Common Stock under any plan; (ii) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its Subsidiaries; (iii) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding clause and outstanding as of the date the Securities were first issued; (iv) for a change in the par value of the Common Stock; or (v) for accrued and unpaid Interest, if any. Holders will receive, upon conversion of their Securities, in addition to cash and Common Stock, as the case may be, the rights under any stockholder rights plan the Company may adopt, unless prior to such conversion a Trigger Event (as defined in Section 12.17) shall 87 have occurred, in which case the Uncapped Anti-Dilution Multiplier will be adjusted at the time of the Trigger Event as described in Section 12.9(f). Simultaneously with an adjustment to the Capped Anti-Dilution Multiplier or the Uncapped Anti-Dilution Multiplier, as the case may be, the Company will disseminate a Press Release detailing the new Capped Anti-Dilution Multiplier, the Uncapped Anti-Dilution Multiplier and Parity Share Number and other relevant information. Section 12.10 Adjustment to Capped Anti-Dilution Multiplier In Connection With a Change in Control. (a) If a Change in Control occurs prior to September 30, 2010, the Capped Anti-Dilution Multiplier in effect immediately before the close of business on the date on which such Change in Control transaction becomes effective (the "Change in Control Effective Date") will be increased by multiplying it by a factor (the "Adjustment Factor") determined by reference to the table set forth below in Section 12.10(b) based on the Change in Control Effective Date and the Change in Control Price (as defined below). If holders of Common Stock receive only cash in a Change in Control transaction, the "Change in Control Price" shall be the cash amount paid per share multiplied by the Parity Share Number then in effect. Otherwise, the Change in Control Price will be the average of the Parity Prices of the Common Stock on each of the ten consecutive Trading Days prior to but not including the Change in Control Effective Date. (b) The following table sets forth the Change in Control Prices and Adjustment Factors for a Security with an Initial Principal Amount of $1,000:
Change in Control Price -------------------------------------------------------------------------------------------------------------- Change in Control $20.91 $22.50 $25.00 $27.50 $30.00 $35.00 $40.00 $45.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 $120.00 - ---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------- ------- August 15, 2005............ 1.262 1.223 1.180 1.151 1.131 1.104 1.088 1.076 1.067 1.053 1.044 1.037 1.031 1.027 1.020 September 30, 2005............ 1.260 1.220 1.177 1.148 1.128 1.102 1.086 1.074 1.065 1.052 1.043 1.036 1.031 1.026 1.020 September 30, 2006............ 1.246 1.203 1.157 1.128 1.108 1.085 1.071 1.061 1.054 1.043 1.036 1.030 1.026 1.022 1.017 September 30, 2007............ 1.236 1.188 1.137 1.106 1.087 1.066 1.055 1.048 1.042 1.034 1.028 1.023 1.020 1.017 1.013 September 30, 2008............ 1.232 1.174 1.115 1.082 1.063 1.046 1.038 1.033 1.029 1.023 1.019 1.016 1.014 1.012 1.009 September 30, 2009............ 1.239 1.166 1.091 1.052 1.034 1.023 1.020 1.017 1.015 1.012 1.010 1.009 1.007 1.006 1.005 September 30, 2010............ 1.275 1.185 1.066 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
(c) In the event that the exact Change in Control Price and Change in Control Effective Date are not set forth in Section 12.10(b), if the Change in Control Price is: (i) between two Change in Control Price amounts on the table or the Change in Control Effective Date is between two dates on the table, the Adjustment Factor will be determined by straight-line interpolation between the Adjustment Factor set forth for the higher and lower Change in Control Price amounts and the two Change in Control Effective Dates, as applicable, based on a 365-day year; (ii) more than $120.00 per share, no adjustment will be made; and (iii) less than $20.91 per share, no adjustment will be made. 88 (d) Notwithstanding the provisions of this Section 12.10, in no event will the Capped Adjustment Multiplier exceed 1.2750. (e) The adjustment to the Capped Anti-Dilution Multiplier pursuant to this Section 12.10 will occur on the Change in Control Effective Date and will remain in effect only for purposes of determining the number of shares a Holder is entitled to receive if such Holder submits a Fundamental Change Election Notice and converts such Holder's Securities in connection with the Change in Control. Section 12.11 Notice of Adjustments. Whenever the Capped Anti-Dilution Multiplier or the Uncapped Anti-Dilution Multiplier is adjusted as herein provided: (a) the Company shall compute the adjusted Parity Share Number in accordance with Section 12.9 and 12.10 and shall prepare a certificate signed by its principal financial officer, Comptroller or Treasurer of the Company setting forth the adjusted Parity Share Number (and the Capped Anti-Dilution Multiplier and/or the Uncapped Anti-Dilution Multiplier, as the case may be) and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall promptly be filed with the Trustee and with each Conversion Agent; and (b) upon each such adjustment, a notice stating that the Parity Share Number has been adjusted and setting forth the adjusted Parity Share Number shall be required, and as soon as practicable after it is required, such notice shall be provided by the Company to all Holders in accordance with Section 1.6. Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to any such certificate or the information and calculations contained therein, except to exhibit the same to any Holder of Securities desiring inspection thereof at its office during normal business hours, and shall not be deemed to have knowledge of any adjustment in the Capped Anti-Dilution Multiplier, the Uncapped Anti-Dilution Multiplier or the Parity Share Number unless and until a Responsible Officer of the Trustee shall have received such a certificate. Until a Responsible Officer of the Trustee receives such a certificate, the Trustee and each Conversion Agent may assume without inquiry that the last Parity Share Number of which the Trustee has knowledge remains in effect. Section 12.12 Notice of Certain Corporate Action. In case: (a) the Company shall declare a dividend (or any other distribution) on its Common Stock payable (i) otherwise than exclusively in cash or (ii) exclusively in cash in an amount that would require any adjustment pursuant to Section 12.9; or (b) the Company shall authorize the granting to all or substantially all of the holders of its Common Stock of rights, options or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights; or (c) of any reclassification of the Common Stock, or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any 89 stockholders of the Company is required, or of the conveyance, sale, transfer or lease (other than a mere grant of security interest) of all or substantially all of the assets of the Company; or (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of Securities pursuant to Section 10.2, and shall cause to be provided to all Holders in accordance with Section 1.6, at least 20 days (or 10 days in any case specified in clause (a) or (b) above and 30 days for clause (c) above) prior to the applicable record or effective date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, rights, options or warrants are to be determined or (ii) the date on which such reclassification, consolidation, merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record will be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding up. Neither the failure to give such notice or the notice referred to in the following paragraph nor any defect therein shall affect the legality or validity of the proceedings described in clauses (a) through (d) of this Section. If at the time the Trustee shall not be the Conversion Agent, a copy of such notice shall also forthwith be filed by the Company with the Trustee. The Company shall cause to be filed at the Corporate Trust Office and each office or agency maintained for the purpose of conversion of Securities pursuant to Section 10.2, and shall cause to be provided to all Holders in accordance with Section 1.6, notice of any tender offer by the Company or any Subsidiary for all or any portion of the Common Stock at or about the time that such notice of tender offer is provided to the public generally. Section 12.13 Company to Provide Common Stock. As soon as practicable, the Company shall reserve for issuance upon conversion of Securities an amount of shares of Common Stock sufficient for the purpose of effecting the conversion of all of the Outstanding Securities. Section 12.14 Taxes on Conversions. Except as provided in the next sentence, the Company will pay all stamp taxes and other duties that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Securities pursuant to Article XII. The Company shall not, however, be required to pay any tax or duty (i) in respect of income of the Holder or (ii) caused by a Holder's request that the shares of Common Stock deliverable upon conversion be issued in a name other than its own. Certificates representing shares of Common Stock will be issued or delivered only after all applicable taxes and duties payable by the Holder, if any, are paid. The Company agrees, and each Holder is deemed to agree, that delivery to such Holder of the full number of shares of Common Stock into which each Security is convertible, together with the cash portion of any Conversion Consideration and any cash payment of such Holder's 90 fractional shares in accordance with Section 12.8, will be treated as a contingent payment (in an amount equal to the sum of the then Fair Market Value of such Common Stock and such cash payment, if any) on the Securities for purposes of the Contingent Payment Debt Regulations governing contingent payment debt obligations. If the Conversion Consideration paid by the Company to a Holder upon conversion of the Securities pursuant to this Article XII is not sufficient to allow the Company to comply with the U.S. federal withholding tax obligations imposed by the Code with respect to accrued and unpaid Interest on the Securities payable to the beneficial owner of such Securities, the Company may, to the extent required by applicable law, recoup or set-off such liability against any amounts owed to such Holder, including, but not limited to, the shares of Common Stock to be issued upon conversion to such beneficial owner or any actual cash dividends or distributions subsequently made with respect to such shares of Common Stock to such beneficial owner. If the Parity Share Number is adjusted pursuant to this Indenture, to the extent such adjustment results in a constructive distribution to beneficial owners of Securities under Section 305 of the Code, which distribution gives rise to a U.S. federal withholding tax liability, the Company may, to the extent required by law, recoup or set-off such liability against any payments (whether in cash or Common Stock) made with respect to the Securities (or any payment with respect to Common Stock received upon conversion thereof) to such beneficial owners. Section 12.15 Covenant as to Common Stock. The Company agrees that all shares of Common Stock that may be delivered upon conversion of Securities, upon such delivery, will be newly issued shares and will have been duly authorized and validly issued and will be fully paid and nonassessable and, except as provided in Section 12.14, the Company will pay all taxes, liens and charges with respect to the issue thereof. Section 12.16 Cancellation of Converted Securities. All Securities delivered for conversion shall be delivered to the Trustee or its agent to be canceled by or at the direction of the Trustee, which shall dispose of the same as provided in Section 3.13. Section 12.17 Rights Issued in Respect of Common Stock. Rights or warrants distributed by the Company to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events identified in the instruments governing such rights or warrants ("Trigger Event"): (a) are deemed to be transferred with such shares of Common Stock, (b) are not exercisable, and (c) are also issued in respect of future issuances of Common Stock, shall not be deemed distributed for purposes of Section 12.9(f) until the occurrence of the earliest Trigger Event. In addition, in the event of any distribution of rights or warrants, or any Trigger Event with respect thereto, that shall have resulted in an adjustment to the Uncapped Ant-Dilution Multiplier under Section 12.9(f), (1) in the case of any such rights or warrants that shall 91 all have been redeemed or repurchased without exercise by any holders thereof, the Uncapped Ant-Dilution Multiplier shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of any such rights or warrants all of which shall have expired without exercise by any holder thereof, the Uncapped Ant-Dilution Multiplier shall be readjusted as if such issuance had not occurred. Section 12.18 Responsibility of Trustee for Conversion Provisions. The Trustee, subject to the provisions of Section 6.1, and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Securities to determine whether any facts exist that may require any adjustment of the Parity Share Number, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, herein or in any supplemental indenture provided to be employed, in making the same, or whether a supplemental indenture need be entered into. Neither the Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent shall be accountable with respect to the validity or value (or the kind or amount) of any Common Stock, or of any other securities or property or cash, which may at any time be issued or delivered upon the conversion of any Security; and it or they do not make any representation with respect thereto. Neither the Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent shall be responsible for any failure of the Company to make or calculate any cash payment or to issue, transfer or deliver any shares of Common Stock or share certificates or other securities or property or cash upon the surrender of any Security for the purpose of conversion; and the Trustee, subject to the provisions of Section 6.1, and any Conversion Agent shall not be responsible for any failure of the Company to comply with any of the covenants of the Company contained in this Article. ARTICLE XIII REPURCHASE OF SECURITIES Section 13.1 Repurchase Rights. (a) Holders will have the right to require the Company to repurchase the Securities on September 30, 2010, September 30, 2015, September 30, 2020, September 30, 2025 and September 30, 2030 (each such date, a "Repurchase Date"). The repurchase price payable will be equal to 100% of the Accreted Principal Amount of the Securities to be repurchased, plus accrued and unpaid Interest, if any, to, but not including, the applicable Repurchase Date (the "Repurchase Price"). The Company will be required to repurchase any outstanding Securities for which a Holder delivers a written repurchase notice to the Paying Agent substantially in the form in Section 2.2 (the "Repurchase Notice"). Such notice must be delivered by a Holder during the period beginning at any time from the opening of business on the date that is 22 Business Days prior to the relevant Repurchase Date until the close of business on the second Business Day prior to the applicable Repurchase Date. If the Repurchase Notice is given and withdrawn during such period, the Company will not be obligated to repurchase the related Securities. The Company will pay the Repurchase Price for any Securities submitted for repurchase on the Repurchase Date solely in cash. 92 (b) The Company will give notice to each Holder in accordance with Section 1.6 at least 22 Business Days prior to each Repurchase Date as required by applicable law, stating, among other things, the procedures that Holders must follow to require the Company to repurchase the Securities. (c) The Repurchase Notice given by each Holder electing to require the Company to repurchase Securities on the Repurchase Date must be given so as to be received by the Paying Agent no later than the close of business on the second Business Day immediately preceding the Repurchase Date and must state: (i) if certificated, the certificate numbers of the Securities to be delivered for repurchase; (ii) the portion of the Initial Principal Amount of Securities to be repurchased, which must be $1,000 or an integral multiple thereof; and (iii) that the Securities are to be repurchased by the Company pursuant to the applicable provisions of the Securities and this Indenture. If the Securities are Global Securities, the withdrawal notice must comply with the Applicable Procedures. (d) A Holder may withdraw any Repurchase Notice by delivering a written notice of withdrawal to the Paying Agent prior to the close of business on the second Business Day immediately preceding the applicable Repurchase Date. The notice of withdrawal must state: (i) the Initial Principal Amount of Securities being withdrawn; (ii) if certificated, the certificate numbers of the Securities being withdrawn; and (iii) the Initial Principal Amount, if any, of the Securities that remain subject to the Repurchase Notice. If the Securities are Global Securities, the withdrawal notice must comply with the Applicable Procedures. (e) In connection with any repurchase, the Company will, to the extent applicable: (i) comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act which may then be applicable; and (ii) file a Schedule TO and any other required schedule under the Exchange Act. (f) The Company's obligation to pay the Repurchase Price for Securities for which a Repurchase Notice has been delivered and not validly withdrawn is conditioned upon the following: A Holder must either effect book-entry transfer or deliver the Securities (if they are in certificated form), together with necessary endorsements, to the office of the Paying Agent after delivery of the Repurchase Notice to receive payment of the Repurchase Price. The Company will cause the Repurchase Price for the Securities to be paid promptly following the later of the applicable Repurchase Date or the time of book-entry transfer or delivery of the Securities, together with such endorsements. (g) The Company shall deposit cash, at the time and in the manner contemplated by Section 11.5, sufficient to pay the Repurchase Price of all Securities to be repurchased hereunder. If the Paying Agent holds money sufficient to pay the Repurchase Price of the Securities for which a Repurchase Notice has been given on the second Business Day immediately following the applicable Repurchase Date in accordance with the terms of this Indenture, then, immediately after such Repurchase Date, the Securities will cease to be 93 Outstanding and Interest, if any, on the Securities will cease to accrue, whether or not the Securities are delivered to the Paying Agent, and all other rights of the Holder shall terminate, other than the right to receive the Repurchase Price upon delivery of the Securities. Section 13.2 Exchange in Lieu of Repurchase. If a Holder exercises its right to require the Company to repurchase any of such Holder's Securities pursuant to Section 13.1 hereof, the Company may cause the Securities first to be offered to a financial institution chosen by the Company for exchange in lieu of repurchase. In order to accept any Securities surrendered for repurchase, the designated institution must agree to deliver, in exchange for such Securities, the Repurchase Price for such Securities that the Holder of such Securities would otherwise receive upon repurchase by the Company. If the designated institution accepts any such Securities for repurchase, it will deliver the Repurchase Price to the Paying Agent. Any Securities purchased by the designated institution will remain Outstanding. If the designated institution agrees to accept any Securities for repurchase but does not timely deliver the related Repurchase Price payment, the Company will, as promptly as practical thereafter, but not later than one Business Day following the applicable Repurchase Date, cause the Repurchase Price for the Securities to be paid; provided, however, if such designated institution declines to accept any Securities surrendered for repurchase, the Company will repurchase the Securities pursuant to Section 13.1 hereof. The Company will not pay any consideration to, or otherwise enter into any arrangement with, the designated institution for or with respect to such designation. ARTICLE XIV HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE Section 14.1 Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the Trustee: (a) semi-annually, not more than 15 days after the Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities as of such Regular Record Date, and (b) at such other times as the Trustee may reasonably request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that no such list need be furnished so long as the Trustee is acting as Security Registrar. Section 14.2 Preservation of Information. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 14.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list, if any, furnished to it as provided in Section 14.1 upon receipt of a new list so furnished. (b) After this Indenture has been qualified under the Trust Indenture Act, the rights of Holders to communicate with other Holders with respect to their rights under this 94 Indenture or under the Securities, and the corresponding rights, and duties of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. Section 14.3 Reports by Trustee. (a) After this Indenture has been qualified under the Trust Indenture Act, the Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. (b) After this Indenture has been qualified under the Trust Indenture Act, a copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when the Securities are listed on any stock exchange. Section 14.4 Reports by Company. After this Indenture has been qualified under the Trust Indenture Act, the Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with the Trustee within 15 days after the same is filed with the Commission. Section 14.5 Calculations in Respect of Securities. The Company will be responsible for making any calculations called for under the Securities. These calculations include, but are not limited to, determinations of the Trading Price of the Securities and the Closing Price of the Common Stock, any accrued Interest payable on the Securities, the Capped Anti-Dilution Multiplier, the Uncapped Anti-Dilution Multiplier, the Parity Share Number and the projected payment schedule with respect to the Securities. The Company will make these calculations in good faith and, absent manifest error, its calculations will be final and binding on the Holders of Securities. The Company will provide a schedule of its calculations to the Trustee, and the Trustee is entitled to rely upon the accuracy of the Company's calculations without independent verification. The Trustee will forward the Company's calculations to any Holder of Securities upon a written request by such Holder. ARTICLE XV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS 95 Section 15.1 Indenture and Securities Solely Corporate Obligations. No recourse for the payment of the principal amount of or Interest on any Security and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any past, present or future incorporator, stockholder, employee, agent, officer, or director or subsidiary, as such, of the Company or of any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Securities. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 96 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written. CONSECO, INC. By: /s/ Daniel J. Murphy --------------------------------- Name: Daniel J. Murphy Title: Senior Vice President and Treasurer THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee By: /s/ L. Garcia ---------------------------------- Name: L. Garcia Title: Assistant Vice President 97 ANNEX A -- Form of Unrestricted Securities Certificate UNRESTRICTED SECURITIES CERTIFICATE (For removal of Restricted Securities Legend pursuant to Section 3.6) THE BANK OF NEW YORK TRUST COMPANY, N.A. 2 N. LaSalle Street, Suite 1020 Chicago, Illinois 60602 Attn: Corporate Trust Administration RE: 3.50% CONVERTIBLE DEBENTURES DUE SEPTEMBER 30, 2035 OF CONSECO, INC. (THE "SECURITIES") Reference is made to the Indenture, dated as of August 15, 2005 (the "Indenture"), from Conseco, Inc. (the "Company") to The Bank of New York Trust Company, N.A., as Trustee. Terms used herein and defined in the Indenture or in Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are used herein as so defined. This certificate relates to U.S.$___ principal amounts of Securities, which are evidenced by the following certificate(s) (the "Specified Securities"): CUSIP No. [_________] CERTIFICATE No(s). _________________ The person in whose name this certificate is executed below (the "Undersigned") hereby certifies that either (i) it is the sole beneficial owner of the Specified Securities or (ii) it is acting on behalf of all the beneficial owners of the Specified Securities and is duly authorized by them to do so. Such beneficial owner or owners are referred to herein collectively as the "Owner". If the Specified Securities are represented by a Global Security, they are held through the Depositary or an Agent Member in the name of the Undersigned, as or on behalf of the Owner. If the Specified Securities are not represented by a Global Security, they are registered in the name of the Undersigned, as or on behalf of the Owner. The Owner has requested that the Specified Securities be exchanged for Securities bearing no Restricted Securities Legend pursuant to Section 3.6 of the Indenture. In connection with such exchange, the Owner hereby certifies that the exchange is occurring after a period of at least two years has elapsed since the Issue Date, and the Owner is not, and during the preceding three months has not been, an affiliate of the Company. The Owner also acknowledges that any future transfers of the Specified Securities must comply with all applicable securities laws of the States of the United States and other jurisdictions. This certificate and the statements contained herein are made for your benefit and the benefit of the Company and the Initial Purchasers. Dated: ________________________ A-1 (Print the name of the Undersigned, as such term is defined in the third paragraph of this certificate.) By: ----------------------------- Name: Title: (If the Undersigned is a corporation, partnership or fiduciary, the title of the person signing on behalf of the Undersigned must be stated.) A-2 ANNEX B -- Form of Surrender Certificate In connection with the certification contemplated by Section 12.6 relating to compliance with certain restrictions relating to transfers of Restricted Securities, such certification shall be provided substantially in the form of the following certificate, with only such changes thereto as shall be approved by the Company and the Initial Purchasers. CERTIFICATE CONSECO, INC. 3.50% CONVERTIBLE DEBENTURES DUE SEPTEMBER 30, 2035 This is to certify that as of the date hereof with respect to U.S. $___principal amount of the above-captioned securities surrendered on the date hereof (the "Surrendered Securities") for registration of transfer, or for conversion or repurchase where the securities issuable upon such conversion or repurchase are to be registered in a name other than that of the undersigned Holder (each such transaction being a "transfer"), the undersigned Holder (as defined in the Indenture) certifies that the transfer of Surrendered Securities associated with such transfer complies with the restrictive legend set forth on the face of the Surrendered Securities for the reason checked below: ______ The transfer of the Surrendered Securities complies with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"); or ______ The transfer of the Surrendered Securities complies with Rule 144 under the Securities Act; or ______ The transfer of the Surrendered Securities has been made to an institution that is an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act in a transaction exempt from the registration requirements of the Securities Act and a signed letter containing certain representations and agreements relating to restrictions on transfer of the Securities has been delivered (and if such transfer is for an aggregate principal amount less than $250 thousand an opinion of counsel acceptable to the Company if requested by the Company, that such transfer is exempt from registration); or ______ The transfer of the Surrendered Securities has been made pursuant to an exemption from registration under the Securities Act and an opinion of counsel has been delivered to the Company with respect to such transfer. [Name of Holder] Dated: _______________ *To be dated the date of surrender B-1 EX-4 3 rights.txt EXHIBIT 4.5 Exhibit 4.5 EXECUTION COPY Conseco, Inc. 3.50% Convertible Debentures due September 30, 2035 Registration Rights Agreement August 15, 2005 Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated J.P. Morgan Securities Inc. As representatives of the several Purchasers named in Schedule I to the Purchase Agreement c/o Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 c/o Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 c/o J.P. Morgan Securities Inc. 277 Park Avenue New York, New York 10172 Ladies and Gentlemen: Conseco, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the Purchasers (as defined herein) upon the terms set forth in the Purchase Agreement (as defined herein) its 3.50% Convertible Debentures due September 30, 2035 (the "Securities"). As an inducement to the Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Purchasers thereunder, the Company agrees with the Purchasers for the benefit of Holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows: 1. Definitions. (a) Capitalized terms used herein without definition shall have the meanings ascribed to them in the Purchase Agreement. As used in this Agreement, the following defined terms shall have the following meanings: "Additional Interest" has the meaning assigned thereto in Section 7(a) hereof. "Affiliate" of any specified person means any other person which, directly or indirectly, is in control of, is controlled by, or is under common control with such specified person. For purposes of this definition, control of a person means the power, direct or indirect, to direct or cause the direction of the management and policies of such person whether by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Closing Date" means the First Time of Delivery as defined in the Purchase Agreement. "Commission" means the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. "Common Stock" means the Company's common stock, par value $0.01 per share. "DTC" means The Depository Trust Company. "Effective Date" has the meaning assigned thereto in Section 2(b)(i) hereof. "Effective Failure" has the meaning assigned thereto in Section 7(b) hereof. "Effectiveness Period" has the meaning assigned thereto in Section 2(b)(i) hereof. "Effective Time" means the time at which the Commission declares the Shelf Registration Statement effective or at which the Shelf Registration Statement otherwise becomes effective. "Electing Holder" has the meaning assigned thereto in Section 3(a)(iii) hereof. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended. "Holder" means any person that is the record owner of Registrable Securities (and includes any person that has a beneficial interest in any Registrable Security in book-entry form). "Indenture" means the Indenture, dated as of August 15, 2005, between the Company and The Bank of New York Trust Company, N.A., as amended and supplemented from time to time in accordance with its terms. "Managing Underwriters" means the investment banker or investment bankers and manager or managers that shall administer an underwritten offering, if any, conducted pursuant to Section 6 hereof. "NASD Rules" means the Rules of the National Association of Securities Dealers, Inc., as amended from time to time. "Notice and Questionnaire" means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Appendix A hereto. The term "person" means an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. 2 "Prospectus" means the prospectus (including, without limitation, any preliminary prospectus, any final prospectus and any prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act) included in the Shelf Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by the Shelf Registration Statement and by all other amendments and supplements to such prospectus, including all material incorporated by reference in such prospectus and all documents filed after the date of such prospectus by the Company under the Exchange Act and incorporated by reference therein. "Purchase Agreement" means the purchase agreement, dated as of August 9, 2005, between the Purchasers and the Company relating to the Securities. "Purchasers" means the Purchasers named in Schedule I to the Purchase Agreement. "Registrable Securities" means all or any portion of the Securities issued from time to time under the Indenture in registered form and the shares of Common Stock issuable upon conversion of such Securities; provided, however, that a security ceases to be a Registrable Security when it is no longer a Restricted Security. "Registration Default" has the meaning assigned thereto in Section 7(a) hereof. "Restricted Security" means any Security or share of Common Stock issuable upon conversion thereof except any such Security or share of Common Stock that (i) has been effectively registered under the Securities Act and sold in a manner contemplated by the Shelf Registration Statement, (ii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any successor provision thereto) or (iii) has otherwise been transferred and a new Security or share of Common Stock not subject to transfer restrictions under the Securities Act has been delivered by or on behalf of the Company in accordance with Section 3.6 of the Indenture. "Rules and Regulations" means the published rules and regulations of the Commission promulgated under the Securities Act or the Exchange Act, as in effect at any relevant time. "Securities Act" means the United States Securities Act of 1933, as amended. "Shelf Registration" means a registration effected pursuant to Section 2 hereof. "Shelf Registration Statement" means a "shelf" registration statement filed under the Securities Act providing for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities pursuant to Rule 415 under the Securities Act and/or any similar rule that may be adopted by the Commission, filed by the Company pursuant to the provisions of Section 2 of this Agreement, including the Prospectus contained therein, any amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement. 3 "Trust Indenture Act" means the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, as the same shall be amended from time to time. The term "underwriter" means any underwriter of Registrable Securities in connection with an offering thereof under a Shelf Registration Statement. (b) Wherever there is a reference in this Agreement to a percentage of the "principal amount" of Registrable Securities or to a percentage of Registrable Securities, Common Stock shall be treated as representing the principal amount of Securities that was surrendered for conversion or exchange in order to receive such number of shares of Common Stock. 2. Shelf Registration. (a) The Company shall, no later than 90 calendar days following the Closing Date, file with the Commission a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement and, thereafter, shall use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective under the Securities Act no later than 210 calendar days following the Closing Date; provided, however, that the Company may, upon written notice to all Holders, postpone having the Shelf Registration Statement declared effective for a reasonable period not to exceed 90 days if the Company possesses material non-public information, the disclosure of which would have a material adverse effect on the Company and its subsidiaries taken as a whole; provided, further, however, that no Holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or to use the Prospectus forming a part thereof for resales of Registrable Securities unless such Holder is an Electing Holder. (b) The Company shall use its reasonable best efforts: (i) to keep the Shelf Registration Statement continuously effective under the Securities Act in order to permit the Prospectus forming a part thereof to be usable by Holders until the earliest of (1) the sale of all Registrable Securities registered under the Shelf Registration Statement; (2) the expiration of the period referred to in Rule 144(k) of the Securities Act with respect to all Registrable Securities held by Persons that are not Affiliates of the Company; and (3) two years from the date (the "Effective Date") such Shelf Registration Statement is declared effective (such period being referred to herein as the "Effectiveness Period"); (ii) after the Effective Time of the Shelf Registration Statement, promptly upon the request of any Holder of Registrable Securities that is not then an Electing Holder, to take any action reasonably necessary to enable such Holder to use the Prospectus forming a part thereof for resales of Registrable Securities, including, without limitation, any action necessary to identify such Holder as a selling securityholder in the Shelf Registration Statement; provided, however, that nothing in this subparagraph shall relieve such Holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(ii) hereof; and provided 4 further, that the Company will be under no obligation to file a post-effective amendment to add any Holder of Registrable Securities to the Shelf Registration Statement more than once per calendar quarter for all such Holders; and (iii) if at any time the Securities, pursuant to Article XII of the Indenture, are convertible into securities other than Common Stock, to cause, or to cause any successor under the Indenture to cause, such securities to be included in the Shelf Registration Statement no later than the date on which the Securities may then be convertible into such securities. The Company shall be deemed not to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if the Company voluntarily takes any action that would result in Holders of Registrable Securities covered thereby not being able to offer and sell any of such Registrable Securities during that period, unless such action is (A) required by applicable law and the Company thereafter promptly complies with the requirements of paragraph 3(j) below or (B) permitted pursuant to Section 2(c) below. (c) The Company may suspend the use of the Prospectus for a period not to exceed 30 days in any 90-day period or an aggregate of 90 days in any 12-month period if the Board of Directors of the Company shall have determined in good faith that because of valid business reasons (not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of assets, pending corporate developments, public filings with the Commission and similar events, it is in the best interests of the Company to suspend such use, and prior to suspending such use the Company provides the Holders with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension. 3. Registration Procedures. In connection with the Shelf Registration Statement, the following provisions shall apply: (a) (i) Not less than 30 calendar days prior to the Effective Time of the Shelf Registration Statement, the Company shall mail the Notice and Questionnaire to the Holders of Registrable Securities. No Holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement as of the Effective Time, and no Holder shall be entitled to use the Prospectus forming a part thereof for resales of Registrable Securities at any time, unless such Holder has returned a completed and signed Notice and Questionnaire to the Company by the deadline for response set forth therein; provided, however, Holders of Registrable Securities shall have at least 28 calendar days from the date on which the Notice and Questionnaire is first mailed to such Holders to return a completed and signed Notice and Questionnaire to the Company. (ii) After the Effective Time of the Shelf Registration Statement, the Company shall, upon the request of any Holder of Registrable Securities that is not then an Electing Holder, promptly send a Notice and Questionnaire to such Holder. The Company shall not be required to take any action to name such Holder as a selling securityholder in the Shelf Registration Statement or to enable such Holder to use the Prospectus forming a part thereof for resales of Registrable Securities until such Holder 5 has returned a completed and signed Notice and Questionnaire to the Company; and, for the avoidance of doubt, it is understood that the Company will be under no obligation to file a post-effective amendment to add any Holder of Registrable Securities to the Shelf Registration Statement more than once per calendar quarter for all such Holders. If a Notice and Questionnaire is delivered to the Company during the periods specified in Section 2(c), the Company shall not be obligated to take action to name the Holder delivering such Notice and Questionnaire as a selling security holder in the Shelf Registration Statement until the termination of such period. (iii) The term "Electing Holder" shall mean any Holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(i) or 3(a)(ii) hereof. (b) Upon request by an Electing Holder, the Company shall furnish to each Electing Holder, prior to the Effective Time, a copy of the Shelf Registration Statement initially filed with the Commission, and shall furnish to such Holders, prior to the filing thereof with the Commission, copies of each amendment thereto and each amendment or supplement, if any, to the Prospectus included therein, and shall use its reasonable best efforts to reflect in each such document, at the Effective Time or when so filed with the Commission, as the case may be, such comments as such Holders and their respective counsel reasonably may propose. (c) The Company shall promptly take such action as may be necessary so that (i) each of the Shelf Registration Statement and any amendment thereto and the Prospectus forming a part thereof and any amendment or supplement thereto (and each report or other document incorporated therein by reference in each case) complies in all material respects with the Securities Act and the Exchange Act and the respective rules and regulations thereunder, (ii) each of the Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) each of the Prospectus forming a part of the Shelf Registration Statement, and any amendment or supplement to such Prospectus, does not at any time during the Effectiveness Period include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) The Company shall promptly advise each Electing Holder, and shall confirm such advice in writing if so requested by any such Electing Holder: (i) when a Shelf Registration Statement and any amendment thereto has been filed with the Commission and when a Shelf Registration Statement or any post-effective amendment thereto has become effective, in each case making a public announcement thereof by release made to Reuters Economic Services and Bloomberg Business News; (ii) of any request by the Commission for amendments or supplements to the Shelf Registration Statement or the Prospectus included therein or for additional information; 6 (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of any proceedings for such purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the securities included in the Shelf Registration Statement for sale in any jurisdiction or the initiation of any proceeding for such purpose; and (v) of the occurrence of any event or the existence of any state of facts that requires the making of any changes in the Shelf Registration Statement or the Prospectus included therein so that, as of such date, such Shelf Registration Statement and Prospectus do not contain an untrue statement of a material fact and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading (which advice shall be accompanied by an instruction to such Holders to suspend the use of the Prospectus until the requisite changes have been made, and which advice need not specify the nature of the event giving rise to such suspension). (e) The Company shall use its reasonable best efforts to prevent the issuance, and if issued to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Shelf Registration Statement. (f) The Company shall furnish to each Electing Holder who so requests, without charge, at least one copy of the Shelf Registration Statement and all post-effective amendments thereto, including financial statements and schedules, and, if such Electing Holder so requests in writing, all reports, other documents and exhibits that are filed with or incorporated by reference in the Shelf Registration Statement. (g) The Company shall, during the Effectiveness Period, deliver to each Electing Holder, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such Electing Holder may reasonably request; and the Company consents (except during the periods specified in Section 2(c) above or during the continuance of any event or the existence of any state of facts described in Section 3(d)(v) above) to the use of the Prospectus and any amendment or supplement thereto by each of the Electing Holders in connection with the offering and sale of the Registrable Securities covered by the Prospectus and any amendment or supplement thereto during the Effectiveness Period. (h) Prior to any offering of Registrable Securities pursuant to the Shelf Registration Statement, the Company shall (i) register or qualify or cooperate with the Electing Holders and their respective counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or "blue sky" laws of such jurisdictions within the United States as any Electing Holder may reasonably request, (ii) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers and sales in such jurisdictions for so long as may be necessary to enable any Electing Holder or 7 underwriter, if any, to complete its distribution of Registrable Securities pursuant to the Shelf Registration Statement, and (iii) take any and all other actions necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities; provided, however, that in no event shall the Company be obligated to (A) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to so qualify but for this Section 3(h) or (B) file any general consent to service of process in any jurisdiction where it is not as of the date hereof so subject. (i) Unless any Registrable Securities shall be in book-entry only form, the Company shall cooperate with the Electing Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to the Shelf Registration Statement, which certificates, if so required by any securities exchange upon which any Registrable Securities are listed, shall be penned, lithographed or engraved, or produced by any combination of such methods, on steel engraved borders, and which certificates shall be free of any restrictive legends and in such permitted denominations and registered in such names as Electing Holders may request in connection with the sale of Registrable Securities pursuant to the Shelf Registration Statement. (j) Upon the occurrence of any event or the existence of any state of facts contemplated by paragraph 3(d)(v) above during the Effectiveness Period, the Company shall (subject to its right to suspend the use of the Prospectus pursuant to Section 2(c)) promptly prepare a post-effective amendment to any Shelf Registration Statement or an amendment or supplement to the related Prospectus or file any other required document with the Commission so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. If the Company notifies the Electing Holders of the occurrence of any event or the existence of any state of facts contemplated by paragraph 3(d)(v) above, the Electing Holder shall suspend the use of the Prospectus until the requisite changes to the Prospectus have been made (or, in the event that the Company exercises its suspension rights under Section 2(c), until the end of the suspension period). (k) Not later than the Effective Time of the Shelf Registration Statement, the Company shall provide a CUSIP number for the Registrable Securities that are debt securities. (l) The Company shall use its reasonable best efforts to comply with all applicable Rules and Regulations, and to make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after (i) the effective date (as defined in Rule 158(c) under the Securities Act) of the Shelf Registration Statement, (ii) the effective date of each post-effective amendment to the Shelf Registration Statement, and (iii) the date of each filing by the Company with the Commission of an Annual Report on Form 10-K that is incorporated by reference in the Shelf Registration Statement, an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158). 8 (m) Not later than the Effective Time of the Shelf Registration Statement, the Company shall cause the Indenture to be qualified under the Trust Indenture Act; in connection with such qualification, the Company shall cooperate with the Trustee under the Indenture and the Holders (as defined in the Indenture) to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and the Company shall execute, and shall use all reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner. In the event that any such amendment or modification referred to in this Section 3(m) involves the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (n) In the event of an underwritten offering conducted pursuant to Section 6 hereof, the Company shall, if requested, promptly include or incorporate in a Prospectus supplement or post-effective amendment to the Shelf Registration Statement such information as the Managing Underwriters reasonably agree should be included therein and to which the Company does not reasonably object and shall make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after it is notified of the matters to be included or incorporated in such Prospectus supplement or post-effective amendment. (o) The Company shall enter into such customary agreements (including an underwriting agreement in customary form in the event of an underwritten offering conducted pursuant to Section 6 hereof) and take all other appropriate action in order to expedite and facilitate the registration and disposition of the Registrable Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures substantially identical to those set forth in Section 5 hereof with respect to all parties to be indemnified pursuant to Section 5 hereof. (p) The Company shall: (i)(A) make reasonably available for inspection by the Electing Holders, any underwriter participating in any disposition pursuant to the Shelf Registration Statement, and any attorney, accountant or other agent retained by such Electing Holders or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and (B) cause the Company's officers, directors and employees to supply all information reasonably requested by such Electing Holders or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as is customary for similar due diligence examinations; provided, however, that all records, information and documents that are designated in writing by the Company, in good faith, as confidential shall be kept confidential by such Electing Holders and any such underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such records, information or documents become available to the public generally or through a third party without an accompanying obligation of confidentiality; and provided further that, if the foregoing inspection and 9 information gathering would otherwise disrupt the Company's conduct of its business, such inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of the Electing Holders and the other parties entitled thereto by one counsel designated by and on behalf of the Electing Holders and other parties; (ii) in connection with any underwritten offering conducted pursuant to Section 6 hereof, make such representations and warranties to the Electing Holders participating in such underwritten offering and to the Managing Underwriters, in form, substance and scope as are customarily made by the Company to underwriters in primary underwritten offerings of equity and convertible debt securities and covering matters including, but not limited to, those set forth in the Purchase Agreement; (iii) in connection with any underwritten offering conducted pursuant to Section 6 hereof, obtain opinions of counsel to the Company (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing Underwriters) addressed to each Electing Holder participating in such underwritten offering and the underwriters, covering such matters as are customarily covered in opinions requested in primary underwritten offerings of equity and convertible debt securities and such other matters as may be reasonably requested by such Electing Holders and underwriters (it being agreed that the matters to be covered by such opinions shall include, without limitation, as of the date of the opinion and as of the Effective Time of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from the Shelf Registration Statement and the Prospectus, including the documents incorporated by reference therein, of an untrue statement of a material fact or the omission of a material fact required to be stated therein (in the case of the Prospectus, in the light of the circumstances in which they were made) or necessary to make the statements therein not misleading; (iv) in connection with any underwritten offering conducted pursuant to Section 6 hereof, obtain "cold comfort" letters and updates thereof from the independent public accountants of the Company (and, if necessary, from the independent public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Shelf Registration Statement), addressed to each Electing Holder participating in such underwritten offering (if such Electing Holder has provided such letter, representations or documentation, if any, required for such cold comfort letter to be so addressed) and the underwriters, in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with primary underwritten offerings; (v) in connection with any underwritten offering conducted pursuant to Section 6 hereof, deliver such documents and certificates as may be reasonably requested by any Electing Holders participating in such underwritten offering and the Managing Underwriters, if any, including, without limitation, certificates to evidence compliance with Section 3(j) hereof and with any conditions contained in the underwriting agreement or other agreements entered into by the Company. 10 (q) The Company will use its reasonable best efforts to cause the Common Stock issuable upon conversion of the Securities to be quoted or listed on the New York Stock Exchange or other stock exchange or trading system on which the Common Stock primarily trades on or prior to the Effective Time of the Shelf Registration Statement hereunder. (r) In the event that any broker-dealer registered under the Exchange Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or any successor provision thereto)) of the Company or has a "conflict of interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor provision thereto)) and such broker-dealer shall underwrite, participate as a member of an underwriting syndicate or selling group or assist in the distribution of any Registrable Securities covered by the Shelf Registration Statement, whether as a Holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company shall assist such broker-dealer in complying with the requirements of the NASD Rules, including, without limitation, by (A) engaging a "qualified independent underwriter" (as defined in Rule 2720(b)(15) of the NASD Rules (or any successor provision thereto)) to participate in the preparation of the registration statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and to recommend the public offering price of such Registrable Securities, (B) indemnifying such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof, and (C) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the NASD Rules. (s) The Company shall use its reasonable best efforts to take all other steps necessary to effect the registration, offering and sale of the Registrable Securities covered by the Shelf Registration Statement contemplated hereby. 4. Registration Expenses. Except as otherwise provided in Section 3, the Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 2, 3 and 6 hereof and shall bear or reimburse the Electing Holders for the reasonable fees and disbursements of a single counsel selected by a plurality of all Electing Holders who own an aggregate of not less than 25% of the Registrable Securities covered by the Shelf Registration Statement to act as counsel therefore in connection therewith. Each Electing Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Electing Holder's Registrable Securities pursuant to the Shelf Registration Statement. 5. Indemnification and Contribution. (a) Indemnification by the Company. Upon the registration of the Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify and hold harmless each Electing Holder and each underwriter, selling agent or other securities professional, if any, which facilitates the disposition of Registrable Securities, and each of their respective officers and directors and each person who controls such Electing Holder, underwriter, selling agent or other securities professional within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such person being sometimes referred to as an "Indemnified Person") against any losses, claims, damages or liabilities, joint or several, to which such Indemnified 11 Person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement under which such Registrable Securities are to be registered under the Securities Act, or any Prospectus contained therein or furnished by the Company to any Indemnified Person, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company hereby agrees to reimburse such Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such Indemnified Person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Shelf Registration Statement or Prospectus, or amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by such Indemnified Person expressly for use therein. (b) Indemnification by the Electing Holders and any Agents and Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of any of such Electing Holder's Registrable Securities in such Shelf Registration Statement, and each underwriter, selling agent or other securities professional, if any, which facilitates the disposition of Registrable Securities shall agree, as a consequence of facilitating such disposition of Registrable Securities, severally and not jointly, to (i) indemnify and hold harmless the Company, its directors, officers who sign any Shelf Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which the Company or such other persons may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such Shelf Registration Statement or Prospectus, or any amendment or supplement, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Electing Holder, underwriter, selling agent or other securities professional expressly for use therein, and (ii) reimburse the Company for any legal or other expenses reasonably incurred by the Company or any such person in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 5, notify such indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under the indemnification provisions of or contemplated by subsection (a) or (b) above. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, 12 such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party under this Section 5 for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. (d) Contribution. If the indemnification provided for in this Section 5 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation (even if the Electing Holders or any underwriters, selling agents or other securities professionals or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 5(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Electing Holders and any underwriters, selling agents or other securities professionals in this Section 5(d) to contribute shall be several in proportion to the percentage of principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint. 13 (e) Notwithstanding any other provision of this Section 5, in no event will any (i) Electing Holder be required to undertake liability to any person under this Section 5 for any amounts in excess of the dollar amount of the proceeds to be received by such Holder from the sale of such Holder's Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) pursuant to any Shelf Registration Statement under which such Registrable Securities are to be registered under the Securities Act and (ii) underwriter, selling agent or other securities professional be required to undertake liability to any person hereunder for any amounts in excess of the discount, commission or other compensation payable to such underwriter, selling agent or other securities professional with respect to the Registrable Securities underwritten by it and distributed to the public. (f) The obligations of the Company under this Section 5 shall be in addition to any liability which the Company may otherwise have to any Indemnified Person and the obligations of any Indemnified Person under this Section 5 shall be in addition to any liability which such Indemnified Person may otherwise have to the Company. The remedies provided in this Section 5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to an indemnified party at law or in equity. 6. Underwritten Offering. Any Holder of Registrable Securities who desires to do so may sell Registrable Securities (in whole or in part) in an underwritten offering; provided that (i) the Electing Holders of at least 33-1/3% in aggregate principal amount of the Registrable Securities then covered by the Shelf Registration Statement shall request such an offering and (ii) at least such aggregate principal amount of such Registrable Securities shall be included in such offering; and provided further that the Company shall not be obligated to cooperate with more than one underwritten offering during the Effectiveness Period. Upon receipt of such a request, the Company shall provide all Holders of Registrable Securities written notice of the request, which notice shall inform such Holders that they have the opportunity to participate in the offering. In any such underwritten offering, the investment banker or bankers and manager or managers that will administer the offering will be selected by, and the underwriting arrangements with respect thereto (including the size of the offering) will be approved by, the holders of a majority of the Registrable Securities to be included in such offering; provided, however, that such investment bankers and managers and underwriting arrangements must be reasonably satisfactory to the Company. No Holder may participate in any underwritten offering contemplated hereby unless (a) such Holder agrees to sell such Holder's Registrable Securities to be included in the underwritten offering in accordance with any approved underwriting arrangements, (b) such Holder completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such approved underwriting arrangements, and (c) if such Holder is not then an Electing Holder, such Holder returns a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(ii) hereof within a reasonable amount of time before such underwritten offering. The Holders participating in any underwritten offering shall be responsible for any underwriting discounts and commissions and fees and, subject to Section 4 hereof, expenses of their own counsel. The Company shall pay all expenses customarily borne by issuers in an underwritten offering, including but not limited to filing fees, the fees and disbursements of its counsel and independent public accountants and any printing expenses incurred in connection with such underwritten offering. Notwithstanding the foregoing or the provisions of Section 3(n) hereof, upon receipt of a request from the Managing 14 Underwriter or a representative of holders of a majority of the Registrable Securities to be included in an underwritten offering to prepare and file an amendment or supplement to the Shelf Registration Statement and Prospectus in connection with an underwritten offering, the Company may delay the filing of any such amendment or supplement for up to 90 days if the Board of Directors of the Company shall have determined in good faith that the Company has a bona fide business reason for such delay. 7. Additional Interest. (a) Notwithstanding any postponement of effectiveness permitted by Section 2(a) hereof, if (i) on or prior to the 90th day following the Closing Date, a Shelf Registration Statement has not been filed with the Commission or (ii) on or prior to the 210th day following the Closing Date, such Shelf Registration Statement is not declared effective by the Commission (each, a "Registration Default"), the Company shall be required to pay additional interest ("Additional Interest") on Registrable Securities that are Securities, from and including the day following such Registration Default until but excluding the date on which such Shelf Registration Statement is either so filed or so filed and subsequently declared effective, as applicable, at a rate per annum equal to an additional one-quarter of one percent (0.25%) of the principal amount of Registrable Securities that are Securities to and including the 90th day following such Registration Default and one-half of one percent (0.50%) thereof from and after the 91st day following such Registration Default. (b) In the event that (i) the Shelf Registration Statement ceases to be effective, (ii) the Company suspends the use of the Prospectus pursuant to Section 2(c) or 3(j) hereof, (iii) the Holders are not authorized to use the Prospectus pursuant to Section 3(g) hereto or (iv) the Holders are otherwise prevented or restricted by the Company from effecting sales pursuant to the Shelf Registration Statement (an "Effective Failure") for more than 30 days, whether or not consecutive, in any 90-day period, or for more than 90 days, whether or not consecutive, during any 12-month period, then the Company shall pay Additional Interest on Registrable Securities that are Securities at a rate per annum equal to an additional one-half of one percent (0.50%) of the principal amount of Registrable Securities that are Securities from the 31st day of the applicable 90-day period or the 91st day of the applicable 12-month period, as the case may be, that any such Effective Failure has existed until the earlier of (1) the time the Holders of Registrable Securities are again able to make sales under the Shelf Registration Statement or (2) the expiration of the Effectiveness Period. (c) Any amounts to be paid as Additional Interest pursuant to paragraphs (a) or (b) of this Section 7 shall be paid in cash semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date (as defined in the Indenture), as applicable, following the date of such Registration Default or Effective Failure, as applicable. For the avoidance of doubt, in no event will Additional Interest accrue on any common stock issued upon conversion of the Securities. (d) Except as provided in Section 8(b) hereof, the Additional Interest as set forth in this Section 7 shall be the exclusive monetary remedy available to the Holders of Registrable Securities for such Registration Default or Effective Failure. In no event shall the Company be required to pay Additional Interest in excess of the applicable maximum amount of one-half of 15 one percent (0.50%) set forth above, regardless of whether one or multiple Registration Defaults or Effective Failures exist. 8. Miscellaneous. (a) Other Registration Rights. The Company may grant registration rights that would permit any person that is a third party the right to piggy-back on any Shelf Registration Statement, provided that if the Managing Underwriter of any underwritten offering conducted pursuant to Section 6 hereof notifies the Company and the Electing Holders that the total amount of securities which the Electing Holders and the holders of such piggy-back rights intend to include in any Shelf Registration Statement is so large as to materially threaten the success of such offering (including the price at which such securities can be sold), then the amount, number or kind of securities to be offered for the account of holders of such piggy-back rights will be reduced to the extent necessary to reduce the total amount of securities to be included in such offering to the amount, number and kind recommended by the Managing Underwriter prior to any reduction in the amount of Registrable Securities to be included in such Shelf Registration Statement. (b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if the Company fails to perform any of its obligations hereunder and that the Purchasers and the Holders from time to time may be irreparably harmed by any such failure, and accordingly agree that the Purchasers and such Holders, in addition to any other remedy to which they may be entitled at law or in equity and without limiting the remedies available to the Electing Holders under Section 7 hereof, shall be entitled to compel specific performance of the obligations of the Company under this Registration Rights Agreement in accordance with the terms and conditions of this Registration Rights Agreement, in any court of the United States or any State thereof having jurisdiction. (c) Amendments and Waivers. This Agreement, including this Section 8(c), may be amended, and waivers or consents to departures from the provisions hereof may be given, only by a written instrument duly executed by the Company and the holders of a majority in aggregate principal amount of Registrable Securities then outstanding. Each Holder of Registrable Securities outstanding at the time of any such amendment, waiver or consent or thereafter shall be bound by any amendment, waiver or consent effected pursuant to this Section 8(c), whether or not any notice, writing or marking indicating such amendment, waiver or consent appears on the Registrable Securities or is delivered to such Holder. (d) Notices. All notices and other communications provided for or permitted hereunder shall be given as provided in the Indenture. (e) Parties in Interest. The parties to this Agreement intend that all Holders of Registrable Securities shall be entitled to receive the benefits of this Agreement and that any Electing Holder shall be bound by the terms and provisions of this Agreement by reason of such election with respect to the Registrable Securities which are included in a Shelf Registration Statement. All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and assigns of the parties hereto and any Holder from time to time of the Registrable Securities to the aforesaid extent. In 16 the event that any transferee of any Holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be entitled to receive the benefits of and, if an Electing Holder, be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement to the aforesaid extent. (f) Counterparts. 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. (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. (i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law. (j) Survival. The respective indemnities, agreements, representations, warranties and other provisions set forth in this Agreement or made pursuant hereto shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Electing Holder, any director, officer or partner of such Holder, any agent or underwriter, any director, officer or partner of such agent or underwriter, or any controlling person of any of the foregoing, and shall survive the transfer and registration of the Registrable Securities of such Holder. 17 Please confirm that the foregoing correctly sets forth the agreement between the Company and you. Very truly yours, Conseco, Inc. By: /s/ Daniel J. Murphy ------------------------------ Name: Daniel J. Murphy Title: Senior Vice President and Treasurer Accepted as of the date hereof: Goldman, Sachs & Co. By: /s/ Goldman, Sachs & Co. ----------------------------- (Goldman, Sachs & Co.) Morgan Stanley & Co. Incorporated By: /s/ Todd J. Singer ----------------------------- Name: Todd J. Singer Title: Executive Director J.P. Morgan Securities Inc. By: /s/ Gavtam Sareen ----------------------------- Name: Gavtam Sareen Title: Vice President On behalf of each of the Purchasers 18 Appendix A Conseco, Inc. INSTRUCTION TO DTC PARTICIPANTS (Date of Mailing) URGENT - IMMEDIATE ATTENTION REQUESTED DEADLINE FOR RESPONSE: [DATE] The Depository Trust Company ("DTC") has identified you as a DTC Participant through which beneficial interests in the Conseco, Inc. (the "Company") 3.50% Convertible Debentures due September 30, 2035 (the "Securities") are held. The Company is in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof. In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire. It is important that beneficial owners of the Securities receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire by [Deadline for response]. Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact [Investor Relations, Conseco, Inc. 11825 N. Pennsylvania Street, Carmel, Indiana 46032, (317) 817-2893]. A-1 RETURN THIS QUESTIONNAIRE BY FAX OR MAIL BY , 2005 CONSECO, INC. NOTICE OF REGISTRATION STATEMENT AND SELLING SECURITYHOLDER QUESTIONNAIRE , 2005 Conseco, Inc. (the "Company") has filed or will file with the United States Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the United States Securities Act of 1933, as amended (the "Securities Act") of the Company's 3.50% Convertible Debentures due September 30, 2035 (the "Securities") and the shares of the Company's common stock, par value $.01 per share (the "Common Stock"), issuable upon conversion thereof, in accordance with the Registration Rights Agreement, dated as of August 15, 2005 (the "Registration Rights Agreement"), among the Company and the purchasers named therein. A copy of the Registration Rights Agreement is attached hereto. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement. In order to have Registrable Securities included in the Shelf Registration Statement (or a supplement or amendment thereto), this Notice of Registration Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire") must be completed, executed and delivered to the Company at the address set forth herein for receipt ON OR BEFORE , 2005. Beneficial owners of Registrable Securities who do not properly complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities. Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. The term "Registrable Securities" is defined in the Registration Rights Agreement to mean all or any portion of the Securities issued from time to time under the Indenture in registered form and the shares of Common Stock issuable upon conversion of such Securities; provided, however, that a security ceases to be a Registrable Security when it is no longer a Restricted Security. The term "Restricted Security" is defined in the Registration Rights Agreement to mean any Security or share of Common Stock issuable upon conversion thereof except any such Security or share of Common Stock that (i) has been effectively registered under the Securities Act and sold in a manner contemplated by the Shelf Registration Statement, (ii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any successor provision thereto), or (iii) has otherwise been transferred and a new Security or share of Common Stock not subject to transfer restrictions under the Securities Act has been delivered by or on behalf of the Company in accordance with the Indenture. A-2 ELECTION The undersigned holder (the "Selling Securityholder") of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement, including, without limitation, Section 5 of the Registration Rights Agreement, as if the undersigned Selling Securityholder were an original party thereto. Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and the Trustee the Notice of Transfer (completed and signed) set forth in Exhibit 1 to this Notice and Questionnaire. The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: (1) (a) Full legal name of Selling Securityholder: ---------------------------------------------------------------------- (b) Full legal name of registered holder (if not the same as (a) above) of Registrable Securities listed in Item (3) below: ---------------------------------------------------------------------- (c) Full legal name of DTC Participant (if applicable and if not the same as (b) above) through which Registrable Securities listed in Item (3) below are held: ---------------------------------------------------------------------- (d) State whether the Selling Securityholder is a publicly-held entity or a subsidiary of a publicly-held entity (i.e., an entity that has a class of securities registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act")): Yes No --------------- ---------------- If a subsidiary, please identify the publicly-held parent entity: ---------------------------------------------------------------------- (e) State whether the Selling Securityholder is an investment company, or a subsidiary of an investment company, registered under the Investment Company Act of 1940, as amended: Yes No --------------- ---------------- If a subsidiary, please identify the publicly-held parent entity: ---------------------------------------------------------------------- A-3 (f) If you answered "No" to questions (d) and (e), state the number of natural persons who have or share voting or investment control over the Registrable Securities: ---------------------------------------------------------------------- If your answer is 5 or fewer, please identify those natural persons: ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- Please note that the SEC requires that these natural persons be named in the prospectus. (2) Address for notices to Selling Securityholder: ---------------------------------------------------------------------- ---------------------------------------------------------------------- Telephone: ------------------------------------------------------------ E-Mail: --------------------------------------------------------------- Fax: ------------------------------------------------------------------ Contact Person: ------------------------------------------------------- (3) Beneficial Ownership of Securities: Except as set forth below in this Item (3), the undersigned Selling Securityholder does not beneficially own any Securities or shares of Common Stock issued upon conversion of any Securities. (a) Principal Amount of Registrable Securities (as defined in the Registration Rights Agreement) beneficially owned: ---------------------------------------------------------------------- ---------------------------------------------------------------------- CUSIP No(s). of Registrable Securities: ------------------------------- Number of shares of Common Stock (if any) issued upon conversion of Securities: ---------------------------------------------------------------------- A-4 (b) Principal Amount of Securities other than Registrable Securities beneficially owned: ---------------------------------------------------------------------- ---------------------------------------------------------------------- CUSIP No(s). of such other Securities: -------------------------------- Number of shares of Common Stock (if any) issued upon conversion of such other Securities: ---------------------------------------------------------------------- (c) Principal Amount of Registrable Securities that the undersigned wishes to be included in the Shelf Registration Statement: ---------------------------------------------------------------------- ---------------------------------------------------------------------- CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement: ---------------------------------------------------------------------- Number of shares of Common Stock (if any) issued upon conversion of Registrable Securities which are to be included in the Shelf Registration Statement: ---------------------------------------------------------------------- (4) Beneficial Ownership of other securities of the Company: Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any shares of Common Stock or any other security of the Company, other than the Securities and shares of Common Stock listed above in Item (3). State any exceptions here: --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- (5) Relationship with the Company: Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. A-5 State any exceptions here: --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- (6) Plan of Distribution: Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume. The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities. The Selling Securityholder may pledge or grant a security interest in some or all of the Registrable Securities owned by it and, if it defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell the Registrable Securities from time to time pursuant to the prospectus. The Selling Securityholder also may transfer and donate shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling security holder for purposes of the prospectus. State any exceptions here: --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- Note: In no event may such methods of distribution take the form of an underwritten offering of the Registrable Securities without the prior consent of the Company. (7) (a) State whether the undersigned Selling Securityholder has entered or will enter into "hedging transactions." Yes No --------------- ---------------- A-6 If yes, you must provide a complete description of the hedging transactions into which the undersigned Selling Securityholder has entered or will enter and the purpose of such hedging transactions, including the extent to which such hedging transactions remain in place. ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- Please note that the SEC may deem short sales of securities covered by a registration statement prior to the effectiveness of such registration statement as a violation of Section 5 of the Securities Act. (b) State whether the undersigned Selling Securityholder has sold any of the Registrable Securities or shares of common stock of the Company short since the date of original issuance of the Registrable Securities. Yes No --------------- ---------------- If yes, you must provide a complete description of the short sale, including the number of shares of common stock of the Company involved and whether the short position remains in place. ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- (8) (a) State whether the undersigned Selling Securityholder is a registered broker-dealer. Yes No --------------- ---------------- (b) State whether the undersigned Selling Securityholder received the Registrable Securities as compensation for underwriting activities and, if so, provide a brief description of the transaction(s) involved. Yes No --------------- ---------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- A-7 The SEC requires that all Selling Securityholders that are broker-dealers, even if they did not receive the Registrable Securities as compensation for underwriting activities, must be named as underwriters in the prospectus for the Registrable Securities. Selling Securityholders, including those named as underwriters, must deliver copies of the prospectus to purchasers at or prior to the time of any sale of the Registrable Securities. (c) State whether the undersigned Selling Securityholder is an affiliate of a registered broker-dealer and if so, list the name(s) of the broker-dealer affiliate(s). Yes No --------------- ---------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- If the answer is "Yes," you must answer question (d) below. (d) If the undersigned Selling Securityholder is an affiliate of a registered broker-dealer: (i) Did the undersigned Selling Securityholder purchase the Registrable Securities in the ordinary course of business? Yes No -------------- ---------------- If the answer is "No," to question (i) state any exceptions below: ------------------------------------------------------- ------------------------------------------------------- (ii) At the time of the purchase of the Registrable Securities, did the undersigned Selling Securityholder have any agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? Yes No -------------- ---------------- If the answer is "Yes," to question (ii) state any exceptions below: ------------------------------------------------------- ------------------------------------------------------- If the answer is "No" to question (i) or "Yes" to question (ii), you will be named as an underwriter in the prospectus relating to the Registrable Securities. (9) Set forth below is Interpretation A.65 of the July 1997 SEC Manual of Publicly Available Telephone Interpretations regarding short selling: A-8 "An issuer filed a Form S-3 registration statement for a secondary offering of common stock which is not yet effective. One of the selling shareholders wanted to do a short sale of common stock `against the box' and cover the short sale with registered shares after the effective date. The issuer was advised that the short sale could not be made before the registration statement becomes effective, because the shares underlying the short sale are deemed to be sold at the time such sale is made. There would, therefore, be a violation of Section 5 if the shares were effectively sold prior to the effective date" By returning this Supplemental Questionnaire, selling securityholders will be deemed to be aware of the foregoing interpretation. ------------------ By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the prospectus delivery and other provisions of the Securities Act and the Exchange Act, and the rules and regulations thereunder, particularly Regulation M. In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement. By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (8) above and the inclusion of such information in the Shelf Registration Statement and related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation of the Shelf Registration Statement and related Prospectus. In accordance with the Selling Securityholder's obligation under Section 3(a) of the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein which may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect and to provide any additional information as the Company reasonably may request. Except as otherwise provided in the Registration Rights Agreement, all notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery as follows: (i) To the Company: Conseco, Inc. 11825 N. Pennsylvania Street Carmel, IN 46032 Attention: Karl Kindig, Esq., SVP Legal (ii) With a copy to: Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Attention: Gary Horowitz, Esq. A-9 Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above). This Agreement shall be governed in all respects by the laws of the State of New York. A-10 IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. Dated: ----------- Selling Securityholder (Print/type full legal name of beneficial owner of Registrable Securities) By: --------------------------------- Name: Title: PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE , 2005 TO THE COMPANY AT: Conseco, Inc. 11825 N. Pennsylvania Street Carmel, IN 46032 Attention: Karl Kindig, Esq., SVP Legal With a copy to: Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Attention: Gary Horowitz, Esq. A-11 EXHIBIT 1 TO APPENDIX A NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT Conseco, Inc. 11825 N. Pennsylvania Street Carmel, IN 46032 Attention: Karl Kindig, Esq., SVP Legal The Bank of New York Trust Company, N.A. 2 N. LaSalle Street, Suite 1020 Chicago, IL 60602 Attention: Corporate Trust Administration Re: Conseco, Inc. (the "Company") 3.50% Convertible Debentures due September 30, 2035 (the "Debentures") Dear Sirs: Please be advised that has transferred $ aggregate principal amount of the above-referenced Debentures or shares of the Company's common stock, issued upon conversion of Debentures, pursuant to an effective Registration Statement on Form S-3 (File No. 333- ) filed by the Company. We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied with respect to the transfer described above and that the above-named beneficial owner of the Debentures or common stock is named as a selling securityholder in the Prospectus dated , 2005, or in amendments or supplements thereto, and that the aggregate principal amount of the Debentures or number of shares of common stock transferred are [a portion of] the Debentures or shares of common stock listed in such Prospectus as amended or supplemented opposite such owner's name. Dated: Very truly yours, -------------------- -------------------------------- (Name) By: ------------------------------ Authorized Signature A-12 EX-10 4 agreement.txt EXHIBIT 10.1 Exhibit 10.1 EXECUTION COPY - -------------------------------------------------------------------------------- Published CUSIP Number: ________ AMENDED AND RESTATED CREDIT AGREEMENT Dated as of August 15, 2005 among CONSECO, INC., BANK OF AMERICA, N.A., as Agent, JPMORGAN CHASE BANK, N.A., as Syndication Agent, and THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO - -------------------------------------------------------------------------------- BANC OF AMERICA SECURITIES LLC and J.P. MORGAN SECURITIES INC. Joint Lead Arrangers and Joint Bookrunners TABLE OF CONTENTS
Page ---- ARTICLE 1 Definitions.............................................................................................1 Section 1.01. Certain Defined Terms......................................................................1 Section 1.02. Other Interpretive Provisions.............................................................26 Section 1.03. Classification of Loans and Borrowings....................................................27 Section 1.04. Accounting Principles.....................................................................27 Section 1.05. Amendment and Restatement of Existing Credit Agreement....................................28 ARTICLE 2 The Credits............................................................................................28 Section 2.01. Term Loan.................................................................................28 Section 2.02. Revolving Credit Loans....................................................................28 Section 2.03. Borrowing, Conversion and Continuation of Loans...........................................29 Section 2.04. Notes; Loan Accounts......................................................................30 Section 2.05. Termination or Reduction of Commitments...................................................31 Section 2.06. Payment at Maturity.......................................................................31 Section 2.07. Repayment of Loans........................................................................32 Section 2.08. Optional and Mandatory Prepayments........................................................32 Section 2.09. Interest..................................................................................35 Section 2.10. Fees......................................................................................36 Section 2.11. Computation of Fees and Interest..........................................................36 Section 2.12. Payments Generally........................................................................36 Section 2.13. Sharing of Payments by Lenders............................................................38 Section 2.14. Incremental Facility......................................................................39 ARTICLE 3 Taxes, Yield Protection and Illegality.................................................................39 Section 3.01. Taxes.....................................................................................39
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Page ---- Section 3.02. Illegality................................................................................41 Section 3.03. Increased Costs and Reduction of Return...................................................41 Section 3.04. Funding Losses............................................................................42 Section 3.05. Inability to Determine Rates..............................................................42 Section 3.06. Certificates of Lenders...................................................................43 Section 3.07. Substitution of Lenders...................................................................43 Section 3.08. Survival..................................................................................43 ARTICLE 4 Conditions Precedent...................................................................................43 Section 4.01. Conditions of Initial Borrowing...........................................................43 Section 4.02. Conditions to All Subsequent Borrowings...................................................46 Section 4.03. Determinations Under Section 4.01.........................................................47 ARTICLE 5 Representations and Warranties.........................................................................47 Section 5.01. Corporate Existence and Power.............................................................47 Section 5.02. Corporate Authorization; No Contravention.................................................47 Section 5.03. Governmental Authorization................................................................48 Section 5.04. Binding Effect............................................................................48 Section 5.05. Litigation................................................................................48 Section 5.06. No Default................................................................................48 Section 5.07. ERISA Compliance..........................................................................48 Section 5.08. Margin Regulations........................................................................49 Section 5.09. Title to Properties.......................................................................49 Section 5.10. Taxes.....................................................................................49 Section 5.11. Financial Condition.......................................................................50 Section 5.12. Environmental Matters.....................................................................50 Section 5.13. Regulated Activities and Regulated Entities...............................................52
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Page ---- Section 5.14. Subsidiaries..............................................................................52 Section 5.15. Insurance Licenses........................................................................52 Section 5.16. Full Disclosure...........................................................................52 Section 5.17. Solvency..................................................................................52 Section 5.18. Security Interests........................................................................53 Section 5.19. Insurance.................................................................................53 ARTICLE 6 Affirmative Covenants..................................................................................53 Section 6.01. Financial Statements......................................................................53 Section 6.02. Certificates; Other Information...........................................................54 Section 6.03. Notices...................................................................................57 Section 6.04. Preservation of Corporate Existence, Etc..................................................58 Section 6.05. Insurance.................................................................................59 Section 6.06. Payment of Obligations....................................................................59 Section 6.07. Compliance with Laws......................................................................59 Section 6.08. Compliance with ERISA.....................................................................59 Section 6.09. Inspection of Property and Books and Records; Expense Reimbursement.......................59 Section 6.10. Information Regarding Collateral..........................................................60 Section 6.11. Casualty and Condemnation.................................................................60 Section 6.12. Additional Subsidiaries; Immaterial Subsidiaries..........................................60 Section 6.13. Further Assurances........................................................................61 Section 6.14. Use of Proceeds...........................................................................61 Section 6.15. Insurance Subsidiary Compliance Certificates..............................................61 ARTICLE 7 Negative Covenants.....................................................................................62 Section 7.01. Limitation on Indebtedness; Certain Capital Stock.........................................62 Section 7.02. Liens.....................................................................................64
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Page ---- Section 7.03. Disposition of Assets.....................................................................65 Section 7.04. Other Agreements..........................................................................67 Section 7.05. Transactions with Affiliates..............................................................68 Section 7.06. Change in Business........................................................................68 Section 7.07. Fundamental Changes.......................................................................68 Section 7.08. Restricted Payments.......................................................................68 Section 7.09. Investments and Acquisitions..............................................................70 Section 7.10. Prepayments of Indebtedness; Modifications of Certain Agreements; Synthetic Purchase Agreements..............................................................................71 Section 7.11. Debt to Total Capitalization Ratio........................................................71 Section 7.12. Interest Coverage Ratio...................................................................72 Section 7.13. [Intentionally Omitted.]..................................................................72 Section 7.14. Aggregate RBC Ratio.......................................................................72 Section 7.15. Combined Statutory Capital and Surplus Level..............................................72 Section 7.16. Investment Portfolio Requirement..........................................................72 Section 7.17. Restrictive Agreements....................................................................73 Section 7.18. Holding Company Activities................................................................74 Section 7.19. Changes in Accounting Policies; Fiscal Year...............................................74 ARTICLE 8 Events of Default......................................................................................74 Section 8.01. Events of Default.........................................................................74 Section 8.02. Remedies..................................................................................77 Section 8.03. Rights Not Exclusive......................................................................77 ARTICLE 9 The Agent..............................................................................................78 Section 9.01. Appointment and Authority.................................................................78 Section 9.02. Rights as a Lender........................................................................78 Section 9.03. Exculpatory Provisions....................................................................78
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Page ---- Section 9.04. Reliance by Agent.........................................................................79 Section 9.05. Delegation of Duties......................................................................79 Section 9.06. Resignation of Agent......................................................................79 Section 9.07. Non-Reliance on Agent and Other Lenders...................................................80 Section 9.08. No Other Duties, Etc......................................................................80 Section 9.09. Agent May File Proofs of Claim............................................................80 Section 9.10. Collateral and Guaranty Matters...........................................................81 Section 9.11. Indemnification of Agent..................................................................81 Section 9.12. Withholding Tax...........................................................................82 ARTICLE 10 Miscellaneous.........................................................................................83 Section 10.01. Amendments and Waivers...................................................................83 Section 10.02. Notices..................................................................................85 Section 10.03. No Waiver; Cumulative Remedies...........................................................86 Section 10.04. Costs and Expenses.......................................................................86 Section 10.05. Company Indemnification; Damage Waiver...................................................86 Section 10.06. Payments Set Aside.......................................................................87 Section 10.07. Assignments, Participations, Etc.........................................................87 Section 10.08. Confidentiality..........................................................................90 Section 10.09. Set-off..................................................................................91 Section 10.10. Notification of Addresses, Lending Offices, Etc..........................................91 Section 10.11. Counterparts.............................................................................91 Section 10.12. Survival of Representations and Warranties...............................................92 Section 10.13. Severability.............................................................................92 Section 10.14. Replacement of Defaulting Lenders and Non-Consenting Lenders.............................92 Section 10.15. Governing Law; Jurisdiction; Consent to Service of Process...............................92
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Page ---- Section 10.16. Waiver of Jury Trial.....................................................................93 Section 10.17. USA PATRIOT Act Notice...................................................................93 Section 10.18. Entire Agreement.........................................................................93
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SCHEDULES Schedule 2.01 Commitments Schedule 5.05 Litigation Schedule 5.07 ERISA Schedule 5.13 Investment Companies Schedule 5.14 Subsidiaries Schedule 7.01 Existing Indebtedness Schedule 7.02 Existing Liens Schedule 7.09 Committed Investments Schedule 7.10 Amendment of Debt Agreements Schedule 7.17 Restrictive Agreements Schedule 10.02 Addresses for Notices Schedule 10.07(b) Assignee Group Assignment and Assumption Fee Schedule EXHIBITS Exhibit A Form of Compliance Certificate Exhibit B-1 Form of Term Note Exhibit B-2 Form of Revolving Credit Note Exhibit C Form of Loan Notice Exhibit D Form of Assignment and Assumption Exhibit E Eurodollar Rate Funding Loss Determination Methodology Exhibit F Form of Security Agreement Exhibit G Subordination Provisions Exhibit H-1 Form of Opinion of Kirkland & Ellis LLP Exhibit H-2 Form of Opinion of Baker & Daniels LLP Exhibit I Form of Affirmation and Consent of Subsidiary Guarantor Exhibit J Form of Term Loan Conversion Notice
vii AMENDED AND RESTATED CREDIT AGREEMENT This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of August 15, 2005, among CONSECO, INC., a Delaware corporation (together with its successors, the "Company"), the several financial institutions from time to time party to this Agreement (collectively, the "Lenders"; individually, a "Lender"), BANK OF AMERICA, N.A., as administrative agent for the Lenders, and JPMORGAN CHASE BANK, N.A., as syndication agent. WHEREAS, the Company desires to obtain from the Lenders (a) a term loan facility maturing on June 22, 2010 in a principal amount of $447,020,512 the proceeds of which (together with the proceeds from the Permitted Convertible Indebtedness (as defined hereafter)) will be used solely to (i) refinance (the "Refinancing") in full all indebtedness outstanding under the Credit Agreement dated as of June 22, 2004 (the "Existing Credit Agreement"), among the Company, the lenders named therein, and Bank of America, N.A., as agent for such lenders, and (ii) pay fees and expenses incurred in connection with the Refinancing, (b) a revolving credit facility maturing on June 22, 2009 in a principal amount of $80,000,000 the proceeds of which will be used for general corporate purposes; WHEREAS, the Company is willing to secure its obligations under this Agreement and certain other obligations by granting Liens on substantially all of its assets to the Agent as provided in the Security Documents; and WHEREAS, the Company is willing to cause each of its current and future Domestic Subsidiaries (other than Insurance Subsidiaries, Subsidiaries of Insurance Subsidiaries and Immaterial Subsidiaries) to (i) guarantee the foregoing obligations of the Company and (ii) to secure such guarantee thereof by granting Liens on substantially all of the assets of such Subsidiaries to the Agent as provided in the Security Documents; NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows: ARTICLE 1 DEFINITIONS Section 1.01. Certain Defined Terms. The following terms have the following meanings: "Account Control Agreement" has the meaning specified in the Security Agreement. "Acquisition" means (i) any Investment by the Company or any of its Subsidiaries in a Person (other than an existing Wholly-Owned Subsidiary) whereby such Person becomes a direct or indirect Subsidiary of the Company or is merged with and into the Company or such Subsidiary or (ii) an acquisition by the Company or any of its Subsidiaries of the property and assets of any Person (other than an existing Wholly-Owned Subsidiary) that constitutes all or substantially all of the assets of such Person or any division, line of business or other business unit of such Person; provided that capital expenditures (as determined in accordance with GAAP) that do not, individually or as part of a series of related transactions, result in the acquisition of all or substantially all of the assets of any Person or any division, line of business or other business unit of such Person shall be deemed not to be Acquisitions. "Affiliate" means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power (a) to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing general partners of the other Person or (b) to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, membership interests, by contract or otherwise. "Affirmation and Consent" has the meaning specified in Section 4.01(a)(ii). "Agent" means Bank of America, N.A., in its capacity as administrative agent under the Loan Documents, and its successors and assigns in such capacity. "Agent-Related Persons" means the initial Agent and any successor agent, together with their respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates. "Agent's Office" means the Agent's address and, as appropriate, account as set forth on Schedule 10.02 or such other address or account as the Agent may from time to time specify. "Aggregate RBC Ratio" means, with respect to the Insurance Subsidiaries taken as a whole, on any date of determination, one-half of the ratio (expressed as a percentage) of (a) the aggregate Total Adjusted Capital (as defined by each relevant Insurance Subsidiary's Department) for the Insurance Subsidiaries to (b) the aggregate Authorized Control Level Risk-Based Capital (as defined by each relevant Insurance Subsidiary's Department) for the Insurance Subsidiaries. "Agreement" means this Credit Agreement. "A.M. Best" means A.M. Best Company. "Annual Statement" means the annual statutory financial statement of any Insurance Subsidiary required to be filed with the insurance commissioner (or similar authority) of its jurisdiction of incorporation, which statement shall be in the form required by such Insurance Subsidiary's jurisdiction of incorporation or, if no specific form is so required, in the form of financial statements permitted by such insurance commissioner (or such similar authority) to be used for filing annual statutory financial statements and shall contain the type of information permitted or required by such insurance commissioner (or such similar authority) to be disclosed therein, together with all exhibits or schedules filed therewith. "Applicable Margin" means, for any day, a percentage per annum equal to (a) with respect to any Eurodollar Rate Loan, 2.00% or (b) with respect to any Base Rate Loan, 1.00%; provided, however, that if and for so long as the Company's senior secured Indebtedness is rated at least Ba3 by Moody's and BB- by S&P, in each case with a stable outlook, such percentages shall be reduced by 0.25%. 2 "Approved Fund" has the meaning specified in Section 10.07(g). "Asset Sale" means any Disposition of property or series of related Dispositions of property, excluding any such Disposition permitted by Section 7.03(a), Section 7.03(b), Section 7.03(c), Section 7.03(d), Section 7.03(e)(i) and Section 7.03(e)(ii) (but only to the extent proceeds therefrom are required to be retained by any Insurance Subsidiary pursuant to regulatory restrictions), Section 7.03(f), Section 7.03(h) and Section 7.03(i). "Assignee Group" has the meaning set forth in Section 10.07(b). "Assignment and Assumption" means an assignment and assumption entered into by a Lender and an Eligible Assignee substantially in the form of Exhibit D. "Attorney Costs" means and includes all reasonable fees, out-of pocket expenses and out-of pocket disbursements of any law firm or other external legal counsel and, without duplication, the reasonable allocated cost of internal legal services and all reasonable out-of pocket expenses and out-of pocket disbursements of internal counsel. "Available Period" refers to the Revolving Credit Facility and means the period from and including the Effective Date to the earliest of (i) the Termination Date, (ii) the date of termination of the Revolving Credit Commitments pursuant to Section 2.05, and (iii) the date of termination of the commitment of each Revolving Credit Lender to make Revolving Credit Loans pursuant to Section 8.02. "Bankers Life Group" means Bankers Life and Casualty Company, Bankers Life Insurance Company of Illinois and Colonial Penn Life Insurance Company. "Base Rate" means, for any day, a fluctuating rate per annum equal to the higher of: (a) 0.50% per annum above the latest Federal Funds Rate and (b) the rate of interest in effect for such day as publicly announced from time to time by BofA as its "prime rate." The "prime rate" is a rate set by BofA based upon various factors, including BofA's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate. Any change in such rate announced by BofA shall take effect at the opening of business on the day specified in the public announcement of such change. "Base Rate Loan" means a Loan that bears interest based on the Base Rate. "BofA" means Bank of America, N.A., a national banking association, and its successors. "Borrowing" means Loans of the same Interest Type made, converted or continued on the same day and, in the case of Eurodollar Rate Loans, as to which the same Interest Period is in effect. "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, the state where the Agent's Office is located or New York City and, if such day relates to any Eurodollar 3 Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market. "Calculation Period" means, with respect to any ratio or calculation, the period for which such ratio or calculation is being calculated. "Capital Adequacy Regulation" means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank. "Capital and Surplus" means, as to any Insurance Subsidiary, as of any date, the total amount shown on line 38, page 3, column 1 of the Annual Statement of such Insurance Subsidiary as of such date, or an amount determined in a consistent manner for any date other than one as of which an Annual Statement is prepared. "Capital Expenditures" means, for any period, (a) the additions to property, plant and equipment capitalized in accordance with GAAP and other capital expenditures of the Company and its Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Company and its Subsidiaries for such period prepared in accordance with GAAP and (b) any Capitalized Lease Liabilities incurred by the Company and its Subsidiaries during such period. "Capital Stock" means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing; provided that, for the avoidance of doubt, Capital Stock shall not be deemed to include Permitted Convertible Indebtedness. "Capitalized Lease Liabilities" means, with respect to any Person, all monetary obligations of such Person under any leasing or similar arrangement that, in accordance with GAAP, would be classified as a capitalized lease, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. "Cash Equivalents" means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of twelve months or less from the date of acquisition issued by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $500,000,000 and a short term deposit rating of at least A-1 by S&P and P-l by Moody's, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally; (c) commercial paper of an issuer rated at least A-1 4 by S&P and P-l by Moody's, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within nine months from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P and A2 by Moody's; (f) securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; or (g) shares of money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition. "Cash Interest Expense" means, for any Calculation Period, the sum of (a) total interest expense, to the extent paid or payable in cash, of the Company and its Subsidiaries determined on a consolidated basis in accordance with GAAP, excluding interest paid or, without duplication, accrued but unpaid by any Insurance Subsidiary to the extent otherwise included in total interest expense in this clause (a) and (b) total dividends paid or payable in cash on any preferred stock issued by the Company to the extent the terms of such preferred stock require payment of cash dividends, in each case for such Calculation Period. "Casualty Event" means any casualty or other insured damage to any property of the Company or any of its Subsidiaries (other than Insurance Subsidiaries or Subsidiaries of Insurance Subsidiaries), or any taking of any such property under power of eminent domain or by condemnation or similar proceeding, or any transfer of any such property in lieu of a condemnation or similar taking thereof. "CBOs" means notes or other instruments (other than CMOs) secured by collateral consisting primarily of debt securities and/or other types of debt obligations, including loans. "CDOC" means CDOC, Inc., a Delaware corporation, and a direct Wholly-Owned Subsidiary of the Company on the Effective Date. "CDOC Preferred Stock" means preferred stock of CDOC that is held by one or more of the Insurance Subsidiaries. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980. "CERCLIS" means the Comprehensive Environmental Response, Compensation and Liability Information System List. "Change of Control" means (a) any acquisition, directly or indirectly, by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Exchange Act) of 40% or more of the outstanding shares of voting stock 5 of the Company, (b) during any period of 12 consecutive calendar months, commencing on the Effective Date, the ceasing of those individuals (the "Continuing Directors") who (i) were directors of the Company on the first day of each such period or (ii) who subsequently became directors of the Company and whose election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors then on the board of directors of the Company, to constitute a majority of the board of directors of the Company, or (c) the occurrence of a "change of control" (howsoever defined) in the indenture or any other instrument evidencing Permitted Convertible Indebtedness or Permitted Refinancing Indebtedness or in any instrument evidencing the CDOC Preferred Stock or the Class B Preferred Stock. "Class B Preferred Stock" means the 5.50% Class B Mandatorily Convertible Preferred Stock of the Company issued on May 12, 2004 and May 21, 2004 pursuant to that certain Underwriting Agreement dated as of May 6, 2004, among the Company, Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated. "CMOs" means notes or other instruments secured by collateral consisting primarily of mortgages, mortgage-backed securities and/or other types of mortgage-related obligations. "Code" means the Internal Revenue Code of 1986, and regulations promulgated thereunder. "Collateral" means any and all "Collateral," as defined in any Security Document. "Collateral and Guarantee Requirement" means the requirement that: (a) the Agent shall have received from each Obligor either (i) a counterpart of the Security Agreement duly executed and delivered on behalf of such Obligor or (ii) in the case of any Person that becomes an Obligor after the Effective Date, a supplement to the Security Agreement, in the form specified therein, duly executed and delivered on behalf of such Obligor; (b) all outstanding Capital Stock in any Subsidiary owned by or on behalf of any Obligor shall have been pledged pursuant to the Security Agreement (except that the Obligors shall be required to pledge only 65% of the outstanding voting Capital Stock in any first-tier Foreign Subsidiary that is not an Obligor and none of the Capital stock of any Foreign Subsidiary that is not first tier) and the Agent shall have received all certificates or other instruments representing such Capital Stock, together with stock powers or other instruments of transfer with respect thereto endorsed in blank; (c) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Agent to be filed, registered or recorded to create the Liens intended to be created by the Security Documents and perfect or record such Liens to the extent, and with the priority, required by the Security Agreement, shall have been filed, registered or recorded or delivered to the Agent for filing, registration or recording; (d) each Obligor shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to 6 which it is a party, the performance of its obligations thereunder and the granting of the Liens granted by it thereunder; and (e) each Obligor shall have taken all other action required under the Security Documents to perfect, register and/or record the Liens granted by it thereunder. "Combined Statutory Capital and Surplus" means, as of the last day of any Fiscal Quarter, the sum of the amounts shown on the Combined Statutory Statement of the Insurance Subsidiaries as of the last day of such Fiscal Quarter on (i) p. 3, line 38 and (ii) p. 3, line 24.1. "Combined Statutory Statement" means a statement combining the Quarterly Statements or Annual Statements, as applicable, of all the Insurance Subsidiaries. "Commitment" means a Term Commitment or a Revolving Credit Commitment, as the context may require. "Commitment Increase" has the meaning specified in Section 2.14. "Company" has the meaning specified in the introduction to this Agreement. "Compensation Period" has the meaning specified in Section 2.12(c)(ii). "Compliance Certificate" means a certificate substantially in the form of Exhibit A. "Conseco Available Cash Flow" means, for any Calculation Period, the sum, without duplication, of (a) dividends paid in cash to the Company by any Subsidiary plus (b) interest paid in cash to the Company by any Subsidiary pursuant to any intercompany Indebtedness owing by such Subsidiary to the Company plus (c) interest or principal paid in cash to the Company with respect to any Surplus Debenture plus (d) amounts paid in cash to the Company under the Tax Sharing Agreement plus (e) management and other similar fees received by the Company under servicing agreements or otherwise from any Subsidiary plus (f) amounts paid in cash to the Company pursuant to a loan made to it by any Subsidiary plus (g) the Company's Investment Income received in cash minus (h) cash operating expenses of the Company minus (i) Capital Expenditures of the Company made in cash minus (j) any amounts paid by the Company in respect of interest on or in repayment of any loan referred to in clause (f) above plus (k) non-recurring cash and non-cash charges (not to exceed $40,000,000 in the aggregate (of which up to $25,000,000 may be cash charges) for all Calculation Periods) related to restructuring, consolidation, severance or discontinuance of any portion of the operations, employees and/or management of the Company minus (l) any amounts paid in cash by the Company to any Insurance Subsidiary in respect of any overpayment by such Insurance Subsidiary of amounts required to be paid by such Insurance Subsidiary to the Company under the Tax Sharing Agreement, in each case for such Calculation Period. Amounts received by the Company or any of its Subsidiaries and required to be applied to prepay the Borrowings pursuant to Section 2.08 (other than pursuant to Section 2.08(b)(iv)) shall, to the extent otherwise included in Conseco Available Cash Flow for any Calculation Period, be excluded from this calculation for such Calculation Period. 7 "Conseco Excess Cash Flow" means, for any Excess Cash Calculation Period, Conseco Available Cash Flow for such Excess Cash Calculation Period minus, without duplication, the sum of (a) cash income taxes paid or to be paid by the Company with respect to such Excess Cash Calculation Period, (b) cash interest expense paid by the Company with respect to such Excess Cash Calculation Period and not reflected in the calculation of Conseco Available Cash Flow for such Excess Cash Calculation Period, (c) scheduled or mandatory permanent repayments of Indebtedness by the Company during such Excess Cash Calculation Period, other than repayments already reflected in the calculation of Conseco Available Cash Flow for such Excess Cash Calculation Period and (d) dividends paid on the Class B Preferred Stock. "Conseco Insurance Group" means all Insurance Subsidiaries of the Company from time to time, other than any Insurance Subsidiary that is part of the Bankers Life Group. "Contingent Obligation" means, without duplication, any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the debt, obligation or other liability of any other Person (other than by endorsements of instruments in the course of collection or indemnities under contracts entered into in the ordinary course of business and not in respect of Indebtedness or the issuance of Capital Stock), or guarantees the payment of dividends or other distributions upon the shares of any other Person; provided that the obligations of any Person under Reinsurance Agreements or in connection with Investments of Insurance Subsidiaries permitted by the applicable Department shall not be deemed Contingent Obligations of such Person. The amount of any Contingent Obligation of any Person shall (subject to any limitation set forth therein) be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. "Contractual Obligation" means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its property is bound. "Debt to Total Capitalization Ratio" means, as of any date of determination, without duplication, the ratio of (a) the principal amount of and accrued but unpaid interest on all Indebtedness of the Company outstanding on such date, other than (i) Indebtedness owing to any Subsidiary Guarantor and (ii) Indebtedness of the kind referred to in clause (e) of the definition of "Indebtedness," to (b) Total Capitalization on such date. "Default" means any event or circumstance that constitutes an Event of Default or that, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default. "Defaulting Lender" means any Lender that (a) has failed to fund any portion of the Loans required to be funded by it hereunder within one Business Day of the date required to be 8 funded by it hereunder, (b) has otherwise failed to pay over to the Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding. "Department" means, with respect to any Insurance Subsidiary, the Governmental Authority of such Insurance Subsidiary's state of domicile with which such Insurance Subsidiary is required to file its Annual Statement. "Disposition" means the sale, assignment, leasing as lessor (other than in the ordinary course), transfer, contribution, conveyance, issuance or other disposal of, or granting of options, warrants or other rights with respect to, any of a Person's assets (including any transaction pursuant to a Reinsurance Agreement or a sale and leaseback transaction and, in the case of any Subsidiary, the issuance or sale of its Capital Stock). The terms "Dispose" and "Disposed of" shall have correlative meaning. "Dollars", "dollars" and "$" each mean lawful money of the United States. "Domestic Subsidiary" means a Subsidiary that is not a Foreign Subsidiary. "Effective Date" means the date on which all conditions precedent set forth in Section 4.01 are satisfied or waived in accordance with Section 10.01 (or, in the case of subsection 4.01(f), waived by the Person entitled to receive any payment required thereunder). "Eligible Assignee" has the meaning specified in Section 10.07. "Environmental Claims" means all written claims, complaints, notices or inquiries, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief or other type of relief, resulting from or based upon the presence, placement, discharge, emission or release (including intentional or unintentional, negligent or non-negligent, sudden or nonsudden or accidental or non-accidental placement, spills, leaks, discharges, emissions or releases) of any Hazardous Material at, in or from property, whether or not owned by the Company or any of its Subsidiaries. "Environmental Laws" means all federal, state or local Requirements of Law, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities (in each case having the force of law), in each case relating to environmental, health and safety, as now or hereafter in effect. "Equity Issuances" means the issuances by the Company of common stock and the Class B Preferred Stock, in each case consummated in May 2004. 9 "ERISA" means the Employee Retirement Income Security Act of 1974 and the regulations promulgated thereunder. "ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition that could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate. "Eurodollar Rate" means for any Interest Period with respect to a Eurodollar Rate Loan: (a) the rate per annum equal to the rate determined by the Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (i) if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or (ii) if the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum determined by the Agent as the rate of interest at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by BofA and with a term equivalent to such Interest Period would be offered by BofA's London Branch to major banks in the London interbank eurodollar market at 10 their request at approximately 4:00 p.m. (London time) two Business Days prior to the first day of such Interest Period. "Eurodollar Rate Loan" means a Loan that bears interest at a rate based on the Eurodollar Rate. "Event of Default" has the meaning specified in Section 8.01. "Excess Cash Calculation Period" means (i) initially, the period beginning on the first day of the first full Fiscal Quarter after the Effective Date and ending on the last day of the Fiscal Year in which the Effective Date occurs and (ii) thereafter, each subsequent Fiscal Year. "Exchange Act" means the Securities Exchange Act of 1934 and the regulations promulgated thereunder. "Excluded Subsidiary" means any Subsidiary that is a Foreign Subsidiary, non-Wholly-Owned Subsidiary or Immaterial Subsidiary. "Existing Credit Agreement" has the meaning set forth in the recitals hereto. "Existing Reinsurance Transactions" means the reinsurance transactions consummated in 2002 by Bankers Life and Casualty Company and Colonial Penn Life Insurance Company. "Facility" means the Term Facility or the Revolving Credit Facility, as the context may require. "Federal Funds Rate" means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to BofA on such day on such transactions as determined by the Agent. "Financial Strength Rating Condition" has the meaning specified in Section 2.08(b). "Fiscal Quarter" means any fiscal quarter of a Fiscal Year. "Fiscal Year" means any period of twelve consecutive calendar months ending on December 31. "Foreign Subsidiary" means a Subsidiary (which may be a corporation, limited liability company, partnership or other legal entity) organized under the laws of a jurisdiction outside the United States and conducting substantially all its operations outside the United States, other than any such entity that is (whether as a matter of law, pursuant to an election by such entity or 11 otherwise) treated as a partnership in which any Obligor is a partner or as a branch of any Obligor for United States income tax purposes. "40/86 Advisors" means 40/86 Advisors, Inc., a Delaware corporation. "FRB" means the Board of Governors of the Federal Reserve System and any Governmental Authority succeeding to any of its principal functions. "Further Taxes" means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges (including net income taxes and franchise taxes), and all liabilities with respect thereto, imposed by any jurisdiction on account of amounts payable or paid pursuant to Section 3.01. "GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), that are applicable to the circumstances as of the date of determination. "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial or regulatory functions of or pertaining to government and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing, including any board of insurance, insurance department or insurance commissioner. "Hazardous Material" means: (a) any "hazardous substance," as defined by CERCLA; (b) any "hazardous waste," as defined by the Resource Conservation and Recovery Act; (c) any petroleum product; or (d) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material or substance as to which liability or standards of conduct may be imposed under any Environmental Law, all as amended or hereafter amended. "Immaterial Subsidiary" means any Non-Insurance Subsidiary that (a) has assets with an aggregate fair market value less than $5,000,000, (b) has aggregate revenues less than $10,000,000 for the period of four consecutive Fiscal Quarters most recently ended, (c) has no Indebtedness (other than Indebtedness existing on the date hereof and listed in Schedule 7.01 or permitted under Section 7.01(a)(x) and other Indebtedness in an aggregate principal amount not exceeding at any time one-half of the fair market value of the assets of such Subsidiary at such time), (d) is not integral to the business or operations of the Company or its Subsidiaries (other than Immaterial Subsidiaries), (e) has no Subsidiaries (other than Immaterial Subsidiaries) and (f) is not an Obligor; provided that (x) notwithstanding not meeting the requirements of clauses (a) through (f) above, Conseco Equity Sales, Inc. shall be deemed to be an Immaterial Subsidiary for a period of 90 days after the Effective Date, but shall thereafter no longer be deemed to be an Immaterial Subsidiary unless it meets such requirements and (y) Conseco Management Services Company shall not be deemed to be an Immaterial Subsidiary so long as it is the manager of Conseco Services, LLC pursuant to the latter's limited liability company agreement. 12 "Income Taxes" means any Taxes based upon net income. "Increase Date" has the meaning specified in Section 2.14. "Indebtedness" means, with respect to any Person, without duplication: (a) all obligations of such Person for borrowed money or in respect of loans or advances; (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) all obligations in respect of letters of credit, whether or not drawn, and bankers' acceptances and letters of guaranty issued for the account or upon the application or request of such Person; (d) all Capitalized Lease Liabilities of such Person; (e) the liabilities (if any) of such Person in respect of Swap Contracts as determined by reference to the Swap Termination Value thereof; (f) all obligations of such Person to pay the deferred purchase price of property or services that are included as liabilities in accordance with GAAP (other than accrued expenses incurred and trade accounts payable in each case in the ordinary course of business) and all obligations secured by a Lien on property owned or being purchased by such Person, but only to the extent of the lesser of the obligations secured or the value of the property to which such Lien is attached (including obligations arising under conditional sales or other title retention agreements); (g) any obligations of a partnership of the kind referred to in clauses (a) through (f) above or clause (h) or (i) below in which such Person is a general partner; (h) solely for purposes of Section 7.11, all obligations in respect of preferred stock (other than Class B Preferred Stock and other preferred stock that qualifies as permanent equity for purposes of GAAP) of such Person; and (i) all Contingent Obligations of such Person in connection with Indebtedness or obligations of others of the kinds referred to in clauses (a) through (h) above; provided that in no event shall "Indebtedness" include the Company's obligations in respect of any Recharacterized Portion. "Indemnified Liabilities" has the meaning specified in Section 10.05. "Indemnified Person" has the meaning specified in Section 10.05. "Independent Auditor" has the meaning specified in Section 6.01(a). "Insolvency Proceeding" means, with respect to any Person, (a) any case, action or proceeding with respect to such Person before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, conservation, rehabilitation, receivership, dissolution, winding-up or relief of debtors or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors, in any case, undertaken under U.S. Federal, state or foreign law, including title 11 of the United States Code. "Insurance Subsidiary" means any Subsidiary that is required to be licensed as an insurer or reinsurer. "Interest Coverage Ratio" means, for any Calculation Period, the ratio of (a) Conseco Available Cash Flow for such Calculation Period to (b) Cash Interest Expense for such Calculation Period. "Interest Payment Date" means (a) with respect to any Base Rate Loan, the last Business Day of each calendar quarter and (b) with respect to any Eurodollar Rate Loan, the last 13 day of each Interest Period applicable to the Borrowing of which such Loan is a part; provided that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the date that falls three months after the beginning of such Interest Period and after each Interest Payment Date thereafter is also an Interest Payment Date (but in each case, subject to the definition of "Interest Period"). "Interest Period" means, with respect to any Eurodollar Rate Borrowing, the period beginning on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Company may elect; provided that: (i) if any Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day; (ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and (iii) no Interest Period for any Loan shall extend beyond (A) the Maturity Date, with respect to Term Loans and (B) the Termination Date, with respect to Revolving Credit Loans. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent continuation of such Borrowing. "Interest Type", when used with respect to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Eurodollar Rate or the Base Rate. "Investment" means any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase (including purchases financed with equity) of any Capital Stock, bonds, notes, debentures or other debt securities of, or any other investment in, any Person. "Investment Grade Asset" means any Investment with a fixed maturity that has a rating of (x) at least BBB- by S&P and, if such Investment is rated by Moody's, at least Ba2 from Moody's or (y) at least Baa3 by Moody's and, if such Investment is rated by S&P, at least BB from S&P, or, if such Investment is not rated by either S&P or Moody's, an NAIC rating of at least Class 2. "Investment Income" means the amount of earnings of the Company on Investments, net of expenses actually incurred in connection with such Investments and taking into account realized gains and losses on such Investments. 14 "IRS" means the Internal Revenue Service or any Governmental Authority succeeding to any of its principal functions under the Code. "Lenders" has the meaning specified in the introduction to this Agreement and includes any other Person that shall have become a party hereto pursuant to an Assignment and Assumption in accordance with Section 10.07, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. "Lending Office" means, as to any Lender, the office or offices of such Lender specified as its "Lending Office" or "Domestic Lending Office" or "Eurodollar Lending Office," as the case may be, on Schedule 10.02 or in its administrative questionnaire delivered to the Agent, or such other office or offices as such Lender may from time to time notify the Company and the Agent. "License" means any license, certificate of authority, permit or other authorization that is required to be obtained from any Governmental Authority in connection with the operation, ownership or transaction of insurance business. "Lien" means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance, lien (statutory or other) or preferential arrangement of any kind or nature whatsoever in respect of any property (including those created by, arising under or evidenced by, any conditional sale or other title retention agreement, the interest of a lessor under a capital lease or any financing lease having substantially the same economic effect as any of the foregoing) and any contingent or other agreement to provide any of the foregoing, but not including the interest of a lessor under an operating lease or a licensor under a license that does not otherwise secure an obligation. "Loan" means a Term Loan or a Revolving Credit Loan, as the context may require. "Loan Documents" means this Agreement, all Notes, the Security Documents and any fee letter agreement entered into pursuant to Section 2.10, and in the case of the Security Documents, all Secured Swap Contracts. "Loan Notice" means a notice of (a) Borrowing, (b) a conversion of a Loan from one Interest Type to the other or (c) a continuation of Eurodollar Rate Loans, substantially in the form of Exhibit C. "Margin Stock" means "margin stock" as such term is defined in Regulation T, U or X of the FRB. "Material Acquisition" means any acquisition of assets by the Company or its Subsidiaries in a transaction or series of related transactions for consideration exceeding $80,000,000, other than any such acquisition by any Insurance Subsidiary in the ordinary course of business in compliance with Section 7.16 and the investment policy approved by the board of directors of such Insurance Subsidiary. "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the business, properties or condition (financial or otherwise) of the Company or the 15 Company and its Subsidiaries taken as a whole; (b) a material impairment of the ability of any Obligor to perform under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Obligor of any Loan Document to which it is a party. "Material Disposition" means any disposition of assets by the Company or its Subsidiaries in a transaction or series of related transactions for consideration exceeding $80,000,000, other than any such disposition by any Insurance Subsidiary in the ordinary course of business consistent with past practices and the investment policy approved by the board of directors of such Insurance Subsidiary. "Maturity Date" means the earlier of (i) June 22, 2010, or if such day is not a Business Day, the next succeeding Business Day and (ii) the date that is 91 days prior to the first scheduled put or call right under the Permitted Convertible Indebtedness. "Moody's" means Moody's Investors Service, Inc., together with any Person succeeding thereto by merger, consolidation or acquisition of all or substantially all of its assets, including substantially all of its business of rating securities. "Multiemployer Plan" means a "multiemployer plan," within the meaning of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes, is making or is obligated to make contributions or, during the preceding three calendar years, has made, or been obligated to make, contributions. "NAIC" means the National Association of Insurance Commissioners or any successor thereto, or in the absence of the National Association of Insurance Commissioners or such successor, any other association, agency or other organization performing advisory, coordination or other like functions among insurance departments, insurance commissioners and similar Governmental Authorities of the various states of the United States toward the promotion of uniformity in the practices of such Governmental Authorities. "NASD" means the National Association of Securities Dealers, Inc. or any Person succeeding to any of its principal functions. "Net Income" means, for any Person for any Calculation Period, the net income (or loss) of such Person for such period as determined in accordance with GAAP. "Net Proceeds" means (a) with respect to any Asset Sale or Casualty Event, the aggregate amount of cash and cash equivalents received in respect of such Asset Sale or Casualty Event, as the case may be (including any such amounts received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received and, in the case of a Casualty Event, insurance proceeds, condemnation awards and similar payments), minus the sum of (i) all costs and expenses (including legal fees, notarial fees, accountants' fees, investment banking fees, survey costs and title insurance premiums) paid by the Company or any of its Subsidiaries to third parties, amounts applied to the repayment of Indebtedness (other than the Loans) secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Casualty Event, costs of discontinuance (including any reasonable severance payments), Taxes other than 16 Income Taxes (after taking into account any available tax credits, exemptions or deductions and any tax sharing arrangements) and other customary fees and expenses incurred in connection with such Asset Sale or Casualty Event and required to be paid in cash or deducted from the proceeds of such Asset Sale or Casualty Event, (ii) the estimated Income Tax or other Taxes to the extent payable by the Person selling or Disposing of such asset actually required to be paid in cash in connection with such Asset Sale (after taking into account any available tax credits, exemptions or deductions and any tax sharing arrangements), (iii) purchase price adjustments reasonably expected to be payable in connection therewith (not to exceed 10% of the purchase price for the relevant Asset Sale) so long as, if any such amount ceases to be payable, it shall then become "Net Proceeds" and (iv) for an Insurance Subsidiary, any amounts that the Department will not permit such Insurance Subsidiary to distribute (including as a dividend or otherwise) directly or indirectly to the Company as a result of such Asset Sale or Casualty Event and (b) with respect to any issuance of Capital Stock of, or capital contribution to, the Company or any Subsidiary, or any incurrence of Indebtedness by the Company or any of its Subsidiaries, the proceeds thereof in the form of cash and cash equivalents, minus the costs and expenses paid or payable within 90 days of incurrence (so long as, if any such amount is not paid within such period, it shall become "Net Proceeds" on the last day of such period) by the Company or any of its Subsidiaries to third parties in connection therewith (including legal fees, notarial fees, accountants' fees, investment banking fees, underwriting discounts and commissions and other customary fees and expenses incurred in connection therewith) and required to be paid in cash or deducted from the proceeds of such issuance, contribution or incurrence. For purposes of this definition, the Net Proceeds received by any Person in respect of any Disposition shall include such cash or cash equivalents as may be received ("subsequent cash proceeds") by such Person at any time or from time to time in connection with the sale, transfer, lease or other disposition, or otherwise in respect of, any consideration other than cash or cash equivalents received by such Person in respect of such Disposition, less the estimated Income Tax or other Taxes to the extent payable by the Person selling or Disposing of such asset to be paid in connection with the receipt of such subsequent cash proceeds (after taking into account any available tax credits, exemptions or deductions and any tax sharing arrangements) that was not theretofore deducted in computing Net Proceeds. "Non-Consenting Lender" means a Lender under a Facility that does not consent to an amendment or waiver pursuant to Section 10.01 that requires the consent of all of the Lenders under such Facility in order to become effective and as to which Lenders holding at least two-thirds of the interests under such Facility entitled to consent to such amendment or waiver have consented. "Non-Insurance Subsidiary" means any Subsidiary that is not an Insurance Subsidiary. "Notes" has the meaning specified in Section 2.04(b). "Obligations" means all advances, debts, liabilities, obligations, covenants and duties for the payment of money arising under any Loan Document owing by the Company to the Agent, the Lenders or any Indemnified Person, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. "Obligors" means the Company and the Subsidiary Guarantors. 17 "Organization Documents" means (i) with respect to any corporation, the certificate or articles of incorporation, the bylaws, any certificate of designation or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement, and all applicable resolutions of the board of directors (or any committee thereof) of such corporation, (ii) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement, and all applicable resolutions or consents of the governing body (or any committee thereof) of such limited liability company and (iii) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity, and all applicable resolutions or consents of the governing body (or any committee thereof), or in the case of clauses (i), (ii) and (iii), the equivalent or comparable constituent documents with respect to any Foreign Subsidiary. "Other Taxes" means any present or future recording, stamp, court or documentary taxes or any other excise, sales or property taxes, charges or similar levies that arise from any payment made under this Agreement or any other Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, this Agreement or any other Loan Document. "Outstanding Amount" means, with respect to Term Loans and Revolving Credit Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans and Revolving Credit Loans, as the case may be, occurring on such date. "Participant" has the meaning specified in subsection 10.07(d). "Patriot Act" has the meaning specified in Section 10.16. "PBGC" means the Pension Benefit Guaranty Corporation or any Governmental Authority succeeding to any of its principal functions under ERISA. "Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA that the Company or any ERISA Affiliate sponsors or maintains, or to which it makes, is making or is obligated to make contributions, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years. "Perfection Certificate" means a certificate in the form of Exhibit E to the Security Agreement or any other form approved by the Agent. "Permitted Convertible Indebtedness" has the meaning specified in Section 7.01(a)(xviii). "Permitted Preferred Stock" means (a) preferred stock of the Company that (i) does not require (or permit at the option of the holder) any dividend, interest, sinking fund or redemption 18 payment (other than payments made in common stock or Permitted Preferred Stock) to be made and (ii) is not convertible or exchangeable (unless at the sole option of the Company) for debt securities or any Capital Stock other than Capital Stock of the type described in clause (i) and (b) the Class B Preferred Stock. "Permitted Refinancing Indebtedness" means Indebtedness of the Company that (i) does not require mandatory principal payments prior to the first anniversary of the Maturity Date, (ii) contains covenants and events of default no more restrictive to the Company than those in the Loan Documents and (iii) is subordinated to the Loans on substantially the terms set forth in Exhibit G hereto or otherwise on terms reasonably satisfactory to the Required Lenders; provided that (x) no Event of Default shall have occurred and be continuing at the time or immediately after such Indebtedness is incurred and (y) immediately after giving effect to the incurrence of such Indebtedness and the application of the proceeds thereof, the Company and its Subsidiaries are in compliance with all of the covenants contained in the Loan Documents (including all financial and ratings covenants) calculated on a Pro Forma Basis. "Permitted Refinancing Preferred Stock" means preferred stock of the Company that (i) does not require (or permit at the option of the holder) (x) the declaration or payment of cash dividend payments in an aggregate amount exceeding the maximum amount that the Company could have paid during the applicable Calculation Period without contravening Section 7.12 as of the end of the most recently ended Fiscal Quarter calculated on a Pro Forma Basis or (y) any sinking fund or redemption payment (other than payments made in common stock or Permitted Refinancing Preferred Stock) to be made prior to the first anniversary of the Maturity Date and (ii) is not convertible or exchangeable (unless at the sole option of the Company) for debt securities or any Capital Stock other than common stock of the Company, Permitted Preferred Stock or Permitted Refinancing Preferred Stock prior to the first anniversary of the Maturity Date. "Permitted Swap Obligations" means all obligations (contingent or otherwise) of the Company or any Subsidiary existing or arising under Swap Contracts, provided that each of the following criteria is satisfied: (a) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments or assets held by such Person, or changes in the value of securities issued by such Person in conjunction with a securities repurchase program not otherwise prohibited hereunder, and not for purposes of speculation or taking a "market view" and (b) such Swap Contracts do not contain any provision ("walk-away" provision) exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party. "Permitted Transactions" means (a) mortgage-backed security transactions in which an investor sells mortgage collateral, such as securities issued by the Government National Mortgage Association and the Federal Home Loan Mortgage Corporation for delivery in the current month while simultaneously contracting to repurchase "substantially the same" (as determined by the Public Securities Association and GAAP) collateral for a later settlement, (b) transactions in which an investor lends cash to a primary dealer and the primary dealer collateralizes the borrowing of the cash with certain securities, (c) transactions in which an investor lends securities to a primary dealer and the primary dealer collateralizes the borrowing 19 of the securities with cash collateral, (d) transactions in which an investor makes loans of securities to a broker-dealer under an agreement requiring such loans to be continuously secured by cash collateral or United States government securities and (e) transactions in which a federal home loan mortgage bank (a "FHLMB") makes loans to an Insurance Subsidiary, that are sufficiently secured by appropriate assets of such Insurance Subsidiary consisting of government agency mortgage-backed securities in accordance with the rules, regulations and guidelines of such FHLMB for its loan programs. "Person" means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority or other entity of whatever nature. "Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA) that the Company sponsors or maintains or to which the Company makes, is making or is obligated to make contributions and includes any Pension Plan. "Prior Effective Date" means the "Effective Date" under the Existing Credit Agreement. "Pro Forma Basis" means, with respect to compliance with any test or covenant hereunder and in connection with any event or transaction requiring a calculation on a Pro Forma Basis for any period, compliance with such test or covenant after giving effect to such event or transaction, and (i) in the case of any Material Acquisition or Material Disposition, including pro forma adjustments only to the extent consistent with Article 11 of Regulation S-X under the Securities Act and using for purposes of determining such compliance (x) in the case of any Material Acquisition, the historical financial statements of all entities or assets so acquired or to be acquired and (y) the consolidated financial statements of the Company and its Subsidiaries, which shall be reformulated as if such Material Acquisition or Material Disposition, and any other Material Acquisitions or Material Dispositions that have been consummated during such period, had been consummated on the first day of such period, (ii) in the case of any incurrence of Indebtedness, assuming such Indebtedness was incurred on the first day of such period and assuming that such Indebtedness bears interest during the portion of such period prior to the date of incurrence at, in the case of Indebtedness bearing interest at a floating rate, the weighted average of the interest rates applicable to outstanding Loans during such period and, in the case of Indebtedness bearing interest at a fixed rate, such fixed rate, (iii) in the case of any prepayment of Indebtedness, assuming that such prepayment had occurred on the first day of such period, (iv) in the case of the declaration or payment of any dividend, assuming such dividend had been declared and paid on the first day of such period and (v) making such other pro forma adjustments as would be permitted or required by Regulation S-K under the Securities Act. "Pro Rata Share" means, as to any Lender under a Facility (a) at any time at which the Commitments under such Facility remain outstanding, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such Lender's Commitment under such Facility divided by the combined Commitments of all Lenders under such Facility, and (b) after the termination of the Commitments under such Facility, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of the principal amount 20 of such Lender's outstanding Loans under such Facility divided by the aggregate principal amount of the outstanding Loans of all the Lenders under such Facility. "Purchase Money Debt" means Indebtedness incurred by a Person in connection with the purchase of fixed or capital assets by such Person, in which assets the seller or financier thereof has taken or retained a Lien; provided that (x) any such Lien attaches to such assets concurrently with or within 120 days after the purchase thereof by such Person and (y) at the time of incurrence of such Indebtedness, the aggregate principal amount of such Indebtedness shall not exceed the costs of the assets so purchased plus fees and expenses reasonably related thereto. "Quarterly Statement" means the quarterly statutory financial statement of any Insurance Subsidiary required to be filed with the insurance commissioner (or similar authority) of its jurisdiction of incorporation or, if no specific form is so required, in the form of financial statements permitted by such insurance commissioner (or such similar authority) to be used for filing quarterly statutory financial statements and shall contain the type of financial information permitted by such insurance commissioner (or such similar authority) to be disclosed therein, together with all exhibits or schedules filed therewith. "Recharacterized Portion" means the portion, if any, of any Permitted Refinancing Preferred Stock that qualified as permanent equity for purposes of GAAP at the time of initial issuance but no longer qualifies as permanent equity for purposes of GAAP on the Company's consolidated balance sheet as a result of a change in GAAP after the date of such issuance. "Reduction Amount" has the meaning set forth in Section 2.08(d). "Refinancing" has the meaning set forth in the recitals hereto. "Register" has the meaning specified in Section 10.7(c). "Reinsurance Agreements" means any agreement, contract, treaty, certificate or other arrangement by which any Insurance Subsidiary agrees to transfer or cede to another insurer all or part of the liability assumed or assets held by it under one or more insurance, annuity, reinsurance or retrocession policies, agreements, contracts, treaties, certificates or similar arrangements. Reinsurance Agreements shall include, but not be limited to, any agreement, contract, treaty, certificate or other arrangement that is treated as such by the applicable Department. "Related Parties" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person's Affiliates. "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC. "Required Lenders" means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings and (b) aggregate unused Revolving Credit 21 Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders. "Required Revolving Credit Lenders" means, as of any date of determination, Revolving Credit Lenders holding more than 50% of the sum of the (a) Total Revolving Credit Outstandings and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Credit Lenders. "Required Term Lenders" means, as of any date of determination, Term Lenders holding more than 50% of the aggregate principal amount of the Term Loans outstanding on such date; provided that the Term Loans held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Term Lenders. "Requirement of Law" means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or legally binding upon the Person or any of its property or to which the Person or any of its property is subject. "Responsible Officer" means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of an Obligor. Any document delivered under any Loan Document that is signed by a Responsible Officer of an Obligor shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Obligor and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Obligor. Unless otherwise specified, "Responsible Officer" means a Responsible Officer of the Company. "Restricted Payments" has the meaning set forth in Section 7.08. "Revolving Credit Commitment" means, as to each Revolving Credit Lender, its obligation to make Revolving Credit Loans to the Company pursuant to Section 2.02 in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 2.01 under the caption "Revolving Credit Commitment" or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. "Revolving Credit Facility" means, at any time, the aggregate amount of the Revolving Credit Lenders' Revolving Credit Commitments at such time. "Revolving Credit Lender" means, at any time, any Lender that has a Revolving Credit Commitment at such time. "Revolving Credit Loan" has the meaning specified in Section 2.02(a). "Revolving Credit Note" has the meaning specified in Section 2.04(b). 22 "S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., together with any Person succeeding thereto by merger, consolidation or acquisition of all or substantially all of its assets, including substantially all of its business of rating securities. "SAP" means, with respect to any Insurance Subsidiary, the statutory accounting practices prescribed or permitted by the insurance commissioner (or other similar authority) in the jurisdiction of such Insurance Subsidiary for the preparation of annual statements and other financial reports by insurance companies of the same type as such Insurance Subsidiary that are applicable to the circumstances as of the date of filing of such statement or report. "SEC" means the Securities and Exchange Commission or any Governmental Authority succeeding to any of its principal functions. "Secured Guarantee" has the meaning specified in the Security Agreement. "Secured Obligations" has the meaning specified in the Security Agreement. "Secured Swap Contract" means any Swap Contract entered into by an Obligor with a Lender or a lender under the Existing Credit Agreement (or an Affiliate of a Lender or of a lender under the Existing Credit Agreement), at the time such Swap Contract was entered into, to hedge interest rate risk of such Obligor and Subsidiaries that are not Insurance Subsidiaries. "Security Agreement" means the Guarantee and Security Agreement, dated as of June 22, 2004, among the Obligors and the Agent. "Security Documents" means the Security Agreement, each Affirmation and Consent and each other security agreement, instrument or document executed and delivered pursuant thereto or pursuant to Section 6.10 or Section 6.11 to secure any of the Secured Obligations. "Single Employer Pension Plan" means a pension plan as such term is defined in section 3(2) of ERISA, other than a multiemployer plan as defined in section 4001(a)(3) of ERISA, to which the Company or any other ERISA Affiliate may have liability, including any liability by reason of having been a substantial employer within the meaning of section 4063 of ERISA at any time during the preceding five years or by reason of being deemed to be a contributing sponsor under section 4069 of ERISA. "Statutory Net Income" means, for any period, the net income of an Insurance Subsidiary determined in accordance with SAP. "Subsidiary" of a Person means any corporation, partnership, limited liability company, limited liability partnership, joint venture, trust, association or other unincorporated organization of which or in which such Person and such Person's Subsidiaries own directly or indirectly more than 50% of (a) the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors, if it is a corporation, (b) the voting or managing interests (which shall mean the general partner in the case of a partnership), if it is a partnership, joint venture or similar entity, (c) the beneficial interest, if it is a trust, association or other unincorporated organization or (d) the membership interest, if it is a limited liability company; provided that none of Paladin Entertainment Holdings, LLC 23 ("Paladin"), Resortport Investment Partnership or any Subsidiary of the foregoing shall be considered a Subsidiary for any purpose of this Agreement. Unless otherwise specified, "Subsidiary" means a Subsidiary of the Company. "Subsidiary Guarantors" means each Subsidiary listed on the signature pages of the Security Agreement under the caption "Subsidiary Guarantors" and each Subsidiary that shall, at any time after the date thereof, become a Subsidiary Guarantor pursuant to Section 23 of the Security Agreement. "Sufficient Liquidity" has the meaning specified in Section 7.01(a)(xviii)(B). "Surplus Debentures" means, as to any Insurance Subsidiary, debt securities of such Insurance Subsidiary issued to the Company or any other Subsidiary the proceeds of which are permitted to be included, in whole or in part, as Capital and Surplus of such Insurance Subsidiary as approved and permitted by the applicable Department. "Swap Contract" means any agreement, relating to any transaction that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, swaption, currency option or any other similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing, and any master agreement relating to or governing any or all of the foregoing. "Swap Termination Value" means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined by the Company based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include any Lender). "Synthetic Purchase Agreement" means any agreement pursuant to which the Company or any of its Subsidiaries is or may become obligated to make (a) any payment in connection with the purchase by any third party from a Person other than the Company or any of its Subsidiaries (other than any Subsidiary that is a Subsidiary of an Insurance Subsidiary but is not itself an Insurance Subsidiary) of any Capital Stock or Indebtedness of the Company or any of its Subsidiaries (other than any Subsidiary that is a Subsidiary of an Insurance Subsidiary but is not itself an Insurance Subsidiary) or (b) any payment the amount of which is determined by reference to the price or value at any time of any such Capital Stock or Indebtedness; provided that (i) no phantom stock or similar plan providing for payments only to current or former directors, officers or employees of the Company or any of its Subsidiaries (or to their heirs or estates) and (ii) no such agreement in respect of any Disposition of any Capital Stock of a Subsidiary of the Company that is permitted by Section 7.03 shall in either case be deemed to be a Synthetic Purchase Agreement. 24 "Tax Sharing Agreement" means the amended and restated consolidated income tax agreement dated January 1, 2004 among the Company and certain of its Subsidiaries. "Taxes" means any and all present or future taxes, levies, assessments, imposts, duties, deductions, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of each Lender and the Agent, respectively, taxes imposed as a result of a connection between such Lender or the Agent and the jurisdiction imposing such tax (other than any connection arising solely from such Lender or the Agent having executed, delivered or performed its obligations or received a payment under this Agreement or any other Loan Document) including the jurisdiction (or any political subdivision thereof) under the laws of which such Lender or the Agent, as the case may be, is organized or maintains its Lending Office. "Term Commitment" means, as to each Term Lender, its obligation to make Term Loans to the Company pursuant to Section 2.01 in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Term Lender's name on Schedule 2.01 under the caption "Term Commitment" or opposite such caption in the Assignment and Assumption pursuant to which such Term A Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. "Term Facility" means, at any time, (a) on or prior to the Effective Date, the aggregate amount of the Term Commitments at such time and (b) thereafter, the aggregate principal amount of the Term Loans of all Term Lenders outstanding at such time. "Term Lender" means (a) at any time on or prior to the Effective Date, any Lender that has a Term Commitment at such time and (b) at any time after the Effective Date, any Lender that holds Term Loans at such time. "Term Loan" has the meaning set forth in Section 2.01. "Term Loan Conversion Notice" has the meaning specified in Section 10.11. "Term Note" has the meaning specified in Section 2.04(b). "Termination Date" refers to Revolving Credit Loans and means June 22, 2009, or if such day is not a Business Day, the next succeeding Business Day. "Total Capitalization" means, without duplication, (a) the amount described in clause (a) of the definition of "Debt to Total Capitalization Ratio" plus (b) the Total Shareholders' Equity of the Company. "Total Outstandings" means the aggregate Outstanding Amount of all Loans. "Total Revolving Credit Outstandings" means the aggregate Outstanding Amount of all Revolving Credit Loans. "Total Shareholders' Equity" means the total common and preferred shareholders' equity of the Company as determined in accordance with GAAP (calculated including any Recharacterized Portion, but excluding (i) unrealized gains (losses) on securities as determined in accordance with FAS 115 and (ii) any charges taken to write off any goodwill included on the 25 Company's balance sheet on the Effective Date to the extent such charges are required by FAS 142). "Transaction Liens" means the Liens granted by the Obligors under the Security Documents. "Transactions" means the execution, delivery and performance by each Obligor of the Loan Documents to which it is to be a party and the borrowing of the Loans hereunder. "Unfunded Pension Liability" means the excess of a Plan's benefit liabilities under Section 400l(a)(16) of ERISA over the current value of that Plan's assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year. "United States" and "U.S." each means the United States of America. "Wholly-Owned Subsidiary" means any corporation in which (other than directors' and national citizen qualifying shares or similar de minimis holdings by another Person, in each case, as required by law) 100% of the capital stock of each class having ordinary voting power, and 100% of the capital stock of every other class, in each case (or, in the case of Persons other than corporations, membership interests or other equity interests), at the time as of which any determination is being made, is owned, beneficially and of record, by the Company, or by one or more of the other Wholly-Owned Subsidiaries, or both. Section 1.02. Other Interpretive Provisions. (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) The words "hereof", "herein", "hereunder" and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified. (c) (i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced. (ii) The term "including" is not limiting and means "including without limitation." (iii) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," the words "to" and "until" each mean "to but excluding" and the word "through" means "to and including." (d) Unless otherwise expressly provided herein or the context requires otherwise, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation, (iii) any reference herein to a Person shall be construed to include such Person's permitted successors and assigns and (iv) the word "property" shall be 26 construed to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. (e) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement. (f) This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. Unless otherwise expressly provided, any reference to any action of the Agent or the Lenders by way of consent, approval or waiver shall be deemed modified by the phrase "in its/their sole and reasonable discretion." (g) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Agent, the Company and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders or the Agent merely because of the Agent's or Lenders' involvement in their preparation. Section 1.03. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Interest Type (e.g., a "Eurodollar Rate Loan"). Borrowings also may be classified and referred to by Interest Type (e.g., a "Eurodollar Rate Borrowing"). Section 1.04. Accounting Principles. (a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP as in effect from time to time, consistently applied. (b) References herein to particular columns, lines or sections of any Person's Annual Statement shall be deemed, where appropriate, to be references to the corresponding column, line or section of such Person's Quarterly Statement, or if no such corresponding column, line or section exists or if any report form changes, then to the corresponding item referenced thereby. In the event the columns, lines or sections of the Annual Statement or Quarterly Statement referenced herein are changed or renumbered from the columns, lines and sections applicable to the 2004 Annual Statement, or the March 31, 2005 Quarterly Statement, all such references shall be deemed references to such column, line or section as so renumbered or changed. (c) In the event of any future Material Acquisition or Material Disposition, determinations of compliance with the financial covenants contained herein for any applicable calculation period shall be made on a Pro Forma Basis. (d) If, at any time after the date of this Agreement, any material change is made to GAAP or the Company's accounting practices that would affect in any material respect the determination of compliance with the covenants set forth in this Agreement, the Company shall notify the Agent of the change and the Company and the Agent shall negotiate in good faith to amend such covenant, subject to the approval of the Required Lenders, to restore the Company and the Lenders to the position they occupied before the implementation of such material change in GAAP or accounting practices; provided that if the Company and the Agent are unable to 27 reach agreement within 30 days following the implementation of such material change, the Agent shall be permitted, acting in good faith, to make such amendments, in each case subject to the approval of the Required Lenders, to the covenants set forth in this Agreement as it reasonably determines are necessary to restore the Company and the Lenders to the position they occupied prior to the implementation thereof. Section 1.05. Amendment and Restatement of Existing Credit Agreement. This Agreement amends and restates the Existing Credit Agreement and on and after the date hereof, each reference in any Loan Document to "this Agreement", "herein", "hereof", "hereunder" or words of similar import when referring to the Existing Credit Agreement shall mean and be a reference to the Existing Credit Agreement as amended and restated hereby. ARTICLE 2 THE CREDITS Section 2.01. Term Loan (a) Subject to the terms and conditions set forth herein, each Term Lender severally agrees to make a single loan (a "Term Loan") to the Company on the Effective Date in an amount not to exceed such Term Lender's Term Commitment at such time. The Borrowing shall consist of Term Loans made simultaneously by the Term Lenders ratably according to their Term Commitments. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed. (b) Each Term Loan shall be made as part of a Borrowing consisting of Term Loans of the same Interest Type made by the Term Lenders ratably in accordance with their respective Term Commitments. (c) Subject to Section 2.03, Term Loans may be Base Rate Loans or Eurodollar Rate Loans, provided that any Eurodollar Rate Loans made on the Effective Date shall have an Interest Period of not greater than one month. (d) Term Loans shall be convertible from one Interest Type to the other; provided that (x) the Company may not select the Eurodollar Rate for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 and (y) there shall not be more than 10 different Interest Periods in effect in respect of all Term Loans then outstanding. Section 2.02. Revolving Credit Loans (a) Subject to the terms and conditions set forth herein, each Revolving Credit Lender severally agrees to make loans (each such loan, a "Revolving Credit Loan") to the Company from time to time, on any Business Day during the Available Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Revolving Credit Commitment; provided, however, that after giving effect to any Borrowing of Revolving Credit Loans, (i) the Total Revolving Credit Outstandings at such time shall not exceed the Revolving Credit Facility at such time, and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender shall not exceed such Revolving Credit Lender's Revolving Credit Commitment. Within the limits of each Revolving Credit Lender's Revolving Credit Commitment, and subject to the 28 other terms and conditions hereof, the Company may borrow under this Section 2.02(a), prepay under Section 2.08, and reborrow under this Section 2.02(a). (b) Each Revolving Credit Loan shall be made as part of a Borrowing consisting of Revolving Credit Loans of the same Interest Type made by the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments. (c) Subject to Section 2.03, Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, provided that any Eurodollar Rate Loans made on the Effective Date shall have an Interest Period of not greater than one month. (d) Revolving Credit Loans shall be convertible from one Interest Type to the other; provided that (x) the Company may not select the Eurodollar Rate for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 and (y) there shall not be more than 10 different Interest Periods in effect in respect of all Revolving Credit Loans then outstanding. Section 2.03. Borrowing, Conversion and Continuation of Loans. (a) Each Borrowing and each conversion of Loans from one Interest Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Company's irrevocable written notice to the Agent in the form of a Loan Notice, appropriately completed and signed by a Responsible Officer of the Company. Each such notice must be received by the Agent not later than 12:00 Noon (New York City time) (i) on the requested date of a Borrowing of Base Rate Loans, and (ii) three Business Days prior to the requested date of a Borrowing or any conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans; provided that, in the case of any Borrowing of Eurodollar Rate Loans on the Effective Date, such notice shall be accompanied by a customary funding indemnity letter in favor of the Agent, and in form and substance reasonably satisfactory to the Agent. (b) Each Loan Notice shall specify (i) whether the Company is requesting a Term Borrowing, a Revolving Credit Borrowing, a conversion of Loans from one Interest Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Interest Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto (each such Interest Period shall comply with the provisions of the definition of "Interest Period"). (c) If the Company fails to specify an Interest Type of Loan in a Loan Notice or if the Company fails to give a timely notice requesting a conversion or continuation, then such Loans shall be continued as of the last day of the applicable Interest Period as Eurodollar Rate Loans having a one month Interest Period. If the Company requests a Borrowing of, conversion to, or continuation of, Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. (d) Following receipt of a Loan Notice, the Agent shall promptly notify each Lender of the amount of its Pro Rata Share of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Company, the Agent shall notify each Lender of 29 the details of any automatic extension of such Eurodollar Rate Loan for a one month Interest Period. In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Agent in immediately available funds at the Agent's Office not later than 1:00 p.m (New York City time). on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.01, the Agent shall make all funds so received available to the Company in like funds as received by the Agent either by (i) crediting the account of the Company on the books of BofA with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Agent by the Company. (e) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. (f) Notwithstanding any contrary provision hereof, if an Event of Default as set forth in Section 8.01(a), (f) or (g) has occurred and is continuing, unless the Required Lenders otherwise consent or any other Event of Default has occurred and is continuing and the Required Lenders have requested, each Borrowing will be converted into a Base Rate Borrowing at the end of the Interest Period applicable thereto. (g) The Agent shall promptly notify the Company and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. The determination of the Eurodollar Rate by the Agent shall be conclusive in the absence of manifest error. At any time that Base Rate Loans are outstanding, the Agent shall notify the Company and the Lenders of any change in BofA's prime rate used in determining the Base Rate promptly following the public announcement of such change. (h) The failure of any Lender to make the Loan to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Loan on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on the date of any Borrowing. Section 2.04. Notes; Loan Accounts. (a) Each Loan made by each Lender shall be evidenced by one or more loan accounts or records maintained by such Lender and by the Agent in the ordinary course of business. The loan accounts or records maintained by the Agent and each Lender shall be presumptive evidence of the amount of the Loans made by the Lenders to the Company and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Company hereunder to pay any amount owing with respect to the Loans. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Agent in respect of such matters, the accounts and records of the Agent shall control in the absence of manifest error. (b) Upon the request of any Lender made through the Agent, instead of or in addition to loan accounts, the Loans made by each Lender may be evidenced by one or more notes in substantially the form of Exhibit B-1 hereto, in the case of Term Loans (each such note, a "Term Note"), and Exhibit B-2 hereto, in the case of Revolving Credit Loans (each such note, a "Revolving Credit Note," and, together with Term Notes, collectively, the "Notes"). Each 30 Lender shall endorse on the schedules annexed to its Note the date, amount and maturity of each Loan deemed made by it and the amount of each payment of principal made by the Company with respect thereto. Each such Lender is irrevocably authorized by the Company to endorse its Note and each Lender's record shall be conclusive absent demonstrable error; provided that the failure of a Lender to make, or an error in making, a notation thereon with respect to any Loan shall not limit or otherwise affect the obligations of the Company hereunder or under any such Note to such Lender. Section 2.05. Termination or Reduction of Commitments (a) Optional. The Company may, upon notice to the Agent, terminate or reduce the unused portions of the Revolving Credit Commitments; provided that (i) any such notice shall be received by the Agent not later than 12:00 noon three Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $3,000,000 or any whole multiple of $1,000,000 in excess thereof and (iii) the Company shall not terminate or reduce the unused portions of the Revolving Credit Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Outstandings would exceed the Revolving Credit Facility. (b) Mandatory. (i) Unless previously terminated, the Term Loan Commitments under the Term Facility will terminate on the Effective Date immediately after the closing hereunder. (ii) Unless earlier terminated, the Revolving Credit Commitments under the Revolving Credit Facility will terminate on the Termination Date. (iii) The Revolving Credit Facility shall be automatically and permanently reduced on each date on which the prepayment of Revolving Credit Loans outstanding thereunder is required to be made pursuant to Section 2.08(b) by an amount equal to the applicable Reduction Amount. (c) The Agent will promptly notify the Lenders of any termination or reduction of unused portions of the unused Revolving Credit Commitment under this Section 2.05. Upon any reduction of the unused Revolving Credit Commitments, the Revolving Credit Commitment of each Revolving Credit Lender shall be reduced by such Lender's Pro Rata Share of such reduction amount. (d) All fees accrued until the effective date of any termination or reduction of the Commitments shall be paid on the effective date of such termination or reduction. Section 2.06. Payment at Maturity. The Company shall repay to the Agent (i) with respect to Term Loans, on the Maturity Date, and (ii) with respect to Revolving Credit Loans, on the Termination Date, for the account of each Lender, the then unpaid principal amount of such Lender's Loans together with accrued and unpaid interest thereon to but excluding the date of such payment. 31 Section 2.07. Repayment of Loans (a) Term Loans. The Company shall repay to the Agent, for the ratable account of the Term Lenders, the following percentages of the initial aggregate principal amount of all Term Loans on the following dates (which percentages shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.08(c)):
----------------------------- ----------------------- Date Percentage ----------------------------- ----------------------- ----------------------------- ----------------------- September 30, 2005 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- December 31, 2005 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- March 31, 2006 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- June 30, 2006 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- September 30, 2006 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- December 31, 2006 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- March 31, 2007 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- June 30, 2007 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- September 30, 2007 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- December 31, 2007 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- March 31, 2008 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- June 30, 2008 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- September 30, 2008 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- December 31, 2008 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- March 31, 2009 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- June 30, 2009 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- September 30, 2009 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- December 31, 2009 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- March 31, 2010 0.25% ----------------------------- ----------------------- ----------------------------- ----------------------- Maturity Date 95.25% ----------------------------- ----------------------- ----------------------------- ----------------------- Total 100.00% ----------------------------- ----------------------- ----------------------------- -----------------------
(b) Revolving Credit Loans. The Company shall repay to the Agent for the ratable account of the Revolving Credit Lenders on the Termination Date the aggregate principal amount of all Revolving Credit Loans outstanding on such date. Section 2.08. Optional and Mandatory Prepayments (a) Optional Prepayments. The Company will have the right at any time to prepay any Borrowing in whole or in part, in minimum amounts of $3,000,000 or any multiple of $1,000,000 in excess thereof, subject to the provisions of this Section. (b) Mandatory Prepayments. The Company shall be required to make mandatory prepayments as set forth in subclauses (i) to (v) below unless (x) the Debt to Total Capitalization Ratio is equal to or less than 20% and (y) each of the Company's Insurance Subsidiaries (other than Conseco Senior Health Insurance Company, Bankers Life Insurance Company of Illinois, Conseco Life Insurance Company of Texas and Conseco Life Insurance Company of New York) has a financial strength rating of not less than A- from A.M. Best Company, in each case at the time such prepayment is required to be made (the "Financial Strength Rating Condition"); provided, however, that the foregoing exclusion from the obligation to make mandatory 32 prepayments will not apply to prepayments required in respect of the Net Proceeds of unsecured Indebtedness permitted under Section 7.01(a)(xiv) in excess of $100,000,000 in the aggregate and Permitted Convertible Indebtedness. (i) Indebtedness. Within five Business Days after any Net Proceeds are received by or on behalf of the Company or any Subsidiary in respect of the incurrence of any Indebtedness by the Company or such Subsidiary, including Permitted Refinancing Indebtedness, unsecured Indebtedness permitted under Section 7.01(a)(xiv) in excess of $100,000,000 in the aggregate and Permitted Convertible Indebtedness, but excluding all other Indebtedness permitted pursuant to Section 7.01, the Company shall prepay Borrowings in an aggregate amount equal to such Net Proceeds. (ii) Equity Issuances. Within five Business Days after any Net Proceeds are received by or on behalf of the Company or any Subsidiary in respect of the issuance by the Company or such Subsidiary of any Capital Stock, or the receipt by the Company or such Subsidiary of any capital contribution (other than (x) issuances of Capital Stock to the Company or its Subsidiaries or capital contributions between the Company and its Subsidiaries or between Subsidiaries or (y) the issuance of Capital Stock to, or otherwise acquired by, directors, officers or employees of the Company or its Subsidiaries pursuant to any stock option, restricted stock or similar compensation plan approved by the board of directors of the Company or (z) the issuance of Capital Stock as consideration for an Acquisition permitted under this Agreement), the Company shall prepay Borrowings in an aggregate amount equal to 50% of such Net Proceeds. (iii) Asset Sales. Within five Business Days after any Net Proceeds are received by or on behalf of the Company or any Subsidiary in respect of the occurrence of any Asset Sale, the Company shall prepay Borrowings in an aggregate amount equal to such Net Proceeds; provided that a prepayment of the Borrowings shall be required pursuant to this paragraph only to the extent that the aggregate Net Proceeds of all Asset Sales in any Fiscal Year exceeds $5,000,000; provided that so long as no Event of Default shall have occurred and be continuing, and except in the case of the Net Proceeds from any sale of an Insurance Subsidiary that would constitute a Material Disposition, the Company may reinvest all or any portion of such Net Proceeds in assets useful in its business so long as, within 180 days after the receipt of such Net Proceeds, such reinvestment shall have been consummated or the Company shall have entered into a definitive agreement for such reinvestment, and such reinvestment shall have been consummated no later than 270 days after the receipt of such Net Proceeds (in each case, as certified by the Company in writing to the Agent); and provided further that any Net Proceeds not subject to such definitive agreement or so reinvested by such 180th or 270th day, as the case may be, shall be immediately applied to the prepayment of the Loans as set forth in this Section 2.08(b)(iii). (iv) Casualty Events. Within five Business Days after any Net Proceeds are received by or on behalf of the Company or any Subsidiary (that is not an Insurance Subsidiary or a Subsidiary of an Insurance Subsidiary) in respect of the occurrence of any Casualty Event, the Company shall prepay Borrowings in an aggregate amount equal to such Net Proceeds; provided that a prepayment of the Borrowings shall be required 33 pursuant to this paragraph only to the extent that the aggregate Net Proceeds of all Casualty Events in any Fiscal Year exceeds $5,000,000; provided that so long as no Event of Default shall have occurred and be continuing, the Company may apply all or any portion of such Net Proceeds to the repair of the property subject to such Casualty Event or the acquisition of replacement property so long as within 180 days after the receipt of such Net Proceeds, such repair or replacement shall have been consummated or the Company shall have entered into definitive agreement for such repair or replacement, and such repair or replacement shall have been consummated no later than 270 days after the receipt of such Net Proceeds (in each case, as certified by the Company in writing to the Agent); and provided further that any Net Proceeds not subject to such definitive agreement or so applied by such 180th or 270th day, as the case may be, shall be immediately applied to the prepayment of the Loans as set forth in this Section 2.08(b)(iv). (v) Conseco Excess Cash Flow. Commencing with the Excess Cash Calculation Period ending December 31, 2004, the Company shall prepay Borrowings in an aggregate amount equal to 50% of the Conseco Excess Cash Flow for each Excess Cash Calculation Period; provided that the amount, if any, required to be applied towards prepayment of Borrowings pursuant to this subsection (v) shall be reduced by (A) any amount that any Department shall require the Company to reinvest in or otherwise return to any Insurance Subsidiary to the extent that such amount is included in the calculation of the amount determined pursuant to this subsection (v), in each case as certified by a Responsible Officer pursuant to a certificate delivered to the Agent at the time of prepayment (or, if no prepayment is required with respect to any Excess Cash Calculation Period, within 120 days after the end of such Excess Cash Calculation Period) and (B) the aggregate amount of voluntary prepayments of the Loans made by the Company during such Calculation Period. Each such prepayment shall be made on or before the date on which financial statements are delivered pursuant to Section 6.01(a) with respect to the relevant Excess Cash Calculation Period (and in any event within 120 days after the end of such Excess Cash Calculation Period). (vi) Revolving Credit Facility. If for any reason the Total Revolving Credit Outstandings at any time exceed the Revolving Credit Facility at such time, the Company shall immediately prepay Revolving Credit Loans in an aggregate amount equal to such excess. (c) Application of Prepayments. Each prepayment of any Borrowing pursuant to Sections 2.08(b)(i) to (v) shall be applied first to the Term Loans for application to the next four scheduled principal payments thereof after the occurrence of the event giving rise to such prepayment in direct order of maturity, second, to the Term Loans for application ratably to the remaining principal repayment installments thereof until paid in full and, third, to the Revolving Credit Facility in the manner set forth in Section 2.08(d). Each prepayment pursuant to Section 2.08(a) shall be applied as directed by the Borrower. (d) Reduction Amount. After the prepayment in full of the Term Loans pursuant to Section 2.08(c) above, prepayments of the Revolving Credit Facility made pursuant to Section 2.08(b) (other than pursuant to clause (vi) thereof) shall initially be applied ratably to the 34 outstanding Revolving Credit Loans, and, in the case of prepayments of the Revolving Credit Facility required pursuant to clause (i), (ii), (iii), (iv) or (v) of Section 2.08(b), the amount remaining, if any, after the prepayment in full of all Revolving Credit Loans outstanding at such time may be retained by the Company for use in the ordinary course of its business. The Commitments under the Revolving Credit Facility shall be automatically and permanently reduced by the sum of (i) any mandatory prepayment amount and (ii) any remaining amount retained by the Company, in each case, pursuant to Section 2.08(b)(iii) or (iv) (being, collectively, the "Reduction Amount") as set forth in Section 2.05(b)(iii). (e) Accrued Interest. Each prepayment of a Borrowing shall be accompanied by accrued interest on the amount prepaid. (f) Notice of Prepayments. The Company shall notify the Agent in writing of any prepayment of any Borrowing hereunder (i) in the case of a Eurodollar Rate Borrowing, not later than 12:00 Noon (New York City time) three Business Days before the date of prepayment and (ii) in the case of a Base Rate Borrowing, not later than 12:00 Noon (New York City time) on the prepayment date. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, without limiting Section 6.02, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly after it receives any such notice, the Agent shall advise the Lenders of the contents thereof. Section 2.09. Interest. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof for each day at a rate per annum equal to the Base Rate plus the Applicable Margin. (b) Each Eurodollar Rate Loan shall bear interest on the outstanding principal amount for each Interest Period applicable thereto at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Margin. (c) Notwithstanding the foregoing, upon the occurrence of any Event of Default, for so long as such Event of Default shall be continuing, the principal of and interest on each Loan shall, without further notice in the case of any Event of Default pursuant to Section 8.01(a), Section 8.01(f) or Section 8.01(g), and upon notice from the Agent (upon the instruction of the Required Lenders) in the case of any other Event of Default, bear interest, after as well as before judgment to the extent permitted by law, at a rate per annum equal to 2% plus the rate otherwise applicable to such Loan as provided in the preceding subsections of this Section. In addition, if any fee or other amount (other than principal or interest on any Loan) payable by the Company pursuant to any Loan Document is not paid when due, whether upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment to the extent permitted by law, at a rate per annum equal to 2.0% plus the rate otherwise applicable to such Loan as provided in the preceding subsections of this Section. (d) Interest on each Loan shall be paid in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to Section 2.09(c) shall be payable on demand of the Agent (upon the instruction of the Required Lenders), (ii) upon any repayment of any Loan, interest accrued on the principal amount repaid shall be payable on the date of such 35 repayment and (iii) upon any conversion of a Eurodollar Rate Loan before the end of the current Interest Period therefor, interest accrued on such Loan shall be payable on the effective date of such conversion. (e) Anything herein to the contrary notwithstanding, the obligations of the Company to any Lender hereunder shall be subject to the limitation that payments of interest shall not be required for any period for which interest is computed hereunder to the extent (but only to the extent) that contracting for or receiving such payment by such Lender would be contrary to the provisions of any law applicable to such Lender limiting the highest rate of interest that may be lawfully contracted for, charged or received by such Lender, and in such event the Company shall pay such Lender interest at the highest rate permitted by applicable law. Section 2.10. Fees. (a) The Company shall pay to the Agent, for its own account, fees payable in the amounts and at the times separately agreed upon by the Company and the Agent. Such fees shall be fully earned when paid and shall not be refundable under any circumstances. (b) The Company shall pay to the Agent for the account of each Revolving Credit Lender in accordance with its Pro Rata Share of the aggregate Revolving Credit Commitments, a commitment fee equal to 0.50% of the unused portion of the Revolving Credit Facility, such fee to be payable quarterly in arrears and on the date of termination, reduction or expiration of the Revolving Credit Commitments under the Revolving Credit Facility. The commitment fee shall accrue at all times during the period of this Agreement, including at any time during which one or more of the conditions in Section 4.02 is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Effective Date, and on the Termination Date. The commitment fee shall be calculated quarterly in arrears. Notwithstanding anything herein to the contrary, the commitment fee shall cease to accrue on that portion of the Revolving Credit Commitment held by a Defaulting Lender so long as such Lender is a Defaulting Lender. Section 2.11. Computation of Fees and Interest. (a) All computations of interest for Base Rate Loans when the Base Rate is determined by BofA's "prime rate" shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more interest being paid than if computed on the basis of a 365-day year). Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof. (b) Each determination of an interest rate by the Agent shall be conclusive and binding on the Company and the Lenders in the absence of demonstrable error. The Agent will, at the request of the Company or any Lender, deliver to the Company or the Lender, as the case may be, a statement showing the quotations used by the Agent in determining any interest rate and the resulting interest rate. Section 2.12. Payments Generally. (a) All payments to be made by the Company under the Loan Documents shall be made without condition or deduction for any defense, set-off, recoupment or counterclaim. Except as otherwise expressly provided in any Loan Document, all payments to be made by the Company under any Loan Document shall be made to the Agent for 36 the account of the Lenders at the Agent's Office, and shall be made in dollars and in immediately available funds, no later than 3:00 p.m. (New York City time) on the date specified in such Loan Document. The Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as expressly provided herein) of such payment in like funds as received. Any payment received by the Agent later than 3:00 p.m. (New York City time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue. (b) Subject to the provisions set forth in the definition of "Interest Period" herein, whenever any payment is due on a day other than a Business Day, such payment shall be made on the following Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be. (c) Unless the Company or any Lender has notified the Agent, prior to the date any payment is required to be made by it to the Agent hereunder, that the Company or such Lender, as the case may be, will not make such payment, the Agent may assume that the Company or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Agent in immediately available funds, then: (i) if the Company failed to make such payment, each Lender shall forthwith on demand repay to the Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Agent to such Lender to the date such amount is repaid to the Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Agent to the Company to the date such amount is recovered by the Agent (the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the Agent, then such amount shall constitute such Lender's Loan included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon the Agent's demand therefor, the Agent may make a demand therefor upon the Company, and the Company shall pay such amount to the Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights that the Agent or the Company may have against any Lender as a result of any default by such Lender hereunder. A notice of the Agent to any Lender or the Company with respect to any amount owing under this subsection (c) shall be conclusive, absent manifest error. 37 (d) If any Lender makes available to the Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article 2, and such funds are not made available to the Company by the Agent because the conditions to the extension of Loans set forth in Article 4 are not satisfied or waived in accordance with the terms hereof, the Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest. (e) The obligations of the Lenders hereunder to make Loans are several and not joint. The failure of any Lender to make any Loan on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan. (f) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner. Section 2.13. Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment (a) on account of any Obligations due and payable hereunder and under the other Loan Documents at such time resulting in such Lender receiving payment in excess of its ratable share (calculated according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) of or on account of any of Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (calculated according to the proportion of (i) the amount of such Obligations owing (but not due and payable) to such Lender at such time to (ii) the aggregate amount of Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time, then in each case, such Lender shall (x) notify the Agent of such fact, and (y) purchase (for cash at face value) participations in the Obligations of the other Lenders due and payable or owing, as the case may be, or make such other adjustments as shall be equitable, so that the benefit of such excess payments shall be shared by all such Lenders, provided that: (A) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and (B) the provisions of this Section shall not be construed to apply to (1) any payment made by the Company pursuant to and in accordance with the express terms of this Agreement or (2) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Company or any Subsidiary thereof (as to which the provisions of this Section shall apply). 38 Each Obligor consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Obligor rights of setoff and counterclaim (subject to Section 10.09) with respect to such participation as fully as if such Lender were a direct creditor of such Obligor in the amount of such participation. Section 2.14. Incremental Facility. The Company may, at one time prior to the Maturity Date, by notice to the Agent, request the addition of a new facility or an increase in the Term Facility (such increase or any new facility being a "Commitment Increase") equal to up to $325,000,000 in the aggregate for all Commitment Increases, to be effective as of a date that is at least 90 days prior to the scheduled Maturity Date (for such Commitment Increase, the "Increase Date") as specified in the related notice to the Agent; provided, however, that (i) on the Increase Date the Company shall be in pro forma compliance with all financial covenants set forth in Sections 7.11, 7.12, 7.14 and 7.15; (ii) on the Increase Date no Default or Event of Default shall have occurred and be continuing; (iii) such Commitment Increase shall be documented on other terms and conditions that are reasonably satisfactory to the Agent and the Company; and (iv) if on the closing of the Commitment Increase, the applicable margin on the Commitment Increase is greater than 0.25% per annum above the Applicable Margin on the Term Facility, the Applicable Margin on the Term Facility shall be increased to a percentage per annum equal to (A) the applicable margin on the Commitment Increase minus (B) 0.25% per annum; and (v) notwithstanding any other provision of any Loan Document (including, without limitation, Section 10.01), the Loan Documents may be amended by the Agent and the Company, if necessary, to provide for terms applicable to each Commitment Increase consistent with the terms hereof. ARTICLE 3 TAXES, YIELD PROTECTION AND ILLEGALITY Section 3.01. Taxes. (a) Any and all payments by the Company to any Lender or the Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Taxes. In addition, the Company shall pay all Other Taxes. (b) If the Company shall be required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable hereunder to any Lender or the Agent and, in the case of Taxes, such Taxes arise as a result of a change in law occurring after the date hereof, then: (i) the sum payable shall be increased as necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 3.01), such Lender or the Agent, as the case may be, receives and retains an amount equal to the sum it would have received and retained had no such deductions or withholdings been made; (ii) the Company shall make such deductions and withholdings; 39 (iii) the Company shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law; and (iv) the Company shall also pay to each Lender or the Agent, at the time interest is paid, Further Taxes in the amount that the respective Lender or the Agent specifies as necessary to preserve the after-tax yield the Lender or the Agent would have received if such Taxes, Other Taxes or Further Taxes had not been imposed. (c) The Company agrees to indemnify and hold harmless each Lender and the Agent for the full amount of Taxes, Other Taxes and Further Taxes (provided that, in the case of Taxes, such Taxes arise as a result of a change in law occurring after the date hereof) in the amount that the respective Lender or the Agent specifies as necessary to preserve the after-tax yield the Lender or the Agent would have received if such Taxes, Other Taxes or Further Taxes had not been imposed, and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly or legally asserted. Payment under this indemnification shall be made within 30 days after the date the Lender or the Agent makes written demand therefor; provided that the Company shall not be required to indemnify for any additional penalties, interest, additions to tax and expenses arising more than 120 days prior to the date the Lender or the Agent delivers such demand. If any Lender receives a refund in respect of any Taxes, Other Taxes or Further Taxes as to which it has been indemnified by the Company or with respect to which the Company (or any Person on behalf of the Company) has paid additional amounts pursuant to this Section 3.01, it shall promptly repay such refund to the Company (but only to the extent of indemnity payments made, or additional amounts paid, by the Company (or such Person acting on behalf of the Company) under this Section 3.01 with respect to the Taxes, Other Taxes or Further Taxes giving rise to such refund), net of all out-of-pocket expenses of such Lender or the Agent, as the case may be; provided that the Company, upon the request of such Lender or the Agent, agrees to return such refund (together with any penalties, interest or other charges due in connection therewith to the appropriate taxing authority or other Governmental Authority) to such Lender or the Agent in the event such Lender or the Agent is required to pay or to return such refund to the relevant taxing authority or other Governmental Authority. Nothing contained herein shall require any Lender to disclose its tax records to the Company or any other Person except for such tax records as relate solely to Taxes, Other Taxes and Further Taxes as to which it has been indemnified by the Company or with respect to which the Company (or any Person on behalf of the Company) has paid additional amounts pursuant to this Section 3.01. (d) Within 30 days after the date of any payment by the Company of any Taxes, Other Taxes or Further Taxes that relate to the Agent or any Lender, the Company shall furnish to each affected Lender or the Agent, as applicable, the original or a certified copy of a receipt evidencing payment thereof or other evidence of payment reasonably satisfactory to such Lender or the Agent. (e) If the Company is required to pay any amount to any Lender pursuant to subsection (b) or (c) of this Section 3.01, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office so as to eliminate any such additional payment by the Company which may thereafter accrue, if 40 such change, in the sole reasonable judgment of such Lender, is not otherwise disadvantageous to such Lender. Section 3.02. Illegality. (a) If any Lender determines that the introduction of any Requirement of Law, or any change in any Requirement of Law, or in the interpretation or administration of any Requirement of Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make Eurodollar Rate Loans, then, on notice thereof by the Lender to the Company through the Agent, any obligation of that Lender to make Eurodollar Rate Loans shall be suspended until the Lender notifies the Agent and the Company that the circumstances giving rise to such determination no longer exist. (b) If a Lender determines that it is unlawful for such Lender to maintain any Eurodollar Rate Loan, the Company shall, upon its receipt of written notice of such fact and demand from such Lender (with a copy to the Agent), prepay in full such Eurodollar Rate Loans of that Lender then outstanding, together with interest accrued thereon and amounts required under Section 3.04, either on the last day of the Interest Period thereof, if the Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if the Lender may not lawfully continue to maintain such Eurodollar Rate Loan. If the Company is required to so prepay any Eurodollar Rate Loan, then concurrently with such prepayment, the Company shall borrow from the affected Lender, in the amount of such prepayment, a Base Rate Loan. (c) If the obligation of any Lender to make or maintain Eurodollar Rate Loans has been so terminated or suspended, the Company may elect, by giving notice to the Lender through the Agent, that all Loans which would otherwise be made or maintained by the Lender as Eurodollar Rate Loans shall instead be Base Rate Loans. (d) Before giving any notice to the Agent under this Section 3.02, the affected Lender shall designate a different Lending Office with respect to its Eurodollar Rate Loans if such designation will avoid the need for giving such notice or making such demand and will not, in the judgment of the Lender, be illegal or otherwise disadvantageous to the Lender. Section 3.03. Increased Costs and Reduction of Return. (a) If any Lender determines that, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation or (ii) the compliance by that Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any Eurodollar Rate Loans, then the Company shall be liable for, and shall from time to time, upon written demand (with a copy of such demand to be sent to the Agent), pay to the Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for such increased costs. (b) If any Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) 41 compliance by the Lender (or its Lending Office) or any corporation controlling the Lender with any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by the Lender or any corporation controlling the Lender and (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy and such Lender's desired return on capital) determines that the amount of such capital is increased as a consequence of its Commitment, loans, credits or obligations under this Agreement, then, thirty (30) days after written demand by such Lender to the Company through the Agent, the Company shall pay to the Lender, from time to time as specified by the Lender, additional amounts sufficient to compensate the Lender for such increase; provided that the Company shall not be required to compensate a Lender for any such increases in capital for any period more than 120 days prior to the date such Lender delivers such demand. (c) Section 3.01 and not this Section 3.03 shall be the only Section of this Agreement that applies to increased costs with respect to Taxes, Further Taxes and Other Taxes. Section 3.04. Funding Losses. The Company shall reimburse each Lender and hold each Lender harmless from any loss or expense which the Lender may sustain or incur as a consequence of: (a) the failure of the Company to make on a timely basis any payment of principal of any Eurodollar Rate Loan; (b) the failure of the Company to continue a Loan after the Company has given (or is deemed to have given) a Notice of Continuation; (c) the failure of the Company to make any prepayment of any Loan in accordance with any notice delivered under Section 2.08; or (d) the prepayment (including pursuant to Section 2.08) or other payment (including after acceleration thereof) of a Eurodollar Rate Loan on a day that is not the last day of the relevant Interest Period; including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain its Eurodollar Rate Loans or from fees payable to terminate the deposits from which such funds were obtained, but excluding any administrative fee or other amount chargeable by such Lender for the calculation of such loss. For purposes of calculating amounts payable by the Company to the Lenders under this Section 3.04 and under subsection 3.03(a), each Eurodollar Rate Loan made by a Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the Eurodollar Rate used in determining the Eurodollar Rate for such Eurodollar Rate Loan by a matching deposit or other borrowing in the interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan is in fact so funded. Section 3.05. Inability to Determine Rates. If the Required Lenders determine that for any reason adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the 42 Agent will promptly so notify the Company and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Agent (upon the instruction of the Required Lenders) revokes such notice in writing. Upon receipt of such notice, the Company may revoke any Notice of Continuation then submitted by it. If the Company does not revoke such Notice of Continuation, the Lenders shall make, convert or continue the Loans, as proposed by the Company, in the amount specified in the applicable notice submitted by the Company, but such Loans shall be made, converted or continued as Base Rate Loans instead of Eurodollar Rate Loans. Notwithstanding the foregoing, the Agent and each Lender shall take any reasonable actions available to them (including designation of different Lending Offices), consistent with legal and regulatory restrictions, that will avoid the need to take the steps described in this Section 3.05, which will not, in the reasonable judgment of the Agent or such Lender, be materially disadvantageous to the Agent, such Lender or the Company, as compared to the steps described in this Section 3.05. Section 3.06. Certificates of Lenders. Any Lender claiming reimbursement or compensation under this Article shall deliver to the Company (with a copy to the Agent) a certificate setting forth in reasonable detail the amount payable to the Lender hereunder and such certificate shall be conclusive and binding on the Company in the absence of demonstrable error. Such certificate shall set forth in reasonable detail (in the form of Exhibit E hereto for amounts claimed with respect to Eurodollar Rate Loans under Section 3.04 and in a form reasonably determined by the applicable Lender with respect to Base Rate Loans) the methodology used in determining the amount payable to the Lender. Section 3.07. Substitution of Lenders. If the Company receives notice from any Lender of a claim for compensation under Section 3.01, 3.02 or 3.03, the Company may, upon notice to such Lender and the Agent, replace such Lender by causing such Lender to assign its Loans (with the assignment fee to be paid by the Company in such instance) pursuant to Section 10.07(b) to one or more other Lenders or Eligible Assignees procured by the Company; provided that (x) the Company shall be obligated to replace all Lenders that have made similar requests for compensation and (y) each such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it under the Loan Documents from the applicable assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts). The Company shall release such Lender from its obligations under the Loan Documents. Any Lender being replaced shall execute and deliver an Assignment and Assumption with respect to such Lender's outstanding Loans. Section 3.08. Survival. The agreements and obligations of the Company in Section 3.01, Section 3.03, Section 3.04 and Section 3.06 shall survive the termination of this Agreement and the payment of all other Obligations for a period of one year. ARTICLE 4 CONDITIONS PRECEDENT Section 4.01. Conditions of Initial Borrowing. The obligations of each Lender to make any Loan hereunder, and the amendment and restatement of the Existing Credit Agreement 43 pursuant to the terms hereof, shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 10.01): (a) The Agent shall have received each of the following, each of which shall be originals or facsimiles or Adobe PDFs delivered by electronic mail (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Obligor, each dated the Effective Date (or, in the case of certificates of governmental officials, a recent date before the Effective Date) and each in form and substance reasonably satisfactory to the Agent and each of the Lenders: (i) executed counterparts of this Agreement, sufficient in number for distribution to the Agent, each Lender and the Company; (ii) executed affirmations and consents to this Agreement from each Subsidiary Guarantor substantially in the form of Exhibit I (each, an "Affirmation and Consent"); and (iii) a Note executed by the Company in favor of each Lender that has requested a Note. (b) The Agent shall have received (i) a certificate with respect to each Obligor dated the Effective Date and signed by a Responsible Officer or other executive officer of such Obligor certifying that the Collateral and Guarantee Requirement has been and continues to be satisfied with respect to such Obligor and that each Security Document is in full force and effect together with such evidence that the Agent may reasonably request in connection therewith and (ii) reasonably satisfactory evidence that all insurance required by the Loan Documents is in effect. (c) The Agent shall have received: (i) copies of the resolutions of the board of directors, authorized subcommittee thereof, or other equivalent body of each Obligor authorizing the Transactions to which such Obligor is a party, certified as of the Effective Date by the Secretary or an Assistant Secretary of such Obligor; and (ii) a certificate of the Secretary or Assistant Secretary of each Obligor certifying the names and true signatures of the officers of such Obligor authorized to execute, deliver and perform, as applicable, this Agreement and all other Loan Documents to be delivered by such Obligor hereunder. (d) The Agent shall have received: (i) the articles or certificate of incorporation or equivalent document of each Obligor as in effect on the Effective Date, certified by the Secretary of State of its state of incorporation or organization as of a recent date; (ii) the bylaws or equivalent document of each Obligor as in effect on the Effective Date, certified by the Secretary or Assistant Secretary of such Obligor as of the Effective Date; 44 (iii) a certificate of good standing or equivalent document for each Obligor from the Secretary of State (or similar, applicable Governmental Authority) of its state of incorporation or organization as of a recent date; and (iv) a compliance certificate for each Insurance Subsidiary (other than with respect to Conseco Health Insurance Company, Conseco Life Insurance Company and Conseco Life Insurance Company of Texas) from the Department of Insurance of its jurisdiction of domicile as of a recent date. (e) The Agent shall have received a favorable written opinion (addressed to the Agent and the Lenders and dated the Effective Date) of each of (i) Kirkland & Ellis LLP, counsel for the Obligors, substantially in the form of Exhibit H-1 and (ii) Baker & Daniels LLP, Indiana counsel for the Obligors, substantially in the form of Exhibit H-2. (f) The Agent and each Lender shall have been paid all accrued and unpaid fees, and reasonable costs and expenses to the extent then due and payable to the Agent or such Lender on or before the Effective Date, including Attorney Costs of the Agent or such Lender to the extent invoiced prior to or on the Effective Date, plus such additional amounts of Attorney Costs as shall constitute the Agent's reasonable estimate of Attorney Costs incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude final settling of accounts between the Company and the Agent) including any such reasonable costs, fees and out-of-pocket expenses arising under or referenced in Section 2.10 and 10.04. (g) Each lender under the Existing Credit Agreement shall have been reimbursed its losses and expenses to which it is entitled pursuant to Section 3.04(d) of the Existing Credit Agreement. (h) The Agent shall have received a certificate signed by a Responsible Officer on behalf of the Company, dated as of the Effective Date, confirming the satisfaction of the conditions set forth in Section 4.01(i) and Section 4.01(j) and confirming that the Company and its Subsidiaries have received all required approvals of the transactions contemplated hereby and by the other Loan Documents, including the Transactions, from each applicable Governmental Authority. (i) The fact that (i) the representations and warranties of each Obligor that are not qualified as to materiality contained in the Loan Documents shall be true and correct in all material respects and (ii) the representations and warranties of each Obligor that are qualified as to materiality contained in the Loan Documents shall be true and correct, in each case, on and as of the Effective Date, as though made on and as of such date. (j) The fact that, no Default or Event of Default shall have occurred and be continuing on such date or immediately after giving effect to the Transactions. (k) Simultaneously with the initial extension of Term Loans, the Company shall have repaid all of the Indebtedness under the Existing Credit Agreement and the commitments of the lenders thereunder shall have been terminated. 45 (l) All governmental authorizations and third party approvals (or arrangements reasonably satisfactory to the Lenders in lieu of such approvals) necessary in connection with the financing contemplated hereby and the continuing operations of the Company and its Subsidiaries shall have been obtained and be in full force and effect, in each case except for such authorizations and approvals as would not be reasonably likely to have a Material Adverse Effect, and all material waiting periods shall have expired without any action being taken by any competent authority which restrains, prevents, or imposes materially adverse conditions upon, the consummation of the transactions contemplated herein. (m) Simultaneously with the initial extension of the Term Loans, the Permitted Convertible Indebtedness shall be issued and all proceeds therefrom (together with the proceeds from the Term Loans) shall be applied to refinance in full the aggregate principal amount of all loans outstanding under the Existing Credit Agreement and to pay related transaction fees, costs and expenses. (n) The fact that there are no changes, occurrences or developments that could have a Material Adverse Effect. (o) The Agent shall have received such other approvals, opinions, documents or materials as the Agent may reasonably request, all in form and substance reasonably satisfactory to the Agent. Section 4.02. Conditions to All Subsequent Borrowings. The obligation of each Lender to honor any Loan Notice (other than a notice of conversion requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent: (a) The representations and warranties of the Company contained in Article 5 or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, (x) which are not qualified as to materiality shall be true and correct in all material respects and (y) which are qualified as to materiality shall be true and correct, in each case, on and as of the date of such Loan Notice, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects, or true and correct, as the case may be, as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in Section 5.11(a) and (b) shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b), respectively. (b) The fact that, no Default or Event of Default shall have occurred and be continuing on such date or immediately after giving effect to the proposed Borrowing. (c) The Agent shall have received a Loan Notice in accordance with the requirements hereof. Each Loan Notice (other than a notice of conversion requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans) submitted by the Company shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Borrowing. 46 Section 4.03. Determinations Under Section 4.01. For purposes of determining compliance with the conditions specified in Section 4.01, each of the Lenders shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by, or acceptable or satisfactory to, the Lenders unless an officer of the Agent responsible for the Transactions shall have received notice from such Lender prior to the Effective Date specifying its objection thereto and, in the case of any Lender, such Lender shall not have made available to the Agent on the Effective Date such Lender's Pro Rata Share of the Borrowing to be made on such date. ARTICLE 5 REPRESENTATIONS AND WARRANTIES The Company represents and warrants to the Agent and each Lender that: Section 5.01. Corporate Existence and Power. The Company and each of its Subsidiaries: (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization; (b) has the corporate (or other organizational) power and authority and all governmental licenses, authorizations, consents and approvals (i) to own its assets and carry on its business and (ii) to execute, deliver, and perform its obligations under the Loan Documents; (c) is duly qualified and is licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license; (d) is in compliance with all Requirements of Law; and (e) has a fiscal year ending December 31; except, in each case referred to in clauses (a) through (d), to the extent that the failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Section 5.02. Corporate Authorization; No Contravention. The Transactions to be entered into by each Obligor are within its corporate or other organizational powers. The Transactions (including the execution, delivery and performance by each Obligor of each Loan Document to which it is a party) have been duly authorized by all necessary corporate or other organizational action of each Obligor, and do not and will not: (a) contravene the terms of any of such Obligor's Organization Documents; (b) conflict with or result in any breach or contravention of, or result in or require the creation of any Lien (other than the Transaction Liens) under, any document evidencing any material Contractual Obligation to which such Obligor is a party or any 47 order, injunction, writ or decree of any Governmental Authority to which such Obligor or its property is subject; or (c) violate any Requirement of Law, except to the extent that such violations, in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Section 5.03. Governmental Authorization. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the Transactions (including the execution, delivery or performance by, or enforcement against, each Obligor of each Loan Document to which it is a party), except (i) such as have been obtained and are in full force and effect and (ii) filings necessary to perfect the Transaction Liens. Section 5.04. Binding Effect. This Agreement has been duly executed and delivered by the Company and constitutes, and each other Loan Document to which any Obligor is to be a party, when executed and delivered by such Obligor, will constitute, a legal, valid and binding obligation of the Company or such Obligor, as the case may be, in each case enforceable against the Company or such Obligor, as the case may be, in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability. Section 5.05. Litigation. Except as set forth on Schedule 5.05, there are no actions, suits, proceedings, claims or disputes pending, or to the knowledge of the Company, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against the Company or its Subsidiaries or any of their respective properties that: (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions (including the Transactions) contemplated hereby or thereby; or (b) individually or in the aggregate could reasonably be expected to have a Material Adverse Effect. No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan Document or directing that the transactions (including the Transactions) provided for herein or therein not be consummated as herein or therein provided. Section 5.06. No Default. No Default has occurred and is continuing. Without limiting the foregoing, no Default would result from the consummation of the Transactions. As of the Effective Date, neither the Company nor any Subsidiary is in default under or with respect to any Contractual Obligation in any respect that, individually or together with all such defaults, could reasonably be expected to have a Material Adverse Effect. Section 5.07. ERISA Compliance. (a) Each Plan is in compliance with the applicable provisions of ERISA, the Code and other federal or state law except to the extent that such non-compliance could not reasonably be expected to have a Material Adverse Effect. Each Plan that is intended to qualify under Section 401(a) of the Code has either (i) received a favorable determination letter from the IRS and to the knowledge of the Company, nothing has occurred which would reasonably be expected to cause the loss of such qualification or (ii) with respect to the Plans identified on Schedule 5.07, is in the process of requesting a favorable determination letter from the IRS as to its qualified status, and the Company is not aware of any fact or issue 48 that would reasonably be expected to cause the IRS to fail to issue a favorable determination letter, except where such non-qualification could not reasonably be expected to have a Material Adverse Effect. The Company and each ERISA Affiliate has made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan, except where such lack of contribution or application for funding waiver could not reasonably be expected to have a Material Adverse Effect. (b) Except as set forth on Schedule 5.07, there are no pending or, to the knowledge of the Company, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, there has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. (c) Except for occurrences or circumstances that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect, (i) except as set forth on Schedule 5.07, since December 31, 2003, no ERISA Event has occurred or is reasonably expected to occur; (ii) except as set forth on Schedule 5.07, since December 31, 2003, no Pension Plan has any Unfunded Pension Liability; (iii) neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred that, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Company nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. Section 5.08. Margin Regulations. Neither the Company nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock. Margin Stock does not constitute more than 25% of the value of the consolidated assets of the Company and its Subsidiaries. None of the transactions contemplated by this Agreement (including the direct or indirect use of the proceeds of the Loans) will violate or result in a violation of the Securities Act of 1933, as amended, or the Exchange Act, or regulations issued pursuant thereto, or Regulation T, U or X of the FRB. Section 5.09. Title to Properties. The Company and each Subsidiary have good legal title in fee simple or rights in and power to transfer, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of their respective businesses, except for such defects in title or interests as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. As of the Effective Date, the property of the Company and its Subsidiaries is subject to no Liens, other than Liens permitted under Section 7.02. Section 5.10. Taxes. The Company and its Subsidiaries have timely filed all federal Tax, material Income Tax and other material Tax returns and reports required to be filed, and have paid all federal Tax, Income Tax and other material Taxes levied or imposed upon them or their properties, income or assets otherwise due and payable, except those that are being contested in 49 good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with SAP or GAAP, as applicable. There is no proposed Tax assessment against the Company or any Subsidiary for which a notice of deficiency or similar notice has been issued that would, if made, individually or in the aggregate, have a Material Adverse Effect or for which adequate reserves in accordance with GAAP are not being maintained by the Company or such Subsidiary. Section 5.11. Financial Condition. (a) Each of (i) the audited consolidated financial statements of the Company and its Subsidiaries dated December 31, 2004, and the related consolidated statements of income, shareholders' equity and cash flows for the Fiscal Year ended on that date, reported on by PricewaterhouseCoopers, LLP, independent public accountants, (ii) the unaudited consolidated financial statements of the Company and its Subsidiaries dated June 30, 2005, and the related consolidated statements of income, shareholders' equity and cash flows for the period ended on that date, (iii) the December 31, 2004 Annual Statement of each Insurance Subsidiary and (iv) the March 31, 2005 Quarterly Statement of each Insurance Subsidiary: (A) were prepared in accordance with GAAP or SAP, as applicable, consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, subject, in the case of such unaudited financial statements, to ordinary, good faith year end and audit adjustments and the absence of footnote disclosure; (B) fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the date thereof and results of operations for the period covered thereby; and (C) show all material indebtedness and other liabilities, direct or contingent, of the Company and its consolidated Subsidiaries as of the date thereof, including liabilities for Taxes, material commitments and Contingent Obligations. (b) The financial projections provided to the Agent prior to the date hereof (i) have been prepared in good faith based on reasonable assumptions and (ii) are based on the best information available to the Company after due inquiry (it being understood that financial projections are inherently unreliable and no assurances are given by the Company and its Subsidiaries that the results forecast in any projection will be realized and that actual results may differ materially therefrom). (c) Since December 31, 2004, there has been no material adverse change in the business, assets, operations or condition, financial or otherwise, of the Company and its Subsidiaries, taken as a whole. Section 5.12. Environmental Matters. (a) All facilities and property (including underlying groundwater) owned or leased by the Company or any of its Subsidiaries have been, and continue to be, owned or leased by the Company and its Subsidiaries in material compliance with all Environmental Laws, except where failure to so comply could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect; 50 (b) there have been no past, and there are no pending or threatened, Environmental Claims against the Company or any of its Subsidiaries, except where such Environmental Claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; (c) there have been no releases of Hazardous Materials at, on or under any property now or previously owned or leased by the Company or any of its Subsidiaries that, individually or in the aggregate, have had, or could reasonably be expected to have, a Material Adverse Effect; (d) the Company and each of its Subsidiaries have been issued and are in material compliance with all permits, certificates, approvals, licenses and other authorizations relating to environmental matters and necessary for their businesses except where failure to obtain or comply with the foregoing could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect; (e) no property now or previously owned or leased by the Company or any of its Subsidiaries is listed or, to the Company's knowledge, proposed for listing (with respect to owned property only) on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list of sites requiring investigation or clean-up, except where such listing could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect; (f) there are no underground storage tanks, active or abandoned, including petroleum storage tanks, on or under any property now or previously owned or leased by the Company or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (g) neither the Company nor any of its Subsidiaries has directly transported or directly arranged for the transportation of any Hazardous Material to any location that is listed or, to Company's knowledge, proposed for listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list or that is the subject of federal, Governmental Authority or local enforcement actions or other investigations that could reasonably be expected to lead to material claims against the Company or any of its Subsidiaries for any remedial work, damage to natural resources or personal injury, including claims under CERCLA, except where such claims could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect; (h) there are no polychlorinated biphenyls or friable asbestos present at any property now or previously owned or leased by the Company or any of its Subsidiaries that, individually or in the aggregate, could be reasonably expected to have a Material Adverse Effect; and (i) no conditions exist at, on or under any property now or previously owned or leased by the Company or any of its Subsidiaries that, with the passage of time, or the giving of notice or both, would give rise to liability under any Environmental Law, except where such liability could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect. 51 Section 5.13. Regulated Activities and Regulated Entities. Except as disclosed on Schedule 5.13, none of the Company, any Person controlling the Company, or any Subsidiary, is an "Investment Company" within the meaning of, or subject to regulation under, the Investment Company Act of 1940. None of the Company or any Subsidiary is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, any state public utilities code or any other Federal or state statute or regulation limiting its ability to incur Indebtedness. Section 5.14. Subsidiaries. Schedule 5.14 sets forth the name of, and the ownership interest of the Company (or the applicable Subsidiary) in, each of its Subsidiaries and identifies each Subsidiary that is a Subsidiary Guarantor, a Foreign Subsidiary, an Immaterial Subsidiary and/or an Insurance Subsidiary, in each case as of the Effective Date. All the Company's Subsidiaries are, and will at all times be, fully consolidated in its consolidated financial statements. As of the Effective Date (i) each Subsidiary is a Wholly-Owned Subsidiary and (ii) each Subsidiary (other than the Insurance Subsidiaries, Subsidiaries of Insurance Subsidiaries, Foreign Subsidiaries and Immaterial Subsidiaries) is also a Subsidiary Guarantor. Section 5.15. Insurance Licenses. No License of the Company or any Insurance Subsidiary, the loss of which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect, is the subject of a proceeding for suspension or revocation. To the Company's knowledge, there is no sustainable basis for such suspension or revocation, and no such suspension or revocation has been threatened by any Governmental Authority. Section 5.16. Full Disclosure. The Company has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any Subsidiary is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the representations or warranties made by any Obligor in any Loan Document to which it is a party as of the date such representations and warranties are made or deemed made, and none of the exhibits, reports, statements or certificates furnished by or on behalf of the Company or any Subsidiary pursuant to the Loan Documents, taken as a whole, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered. Section 5.17. Solvency. Immediately after the Transactions to occur on the Effective Date are consummated, (a) the fair value of the assets of each Obligor, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of each Obligor will exceed the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each Obligor will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) no Obligor will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and proposed to be conducted after the Effective Date; provided that in the case of any Obligor that is a going concern, the value of the assets of such Obligor (for purposes of clauses (a) and (b) above) shall be determined on a going-concern basis. 52 Section 5.18. Security Interests. On the Effective Date, the Security Documents will create valid security interests in the Collateral to the extent set forth therein. At all times thereafter, the Security Documents will create valid and, when financing statements are filed in the offices specified in the Perfection Certificates delivered pursuant to the Security Agreement, perfected security interests in the Collateral from time to time covered or purportedly covered thereby to the extent that a security interest in such Collateral may be perfected by filing under the Uniform Commercial Code. Such security interests will be prior to all other Liens (except Liens permitted under Section 7.02(c), Section 7.02(d), Section 7.02(e), Section 7.02(f), Section 7.02(g), Section 7.02(h), Section 7.02(i), Section 7.02(k), Section 7.02(l), Section 7.02(o), Section 7.02(q) and Section 7.02(r) on the Collateral until the applicable Security Interest are released in accordance with the Loan Documents. Section 5.19. Insurance. The insurance maintained by or reserved on the books of the Company and its Subsidiaries is sufficient to protect the Company and its Subsidiaries and their respective directors and officers against such risks as are usually insured against in accordance with industry practice by companies in the same or similar business. ARTICLE 6 AFFIRMATIVE COVENANTS Until all principal of and interest on each Loan and all fees and other amounts payable hereunder have been paid in full (other than contingent indemnification obligations not yet due and payable), the Company covenants and agrees with the Lenders that: Section 6.01. Financial Statements. The Company shall deliver to the Agent and each Lender: (a) promptly upon filing thereof with the SEC (including as part of a Form 10-K) but not later than 90 days after the end of each Fiscal Year, copies of the audited consolidated and the unaudited consolidating balance sheet of the Company and its Subsidiaries as at the end of such year and the related audited consolidated and unaudited consolidating statements of operations, shareholders' equity and cash flows for such year, setting forth in the case of the audited consolidated statements in comparative form the figures for the previous Fiscal Year, and accompanied by the opinion of PricewaterhouseCoopers LLP or another nationally-recognized independent public accounting firm ("Independent Auditor"), which opinion shall state that such audited consolidated financial statements present fairly in all material respects the financial position and result of operations of the Company and its Subsidiaries for the periods indicated in conformity with GAAP applied on a basis consistent with prior years, except as stated therein. Such opinion shall be without a "going concern" or like qualification and shall not be qualified or limited because of a restricted or limited examination by the Independent Auditor of any material portion of the Company's or any Subsidiary's records; (b) promptly upon filing thereof with the SEC (including as part of a Form 10-Q) but not later than 50 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, copies of the condensed unaudited consolidated and consolidating balance sheet of the Company and its Subsidiaries as of the end of such quarter and the related condensed unaudited consolidated and consolidating statements of operations, shareholders' equity and cash flows for 53 the period commencing on the first day and ending on the last day of such quarter and for the then elapsed portion of such Fiscal Year, setting forth in the case of the consolidated statements in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, and certified by a Responsible Officer as fairly presenting in all material respects, in accordance with GAAP (subject to the absence of footnotes and year-end audit adjustments), the financial position and the results of operations of the Company and the Subsidiaries; (c) as soon as available but not later than 75 days (or, in the case of the Annual Statement prepared on a combined basis, 90 days) after the close of each Fiscal Year of each Insurance Subsidiary, copies of the unaudited Annual Statement of such Insurance Subsidiary on a stand-alone basis and on a combined basis for all Insurance Subsidiaries, the stand-alone Annual Statement to be certified by a Responsible Officer of such Insurance Subsidiary, all such statements to be prepared in accordance with SAP consistently applied throughout the periods reflected therein and, if required by the applicable Governmental Authority, audited and certified by independent certified public accountants of recognized national standing (such audited Annual Statement to be delivered as soon as available but not later than June 15 of each Fiscal Year of such Insurance Subsidiary); (d) as soon as available but not later than 60 days (or, in the case of the Quarterly Statement prepared on a combined basis, 75 days) after the close of each of the first three Fiscal Quarters of each Fiscal Year of each Insurance Subsidiary, copies of the Quarterly Statement of such Insurance Subsidiary on a stand-alone basis and on a combined basis for all Insurance Subsidiaries, the stand-alone Quarterly Statement to be certified by a Responsible Officer of such Insurance Subsidiary, all such statements to be prepared in accordance with SAP consistently applied through the period reflected therein; (e) promptly following the delivery to or receipt by the Company or any of its Subsidiaries of any regular or periodic final Triennial Examination Reports, risk adjusted capital reports or results of any market conduct examination or examination by any Department or the NAIC of the financial condition and operations of, or any notice of any assertion as to violation of any Requirement of Law by, any Insurance Subsidiary, or any report with respect to any Insurance Subsidiary (including any summary report from the NAIC with respect to the performance of such Insurance Subsidiary as measured against the ratios and other financial measurements developed by the NAIC under its Insurance Regulatory Information System as in effect from time to time that could reasonably be expected to result in a Material Adverse Effect); (f) within 90 days after the close of each Fiscal Year of each Insurance Subsidiary, a copy of the "Statement of Actuarial Opinion" and "Management Discussion and Analysis" for each such Insurance Subsidiary that is provided to the applicable Department (or equivalent information should such Department no longer require such a statement) as to the adequacy of reserves of such Insurance Subsidiary, such opinion to be in the format prescribed by the insurance code of the state of domicile of such Insurance Subsidiary. Section 6.02. Certificates; Other Information. The Company shall furnish to the Agent, with sufficient copies for each Lender (other than in the case of Section 6.02(l)): 54 (a) concurrently with the delivery of the financial statements referred to in Section 6.01(a) and Section 6.01(b), a Compliance Certificate executed by a Responsible Officer; (b) concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of the accounting firm that reported on such financial statements stating (i) whether during the course of their examination of such financial statements they obtained knowledge of any Default relating to accounting matters (which certificate may be limited to the extent required by auditing rules or guidelines), (ii) if a Default relating to accounting matters has come to their attention, specifying the nature and period of existence thereof and (iii) stating whether or not, based on their audit examination, anything has come to their attention that causes them to believe that the matters set forth in Schedule 3 to the Compliance Certificate delivered pursuant to Section 6.02(a) for the applicable Fiscal Year to the extent such matters relate to accounting are not stated in accordance with the terms of this Agreement; (c) promptly upon receipt thereof, copies of all final reports submitted to the Company by independent public accountants in connection with each annual, interim or special audit of the financial statements of the Company made by such accountants, including the comment letter submitted by such accountants to management in connection with their annual audit; (d) promptly, copies of all Forms 10-K and 10-Q that the Company or any Subsidiary may file with the SEC, all financial statements and reports that the Company sends to its shareholders and copies of all other financial statements and regular, periodic or special reports (including Form 8-K) that the Company or any Subsidiary may make to, or file with, the SEC; (e) promptly and in any event within three Business Days after learning thereof, notification of any changes after the date hereof in the rating given by S&P or Moody's in respect of the Company's senior secured Indebtedness or by A.M. Best in respect of any Insurance Subsidiary; (f) concurrently with the occurrence of any event described in Section 2.08(b)(i) through Section 2.08(b)(iv), (i) a description of such event and (ii) a calculation of the Net Proceeds (including an accounting of the items deducted from the cash or cash equivalents received in connection with such event); (g) at least 5 days before the beginning of each Fiscal Year, a detailed consolidated budget for the next Fiscal Year (including statements of projected operations and cash flows for such period and setting forth the assumptions used in preparing such budget) and, promptly when available, any significant revisions of such budget; (h) to the extent not otherwise provided under Section 6.01 or Section 6.02, promptly upon receipt thereof, or delivery thereof by the Company or any Insurance Subsidiary, as applicable, a copy of any written communication setting forth or relating to any matter that could reasonably be expected to have a Material Adverse Effect, delivered to or received from any applicable Department or any other applicable insurance regulatory authority; (i) to the extent not otherwise provided under Section 6.01 or Section 6.02, promptly upon receipt thereof, or delivery thereof by the Company or any Subsidiary, as applicable, a copy 55 of any written communication addressed to the Company or any of its Subsidiaries setting forth or relating to the Company's and its Subsidiaries' operations that may reasonably be expected to be materially adverse to the interests of the Company, such Subsidiary or the Lenders delivered to or received from S&P, Moody's or A.M. Best or any other rating agency; (j) as soon as available but not later than five Business Days after receipt, execution or delivery of any Reinsurance Agreement (other than any Reinsurance Agreement entered into in the ordinary course of business for the purpose of managing insurance risk consistent with industry practice), including any proposal, binder, cover note or line slip (where the Person to be reinsured or reinsured is an Insurance Subsidiary), (i) a written notice specifying each Person party to such agreement, (ii) for each such Person, its most recently published rating, if any, (iii) the subject matter of each such agreement and (iv) if requested by the Agent or any Lender, attaching thereto, a true and complete copy of such agreement; (k) promptly after receipt of any notice of termination, cancellation (which cancellation notice is not accompanied by a corresponding request for renewal), commutation or recapture of any Reinsurance Agreement (other than any Reinsurance Agreement that was entered into in the ordinary course of business for the purpose of managing insurance risk consistent with industry practice) where the Person reinsured is an Insurance Subsidiary, a copy thereof; and (l) promptly, such additional information regarding the business, financial or corporate affairs of the Company or any Subsidiary, or compliance with the terms of any Loan Document, as the Agent, for itself or at the request of any Lender, may from time to time reasonably request. Documents required to be delivered pursuant to Section 6.01, Section 6.02(d) or Section 6.02(f) (to the extent any such documents are included in materials otherwise filed with the SEC, the NAIC or any other Governmental Authority) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company posts such documents or provides a link thereto on the Company's website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Company's behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent); provided that: (i) the Company shall deliver paper copies of such documents to the Agent or any Lender that requests the Company to deliver such paper copies until a written request to cease delivering paper copies is given by the Agent or such Lender and (ii) the Company shall notify (which may be by facsimile or electronic mail) the Agent and each Lender of the posting of any such documents and provide to the Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Except for such Compliance Certificates, the Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents. The Company hereby acknowledges that (a) the Agent will make available information and projections (collectively, "Company Materials") to the Lenders by posting the Company 56 Materials on IntraLinks or another similar secure electronic system (the "Platform") and (b) certain of the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Company or its securities) (each, a "Public Lender"). The Company hereby agrees that (w) it will use commercially reasonable efforts to identify that portion of the Company Materials that may be distributed to the Public Lenders and that all such Company Materials shall be clearly and conspicuously marked "PUBLIC," which, at a minimum, shall mean that the word "PUBLIC" shall appear prominently on the first page thereof; (x) by marking Company Materials "PUBLIC," the Company shall be deemed to have authorized the Agent and the Lenders to treat such Company Materials as not containing any material non-public information with respect to the Company or its securities for purposes of United States federal and state securities laws, it being understood that such Company Materials are subject to Section 10.08; (y) all Company Materials marked "PUBLIC" are permitted to be made available through a portion of the Platform designated "Public Investor;" and (z) the Agent shall be entitled to treat any Company Materials that are not marked "PUBLIC" as being suitable only for posting on a portion of the Platform not designated "Public Investor." Section 6.03. Notices. The Company shall promptly notify the Agent: (a) of the occurrence of any Default; (b) of any matter that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect, including any of the following that could reasonably be expected to have a Material Adverse Effect: (i) any breach or non-performance of, or any default under, a Contractual Obligation of the Company or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Company or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation (including any governmental proceeding or arbitration proceeding), tax audit or investigative proceeding, claim, lawsuit, and/or investigation against or involving the Company or any of its Subsidiaries or any of its or their businesses or operations, including pursuant to any applicable Environmental Laws; (c) of the filing or commencement of, or the occurrence of any development in, any litigation or proceeding that seeks to enjoin, prohibit, discontinue or otherwise impacts (i) the validity or enforceability of this Agreement or any of the other Loan Documents or (ii) the transactions contemplated hereby or thereby and, in the case of clause (ii), that could reasonably be expected to have a Material Adverse Effect; (d) of the occurrence of any of the following events affecting the Company or any ERISA Affiliate (but in no event more than 10 days after such event) and deliver to the Agent and each Lender a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Company or any ERISA Affiliate with respect to such event: (i) an ERISA Event; or (ii) a material increase in the Unfunded Pension Liabilities of any Pension Plan; 57 (iii) the adoption of or the commencement of contributions to any Plan subject to Section 412 of the Code by the Company or any ERISA Affiliate; or (iv) the adoption of any amendment to a Plan subject to Section 412 of the Code, if such amendment results in a material increase in contributions or Unfunded Pension Liability; provided that no such notice will be required under this Section 6.03(d) with respect to the occurrence of any such event if such occurrence does not result in, and is not reasonably expected to result in, any liability to the Company or any ERISA Affiliate of more than $30,000,000 in the aggregate; (e) of any material change in accounting policies or financial reporting practices by the Company or any of its Subsidiaries; (f) of the receipt of any notice from any Governmental Authority of the expiration without renewal, revocation, suspension or restriction of, or the institution of any proceedings to revoke, suspend or restrict, any License now or hereafter held by any Insurance Subsidiary that is required to conduct insurance business in compliance with all applicable laws and regulations; provided that the Company shall be required to deliver a notice under this paragraph (f) only if such event, together with all other such events, could reasonably be expected to have a Material Adverse Effect; (g) of the receipt of any notice from any Governmental Authority of the institution of any disciplinary proceedings against or in respect of any Insurance Subsidiary, or the issuance of any order, the taking of any action or any request for an extraordinary audit for cause by any Governmental Authority; provided that the Company shall be required to deliver a notice under this paragraph (g) only if such event, together with all other such events, could reasonably be expected to have a Material Adverse Effect; or (h) of any judicial or administrative order limiting or controlling the insurance business of any Insurance Subsidiary (and not the insurance industry generally) that has been issued or adopted; provided that the Company shall be required to deliver a notice under this paragraph (h) only if such event, together with all other such events, has had or could reasonably be expected to have a Material Adverse Effect. Each notice under this Section shall be accompanied by a written statement by a Responsible Officer setting forth details of the occurrence referred to therein, and stating what action the Company or any affected Subsidiary proposes to take with respect thereto and at what time. Each notice under Section 6.03(a) shall describe with particularity any and all clauses or provisions of this Agreement or other Loan Document that have been (or reasonably foreseeably will be) breached or violated. Section 6.04. Preservation of Corporate Existence, Etc. The Company shall, and shall cause each Subsidiary (other than any Immaterial Subsidiary) to (except as permitted by Section 7.03 or Section 7.07): 58 (a) preserve and maintain in full force and effect its existence and good standing under the laws of its state or jurisdiction of incorporation or organization, as applicable; (b) preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business, except where such failure to preserve and maintain could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (c) use reasonable efforts, in the ordinary course of business, to preserve its business organization and goodwill. Section 6.05. Insurance. The Company shall, and shall cause each Subsidiary to, maintain with financially sound and reputable independent insurers insurance against losses or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons. Section 6.06. Payment of Obligations. The Company shall, and shall cause each Subsidiary to, pay and discharge as the same shall become due and payable, all of the following: all material Tax liabilities imposed upon it or its material properties or assets, unless the same (a) are not overdue for a period of more than 90 days or (b) are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary and such contest effectively suspends collection of the same and the enforcement of any Lien securing the same. Section 6.07. Compliance with Laws. The Company shall, and shall cause each Subsidiary to, comply with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business (including the Federal Fair Labor Standards Act, the Patriot Act and all applicable Environmental Laws), except (i) for such noncompliance that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) as may be contested in good faith and by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP. Section 6.08. Compliance with ERISA. The Company shall, and shall cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law; (b) cause each Plan that is qualified under Section 401(a) of the Code to maintain such qualification, and (c) make all required contributions to any Plan subject to Section 412 of the Code, except where such failure to maintain as set forth in (a) or (b) or to make contributions as set forth in (c) could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect. Section 6.09. Inspection of Property and Books and Records; Expense Reimbursement. The Company shall, and shall cause each Subsidiary to, maintain proper books of record and account, in which full, true and correct entries in all material respects in conformity with GAAP or SAP, as applicable, consistently applied (except as stated therein) shall be made of all financial transactions and matters involving the assets and business of the Company and such Subsidiary. Unless an Event of Default has occurred and is continuing, not more than once per 59 fiscal year, the Company shall permit, and shall cause each Subsidiary to permit, representatives and independent contractors of the Agent or its designees to visit and inspect any of their respective properties, to examine their respective corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective directors, officers, and independent public accountants, all at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Company; provided that members of senior management will be notified and permitted to be present during any such meetings; and provided further that when an Event of Default exists the Agent or any Lender may do any of the foregoing at any time during normal business hours and without advance notice. Section 6.10. Information Regarding Collateral. The Company will furnish to the Agent prompt written notice of any change in (i) any Obligor's legal name or any Obligor's location (determined as provided in Section 9-307 of the Uniform Commercial Code), (ii) any Obligor's identity or corporate structure or (iii) any Obligor's Federal Taxpayer Identification Number or organization identification number. The Company will not effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code (which filings may be made by the Company if the Agent has failed to act after 30 days following notice of any such changes) and all other actions have been taken that are required so that such change will not at any time adversely affect the validity, perfection or priority of any Transaction Lien on any of the Collateral. Section 6.11. Casualty and Condemnation. The Company (a) will furnish to the Agent and the Lenders prompt written notice of any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any material portion of the Collateral under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with this Section and Section 2.08. Section 6.12. Additional Subsidiaries; Immaterial Subsidiaries. (a) If any additional Subsidiary is formed or acquired after the Effective Date, the Company will, within five Business Days after such Subsidiary is formed or acquired, notify the Agent and the Lenders thereof and cause any Capital Stock in or Indebtedness of such Subsidiary owned by or on behalf of any Obligor to be added to the Collateral (except that the Obligors shall not be required to pledge more than 65% of the outstanding voting Capital Stock in any Foreign Subsidiary that is not an Obligor). If such Subsidiary is or subsequently becomes a Domestic Subsidiary and is not an Insurance Subsidiary or a Subsidiary of an Insurance Subsidiary or an Immaterial Subsidiary, the Company shall promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary, whereupon such Subsidiary will become an "Obligor," a "Subsidiary Guarantor" and "Lien Grantor" for purposes of the Loan Documents. Without limiting the preceding sentence, if any Domestic Immaterial Subsidiary that is not an Insurance Subsidiary or a Subsidiary of an Insurance Subsidiary loses its status as an Immaterial Subsidiary, the Company shall promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary, whereupon such Subsidiary will become an "Obligor," a "Subsidiary Guarantor" and "Lien Grantor" for purposes of the Loan Documents. 60 (b) If at any time (i) the aggregate fair market value of the assets of all Immaterial Subsidiaries exceeds $40,000,000 or (ii) the aggregate revenues of all Immaterial Subsidiaries for the period of four consecutive Fiscal Quarters most recently ended exceeds $30,000,000, the Company shall promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to one or more of the Immaterial Subsidiaries to the extent necessary to ensure that immediately after giving effect thereto (x) the aggregate fair market value of the assets of all Immaterial Subsidiaries shall not exceed $40,000,000 and (y) the aggregate revenues of all Immaterial Subsidiaries for the period of four consecutive Fiscal Quarters most recently ended shall not exceed $30,000,000, whereupon each such Subsidiary will become an "Obligor," a "Subsidiary Guarantor" and "Lien Grantor" for purposes of the Loan Documents. Section 6.13. Further Assurances. (a) The Company will, and will cause each other Obligor to, execute and deliver any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), that may be required under any applicable law to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the Company's expense. The Company will provide to the Agent, from time to time upon request, evidence reasonably satisfactory to the Agent as to the perfection and priority of the Transaction Liens created or intended to be created by the Security Documents. (b) The Company will maintain main concentration accounts solely with depositaries that have entered into an Account Control Agreement with the Agent and the Company on the terms, and subject to the exceptions, set forth in the Security Agreement. (c) If any material assets (including any real property or improvements thereto or any interest therein) are acquired by the Company or any Subsidiary Guarantor, or cease to be subject to Liens permitted pursuant to Section 7.02 after the Effective Date (other than assets constituting Collateral that become subject to Transaction Liens upon acquisition thereof), the Company will notify the Agent and the Lenders thereof, and, if requested by the Agent or the Required Lenders, will cause such assets to be subjected to a Transaction Lien securing the Secured Obligations and will take, or cause the relevant Subsidiary Guarantor to take, such actions as may be necessary to grant and perfect or record such Transaction Lien, including actions described in Section 6.13(a), all at the Company's expense. Section 6.14. Use of Proceeds.(a) The Term Loans shall be used solely to (a) effect the Refinancing and (b) pay fees and expenses incurred in connection with the Refinancing. (b) Any Revolving Credit Loans shall be used solely for general corporate purposes of the Company and its Subsidiaries. Section 6.15. Insurance Subsidiary Compliance Certificates. Within 30 days of the date hereof, the Company shall deliver a compliance certificate for each of Conseco Health Insurance Company, Conseco Life Insurance Company and Conseco Life Insurance Company of Texas from the Department of Insurance of each such Insurance Subsidiary's jurisdiction of domicile as of a recent date. 61 ARTICLE 7 NEGATIVE COVENANTS Until all principal of and interest on each Loan and all fees and other amounts payable hereunder have been paid in full (other than contingent indemnification obligations not yet due and payable), the Company covenants and agrees with the Lenders that: Section 7.01. Limitation on Indebtedness; Certain Capital Stock. (a) The Company shall not, and shall not permit any of its Subsidiaries to, incur or at any time be liable with respect to any Indebtedness, except: (i) Indebtedness under the Loan Documents; (ii) any Surplus Debentures issued by any Insurance Subsidiary to the Company or any of its Subsidiaries that remain outstanding on the Effective Date, and extensions, renewals or replacements thereof; (iii) Permitted Refinancing Indebtedness; (iv) Permitted Transactions entered into by Insurance Subsidiaries; (v) Permitted Swap Obligations; (vi) Indebtedness existing on the date hereof and listed in Schedule 7.01, and extensions, renewals or replacements thereof, provided that no such extension, renewal or replacement shall increase the principal amount thereof, except to the extent the increase would otherwise be permitted under this Section, or result in an earlier maturity date or decreased average weighted life; (vii) non-recourse Indebtedness of Insurance Subsidiaries incurred in the ordinary course of business resulting from the sale or securitization of non-admitted assets, policy loans, CBOs and CMOs; (viii) (A) Capitalized Lease Liabilities and Purchase Money Debt in an aggregate principal amount not to exceed $40,000,000 at any time outstanding and (B) Capitalized Lease Liabilities arising from the sale and leaseback of the Company's headquarters pursuant to Section 7.03(m); (ix) intercompany Indebtedness (including Surplus Debentures) among the Company and its Subsidiaries (other than Excluded Subsidiaries) and among the Subsidiaries (other than Excluded Subsidiaries); (x) intercompany Indebtedness of Excluded Subsidiaries in an aggregate principal amount not to exceed $30,000,000 at any time outstanding; (xi) Indebtedness in respect of letters of credit issued in connection with reinsurance transactions entered into in the ordinary course of business; 62 (xii) Indebtedness in respect of surety and other similar bonds in the ordinary course of business and consistent with past practice; (xiii) other secured Indebtedness in an aggregate principal amount not to exceed $75,000,000 at any time outstanding; (xiv) other unsecured Indebtedness; provided that, to the extent the aggregate principal amount of any such Indebtedness exceeds $100,000,000, such Indebtedness shall (i) have a maturity date that is at least one year following the later of (A) the Maturity Date and (B) the Termination Date, and (ii) contain covenants and events of default that are no more restrictive, taken as a whole, to the Borrower than the Loan Documents, and the Company shall be required to prepay the Loans in accordance with Section 2.08 with the net proceeds thereof. (xv) Contingent Obligations in respect of Indebtedness permitted under Section 7.01(a)(vi), Section 7.01(a)(viii), Section 7.01(a)(xiii) or Section 7.01(a)(xiv); (xvi) Indebtedness consisting of the deferred purchase price of equity interests (or option or warrants or similar instruments) of departing officers, directors and employees of any Obligor or any Subsidiary issued (whether in the form of notes or otherwise) for the purchase or redemption thereof pursuant to the terms of an existing compensation plan or employment contract; and (xvii) Indebtedness in respect of netting services, overdraft protections and similar arrangements entered into in respect of deposit accounts, in each case in the ordinary course of business consistent with the Company's past practices. (xviii) unsecured convertible notes issued by the Company on the Effective Date ("Permitted Convertible Indebtedness") having terms (including, without limitation, terms relating to interest rates, fees, amortization, maturity, redemption, conversion, put rights, events of default, remedies) reasonably acceptable to the Agent, including, without limitation: (A) the Initial Redemption Date shall occur no earlier than the fifth anniversary of the Effective Date; and (B) the repayment of the principal amount of any conversion of notes prior the Initial Redemption Date shall be made solely in additional debt securities (on terms reasonably acceptable to the Agent) unless, in each case after giving effect to such payment, (1) the Company has Sufficient Liquidity (as defined below), (2) the Company is in pro forma compliance with Sections 7.11, 7.12, 7.14 and 7.15 of this Agreement and (3) no Default or Event of Default shall have occurred and be continuing. "Sufficient Liquidity" means cash and Cash Equivalents (including, without limitation, availability under the Revolving Credit Facility) in an aggregate amount equal to 105% of the sum of (A) any settlement amounts, where settlement amounts means, (1) for any conversion notices delivered prior to the date that is one year prior to the Maturity Date, the principal amount of bonds surrendered for conversion, and (2) for any notices delivered 63 thereafter, the principal amount initially issued under the Permitted Convertible Indebtedness less any principal amount of bonds that have been previously converted, (B) succeeding twelve months of regularly scheduled interest payments with respect to the Permitted Convertible Indebtedness, (C) succeeding twelve months of regularly scheduled principal and interest payments under this Agreement, (D) succeeding twelve months of scheduled preferred dividend payments (to the extent permitted under the terms of this Agreement) and (E) estimated twelve months of holding company expenses paid in cash (net of amounts reimbursed by its Subsidiaries). (b) The Company shall not permit any of its Subsidiaries to issue any Capital Stock other than to the Company or another Subsidiary. The Company shall not issue any preferred stock other than Permitted Preferred Stock and Permitted Refinancing Preferred Stock. (c) The Company shall not at any time permit any Person, other than an Insurance Subsidiary, to own any CDOC Preferred Stock. Section 7.02. Liens. The Company shall not, and shall not permit any of its Subsidiaries to, create, assume or suffer to exist any Lien on any property now owned or hereafter acquired by it, except for the following: (a) Transaction Liens; (b) Liens in connection with Permitted Transactions; (c) cash collateral securing Permitted Swap Obligations in an aggregate amount not to exceed, at any time, $35,000,000; (d) Liens for Taxes that are not overdue for more than 90 days or for Taxes being contested in good faith and by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP; (e) Liens existing on the date hereof and listed in Schedule 7.02, including extensions, renewals and replacements of such Liens; provided that (i) such Lien shall not apply to any additional property (other than after acquired title in or on such property and proceeds of the existing collateral in accordance with the document creating such Lien) and (ii) the Indebtedness secured thereby is not increased except as otherwise permitted under Section 7.01 (in which case the portion representing any additional increase must be permitted by another paragraph of this Section 7.02); (f) (i) Liens incurred in the ordinary course of business in connection with worker's compensation, unemployment insurance or other forms of governmental insurance or benefits or to secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety or appeal bonds and (ii) cash collateral securing letters of credit issued in respect of obligations to insurers in an aggregate amount not to exceed $15,000,000 at any time outstanding; 64 (g) (i) Liens of attorneys retained by the Company on a contingency fee basis and (ii) Liens of mechanics, carriers, and materialmen and other like Liens imposed by law and arising in the ordinary course of business in respect of obligations that in the case of clause (ii) hereof are not overdue for more than 60 days or that are being contested in good faith and by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP; (h) Liens arising in the ordinary course of business for sums being contested in good faith and by appropriate proceedings and with respect to which adequate reserves are being maintained in accordance with GAAP, or for sums not due, and in either case not involving any deposits or advances for borrowed money or the deferred purchase price of property or services; (i) Liens securing Indebtedness permitted by Section 7.01(a)(viii); provided that such Liens are limited to the assets subject to the relevant capital lease or purchase money transaction; (j) easements, rights-of-way, zoning restrictions, restrictions and other similar encumbrances incurred in the ordinary course of business that do not secure any monetary obligation and which do not materially interfere with the ordinary course of business of the Company and its Subsidiaries; (k) Liens on property of the Company and its Subsidiaries in favor of landlords securing licenses, subleases or leases of property not otherwise prohibited hereunder; (l) licenses, leases or subleases permitted hereunder granted to others not materially interfering in any material respect in the business of the Company and its Subsidiaries; (m) attachment or judgment Liens not constituting an Event of Default under Section 8.01(i); (n) Liens arising from precautionary Uniform Commercial Code financing statement filings with respect to operating leases or consignment arrangements entered into by the Company and its Subsidiaries in the ordinary course of business; (o) customary set-off rights in favor of depositary banks; (p) other Liens securing Indebtedness or other obligations in an aggregate amount not exceeding $75,000,000 at any time outstanding; (q) any Lien on any asset of any Person existing at the time such Person becomes a Subsidiary of the Company, is merged or consolidated with or into the Company or a Subsidiary of the Company, or prior to the Acquisition thereof by the Company or a Subsidiary of the Company, and not created in contemplation of such event; and (r) Liens attaching solely to cash earnest money deposits required to be made under the terms of any letter of intent or purchase agreement for a permitted Acquisition. Section 7.03. Disposition of Assets. The Company shall not, and shall not permit any of its Subsidiaries to, sell, assign, lease, transfer or otherwise Dispose of (whether in one or a series 65 of transactions) any property (including accounts and notes receivable with or without recourse and Capital Stock of any Subsidiary whether newly issued or otherwise) or enter into any agreement to do any of the foregoing, except: (a) Dispositions of inventory, equipment and Cash Equivalents, all in the ordinary course of business consistent with past practices; (b) the sale of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment or the proceeds of such sale are reasonably promptly applied to the purchase price of such replacement equipment; (c) Dispositions of Investments by any Insurance Subsidiary (other than any of its Investments in Subsidiaries engaged in insurance lines of business) in the ordinary course of business consistent with past practices and the investment policy approved by the board of directors of such Insurance Subsidiary; (d) intercompany Dispositions in the ordinary course of business (i) among the Company and its Subsidiaries (other than Dispositions to Excluded Subsidiaries) and among the Subsidiaries (other than Dispositions to Excluded Subsidiaries) and (ii) to Excluded Subsidiaries in an aggregate amount not to exceed $30,000,000; (e) (i) any Dispositions pursuant to a Reinsurance Agreement so long as such Disposition is entered into in the ordinary course of business for the purpose of managing insurance risk consistent with industry practice and (ii) any other Dispositions pursuant to a Reinsurance Agreement so long as the aggregate statutory profit and/or gains on insurance policy sales or other portfolio transfers resulting from all Dispositions described in this clause (ii) consummated after the Prior Effective Date do not exceed $400,000,000 in the aggregate during the term of this Agreement or $150,000,000 in any Fiscal Year; provided that (x) the Net Proceeds therefrom are, unless required to be retained by any Insurance Subsidiary pursuant to regulatory restrictions, applied to prepay the Loans as provided in Section 2.08 and (y) any Net Proceeds therefrom that are required to be retained by any Insurance Subsidiary pursuant to regulatory restrictions are so retained by such Insurance Subsidiary; (f) obsolete or worn out property disposed of by the Company or any of its Subsidiaries in the ordinary course of business and consistent with past practices of the Company and its Subsidiaries; (g) transfers resulting from any casualty or condemnation of property or assets; (h) licenses or sublicenses of intellectual property and general intangibles and licenses, leases or subleases of other property in the ordinary course of business and consistent with the past practices of the Company and its Subsidiaries and which do not materially interfere with the business of the Company and its Subsidiaries; (i) Dispositions consisting of intercompany mergers and consolidations among the Company and its Subsidiaries, or of any liquidation, winding up or dissolution of any Immaterial Subsidiary, in each case to the extent permitted by Section 7.07(b); 66 (j) Dispositions of shares of Capital Stock in order to qualify members of the board of directors or equivalent governing body of an Obligor or such other nominal shares required to be held other than by the Company or such Obligor, as required by applicable law; (k) the sale, discount, forgiveness or other compromise of notes or other accounts in the ordinary course of business or in connection with collection thereof; (l) issuances of Capital Stock by the Company; (m) the sale and leaseback of the Company's headquarters located in Carmel, Indiana, on fair and reasonable terms (as certified to the Agent in writing by a Responsible Officer of the Company); (n) Dispositions not otherwise permitted hereunder (other than pursuant to Reinsurance Agreements, which shall be subject to the limitations in clause (e) above); provided that (w) such Dispositions shall be for fair market value (which determination must be supported by a fairness opinion in form and substance reasonably satisfactory to the Agent from a nationally-recognized investment banking firm in connection with any Disposition or series of Dispositions the aggregate consideration for which exceeds $125,000,000; provided that no fairness opinion is required in respect of any Disposition or series of Dispositions made at any time when (i) the Debt to Total Capitalization Ratio is equal to or less than 20% and (ii) the Financial Strength Rating Condition is satisfied) and at least 75% of the consideration received in connection therewith at closing shall consist of cash, (x) on a Pro Forma Basis after giving effect to such Disposition, the Company and its Subsidiaries would be in compliance with all of the covenants contained in the Loan Documents (including all financial and ratings covenants), (y) no such Disposition shall include the sale of any capital stock of any Subsidiary unless 100% of the capital stock of such Subsidiary owned by the Obligors is sold and (z) the Net Proceeds thereof shall be applied to prepay the Loans in accordance with Section 2.08; and (o) the dissolution, liquidation or winding up of immaterial Subsidiaries, so long as the assets of such Subsidiaries are distributed to the Company or its Subsidiaries. Upon consummation of a sale, transfer or other Disposition permitted under this Section 7.03, liens created under the Security Documents in respect of the assets Disposed of shall be automatically released and the Agent shall (to the extent applicable) deliver to the Company, upon the Company's request and at the Company's expense, such documentation as necessary to evidence the release of the Agent's security interests, if any, in the assets being Disposed of, including amendments or terminations of Uniform Commercial Code financing statements, if any, the return of stock certificates, if any, and the release of any Subsidiary being Disposed of in its entirety from all of its obligations, if any, under the Loan Documents. Section 7.04. Other Agreements. The Company shall not, and shall not permit any of its Subsidiaries to, enter into any agreement (other than any agreement with any Department to the extent required by such Department) containing any provision that (a) would be violated or breached in any material respect by the performance of its obligations hereunder or under any other Loan Document or under any instrument or document delivered or to be delivered by it hereunder or thereunder in connection herewith or therewith or (b) prohibits or restricts the 67 ability of the Company or such Subsidiary to amend or otherwise modify this Agreement, any other Loan Document or any other document executed in connection herewith or therewith, and such breach, violation, prohibition or restriction, individually or in the aggregate, could reasonably be expected to adversely affect the rights and remedies of the Agent and the Lenders under the Loan Documents. Section 7.05. Transactions with Affiliates. The Company shall not, and shall not suffer or permit any Subsidiary to, enter into any transaction with any Affiliate of the Company, except (a) upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtained in a comparable arm's-length transaction with a Person not an Affiliate of the Company or such Subsidiary and that, (b) for insurance transactions, intercompany pooling and other reinsurance transactions entered into in the ordinary course of business and consistent with past practice, (c) intercompany transactions in the ordinary course and consistent with past practices between or among the Company and its Subsidiaries (other than Excluded Subsidiaries) and between or among Subsidiaries (other than Excluded Subsidiaries), (d) any Restricted Payment permitted by Section 7.08 and (e) arrangements for indemnification payments for directors and officers of the Company and its Subsidiaries. Section 7.06. Change in Business. The Company shall not, and shall not suffer or permit any Subsidiary (other than any Immaterial Subsidiary) to, fundamentally change the type of business in which it is engaged as of the Effective Date; provided that any Subsidiary may cease to engage in any type of business in which such Subsidiary is engaged as of the Effective Date if the board of directors of the Company or such Subsidiary shall determine that ceasing to engage in such type of business is in the best interests of the Company and its Subsidiaries, taken as a whole, or such Subsidiary. Section 7.07. Fundamental Changes. Unless the Obligations shall be paid in full concurrently therewith, the Company shall not, and shall not suffer or permit any of its Subsidiaries to, enter into any merger, consolidation, amalgamation, or sale of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), except (a) in connection with a Disposition of a Subsidiary otherwise permitted by Section 7.03) and (b) if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, (i) any Subsidiary Guarantor (other than CDOC) may merge, consolidate or amalgamate into the Company in a transaction in which the Company is the surviving corporation, (ii) any Subsidiary Guarantor may merge, consolidate or amalgamate into any Subsidiary in a transaction in which the surviving entity is a Subsidiary Guarantor (and if CDOC is a party to such transaction, CDOC is the surviving entity), (iii) any two Subsidiaries that are not Subsidiary Guarantors may merge, consolidate or amalgamate; provided that if either such Subsidiary is a direct Subsidiary of an Obligor, the surviving entity shall be a direct Subsidiary of an Obligor. Section 7.08. Restricted Payments. The Company shall not, and shall not suffer or permit any Subsidiary to, declare or pay any dividend on (or make any payment to a related trust for the purpose of paying a dividend), or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of the Company or such Subsidiary (or any related trust), 68 whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Company or such Subsidiary (collectively, "Restricted Payments"), except that: (a) (i) any Subsidiary may declare or pay dividends with respect to its Capital Stock to the Company and to any Wholly-Owned Subsidiary (and in the case of a non-Wholly-Owned Subsidiary, to the Company and any Subsidiary and to each other owner of Capital Stock or other equity interests of such Subsidiary on a pro rata basis based on their relative ownership interests) and (ii) the Company may from time to time redeem the CDOC Preferred Stock; (b) the Company may pay dividends solely in the form of shares of common stock or additional shares of Permitted Preferred Stock to the holders of the Permitted Preferred Stock; (c) the Company may pay dividends solely in the form of shares of common stock or additional shares of Permitted Refinancing Preferred Stock to the holders of the Permitted Refinancing Preferred Stock; (d) so long as no Event of Default is continuing (both before and immediately after giving effect to the payment thereto), the Company may pay cash dividends on the Permitted Refinancing Preferred Stock to the extent the terms thereof (as in effect on the date of initial issuance) require cash dividend payments; (e) the Company may pay dividends to the holders of Class B Preferred Stock on the terms in effect on the Effective Date; (f) the Company may purchase shares of common stock held by employees of the Company pursuant to the Company's 2003 Long-Term Equity Incentive Plan, as in effect on the Effective Date to allow employees to meet their tax obligations (with such amendments or modifications as may be reasonably acceptable to the Agent); (g) the Company may make Restricted Payments in any Fiscal Year, in each case so long as no amount is outstanding under the Revolving Credit Facility immediately after giving effect to any such Restricted Payment, of up to an aggregate amount equal to the sum of (i) $50,000,000 (less any amount thereof paid in any prior Fiscal Year) and (ii) 25% of Conseco Excess Cash Flow from the prior Fiscal Year, so long as, solely with respect to this clause (ii), (w) no Event of Default has occurred and is continuing, or will result therefrom, (x) the Debt to Total Capitalization Ratio is equal to or less than 20% (after giving effect to any such Restricted Payment), (y) the Financial Strength Rating Condition is satisfied and (z) each of the Facilities has a senior secured debt rating of not less than Ba3 from Moody's and BB- from S&P, in each case at the time any such Restricted Payment is made; and (h) the Company may repurchase Capital Stock converted from Permitted Convertible Indebtedness so long as (i) no Event of Default has occurred and is continuing or will result therefrom, (ii) the Debt to Total Capitalization Ratio is equal to or less than 20%, (iii) the Financial Strength Rating Condition is satisfied and (iv) each of the Facilities has a senior secured debt rating of not less than Ba3 from Moody's and BB- from S&P, in each case at the time any such repurchase is made. 69 Section 7.09. Investments and Acquisitions. The Company shall not, and shall not suffer or permit any Subsidiary to, directly or indirectly, make any Acquisition or hold or make any other Investment in any Person, except: (a) Investments in existence on the Effective Date and commitments to make Investments existing on the Effective Date and listed on Schedule 7.09; (b) Investments consisting of non-cash consideration received in connection with a permitted asset sale; (c) Investments received in connection with the bankruptcy or reorganization of customers and suppliers in the ordinary course of business; (d) Investments consisting of Contingent Obligations permitted by Section 7.01 of Indebtedness permitted by Section 7.01; (e) Investments in Cash Equivalents; (f) Investments by any Insurance Subsidiary (including by any Subsidiary of such Insurance Subsidiary that is not itself an Insurance Subsidiary) in the ordinary course of business in compliance with Section 7.16 and consistent with the investment policy approved by the board of directors of such Insurance Subsidiary; (g) intercompany Investments other than in Excluded Subsidiaries in the ordinary course of business; (h) intercompany Investments in Excluded Subsidiaries in the ordinary course of business in an aggregate amount expended not to exceed $30,000,000; (i) security deposits or pledges held or made in the ordinary course of business; (j) loans and advances in the ordinary course of business to employees for moving, relocation or travel purposes, in each case subject to compliance with the Requirements of Law; (k) Permitted Swap Obligations; (l) (i) Acquisitions (other than Acquisitions that constitute Investments permitted by Section 7.09(f) above or Section 7.09(m) below), for aggregate consideration in an amount not to exceed $100,000,000 in any Fiscal Year or $300,000,000 during the term of this Agreement, which consideration will include all cash expended and the value of any Capital Stock of the Company (other than Capital Stock prohibited under Section 7.01(b) and not permitted to be used for such purpose) used to consummate such Acquisition; provided that at the time of such Acquisition no Event of Default shall be continuing and immediately after giving effect to such Acquisition no Default (including any failure to be in compliance with the financial covenants calculated on a Pro Forma Basis) would occur; and (ii) in the event (x) the Debt to Total Capitalization Ratio is equal to or less than 20% (calculated on a Pro Forma Basis), (y) the Financial Strength Rating Condition is satisfied (calculated on a Pro Forma Basis) and (z) the consideration for such Acquisitions consists solely of such Capital Stock, the limits referred to 70 above shall be increased to $250,000,000 in any Fiscal Year and $500,000,000 during the term of this Agreement; and (m) Investments not otherwise permitted hereby in an aggregate amount expended not to exceed $50,000,000 in any Fiscal Year. Section 7.10. Prepayments of Indebtedness; Modifications of Certain Agreements; Synthetic Purchase Agreements. (a) The Company shall not, and shall not permit any of its Subsidiaries to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property, and including optional prepayments and open market purchases) of or in respect of principal of or interest on any Permitted Refinancing Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, defeasance or termination of any Permitted Refinancing Indebtedness, other than payment of regularly scheduled interest and principal payments as and when due in respect thereof, except payments in respect thereof prohibited by the subordination provisions thereof. (b) The Company shall not, and shall not permit any of its Subsidiaries to, amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the material terms of any Indebtedness of the Company or any of its Subsidiaries specified on Schedule 7.10 hereto or any Permitted Refinancing Indebtedness (other than any such amendment, modification, waiver or other change that (i) would extend the maturity or reduce the amount of any payment of principal thereof or reduce the rate or extend any date for payment of interest thereon and (ii) does not involve the payment of a consent fee that is not customary under the circumstances). (c) The Company shall not, and shall not permit any of its Subsidiaries to, amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the material terms of any preferred stock issued by the Company or any of its Subsidiaries (including the Class B Preferred Stock, Permitted Preferred Stock and the Permitted Refinancing Preferred Stock) or any related trust in a manner that adversely affects the interests of the Lenders, it being understood that the following shall be permitted: any such amendment, modification, waiver or other change that (i) would extend the scheduled redemption date or reduce the amount of any scheduled redemption payment or reduce the rate or extend any date for payment of dividends thereon and (ii) does not involve the payment of a consent fee that is not customary under the circumstances. (d) The Company shall not, and shall not permit any of its Subsidiaries to, amend or modify its respective Organization Documents, other than any amendments or modifications that do not, individually or in the aggregate, adversely affect the interests of the Lenders. (e) The Company shall not, and shall not permit any of its Subsidiaries to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement. Section 7.11. Debt to Total Capitalization Ratio. The Company shall maintain at all times a Debt to Total Capitalization Ratio of not more than 25%. 71 Section 7.12. Interest Coverage Ratio. The Company shall not permit the Interest Coverage Ratio as of the end of any Fiscal Quarter ending during each period set forth below for the four Fiscal Quarters then ended (or, if less, the number of full Fiscal Quarters commencing after the Effective Date) to be less than the ratio set forth below for such Fiscal Quarter:
============================================================================ Period Ratio - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- From Effective Date through June 30, 2007 2.00 to 1 - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- From July 1, 2007 and at all times thereafter 2.50 to 1 ============================================================================
Section 7.13. [Intentionally Omitted.] Section 7.14. Aggregate RBC Ratio. The Company shall not permit the Aggregate RBC Ratio as of the end of any Fiscal Quarter ending during each period set forth below to be less than the ratio set forth below for such Fiscal Quarter:
============================================================================ Period Ratio - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- From Effective Date through March 31, 2006 245% - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- From April 1, 2006 and for each Fiscal Quarter 250% thereafter ============================================================================
Section 7.15. Combined Statutory Capital and Surplus Level. The Company shall not permit the Combined Statutory Capital and Surplus of the Insurance Subsidiaries as of the end of any Fiscal Quarter to be less than $1,270,000,000. Section 7.16. Investment Portfolio Requirement. The Company shall not permit any Insurance Subsidiary to purchase, make or otherwise acquire: (a) any Investment that is not an Investment Grade Asset, unless, after giving effect thereto, the aggregate fair market value of all Investments of the Insurance Subsidiaries that are not Investment Grade Assets (exclusive of the Investments referred to in paragraphs (b),(c), and (d) below and policy loans as specified on page 2, line 6 of the Company's Annual Statements) will not exceed 10% of the aggregate fair market value of all Investments held by the Insurance Subsidiaries; (b) any Investment that is non-NAIC rated, unless, after giving effect thereto, the aggregate fair market value of all Investments of the Insurance Subsidiaries that are non-NAIC rated (exclusive of the Investments referred to in paragraphs (a),(c) and (d) hereof and policy 72 loans as specified on page 2, line 6 of the Company's Annual Statement) will not exceed 6% of the aggregate fair market value of all Investments held by the Insurance Subsidiaries; (c) any Investment in real property mortgage loans classified on Schedule B-Part 1 of the Annual Statement, unless, after giving effect thereto, the aggregate fair market value of all Investments of the Insurance Subsidiaries in such loans (exclusive of Investments referred to in paragraphs (a), (b) and (d) hereof) will not exceed 12% of the aggregate fair market value of all Investments held by the Insurance Subsidiaries; and (d) any Investment involving Capital Stock, unless, after giving effect thereto, the aggregate fair market value of all Investments of the Insurance Subsidiaries in Capital Stock (exclusive of Investments referred to in paragraphs (a), (b) and (c) hereof) will not exceed 1% of the aggregate fair market value of all Investments held by the Insurance Subsidiaries; provided that (x) any Insurance Subsidiary shall be permitted to make any Investment that it is committed to make as of the Prior Effective Date and listed on Schedule 7.09 (it being understood, however, that each such Investment shall be taken into account for purposes of determining whether any additional Investments may be purchased, made or otherwise acquired hereunder). If one or more of the percentage thresholds referred in clauses (a), (b), (c) or (d) above is exceeded solely as a result of the making of any Investment permitted to be made pursuant to the foregoing proviso (after giving effect to any Investments made prior thereto), such event shall not constitute a Default for purposes hereof. Section 7.17. Restrictive Agreements. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition on (a) the ability of the Company or any Subsidiary to create or permit to exist any Lien on any of its property or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its Capital Stock or to make, repay or prepay loans or advances to the Company or any other Subsidiary or to Dispose of assets to the Company or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by applicable law (including pursuant to regulatory restrictions), (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof and identified on Schedule 7.17 (but shall apply to any amendment or modification expanding the scope of, or any extension or renewal of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or assets or property of the Company or any Subsidiary pending such sale, provided that such restrictions and conditions apply only to the Subsidiary or assets or property that is to be sold and such sale is permitted hereunder, (iv) the foregoing shall not apply to restrictions that are not more restrictive than those contained in this Agreement contained in any documents governing any Indebtedness incurred after the Effective Date in accordance with the provisions of this Agreement, (v) clause (a) of this Section shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness (including Capitalized Lease Liabilities and Purchase Money Debt) permitted by this Agreement if such restrictions or conditions apply only to the collateral securing such Indebtedness and (vi) clause (a) of this Section shall not apply to customary provisions in leases or licenses or other contracts and agreements restricting the assignment, subletting or sublicensing thereof. 73 Section 7.18. Holding Company Activities. The Company shall not, and shall not permit CDOC to, engage in any business or activity except owning all the outstanding shares of Capital Stock of their respective Subsidiaries and activities related or incidental thereto. The Company shall not permit CDOC to own or acquire any assets (except shares of Capital Stock of its Subsidiaries and cash and Cash Equivalents and other assets owned by it on the Effective Date) or incur any liabilities (except liabilities under the Loan Documents, liabilities imposed by law, including tax liabilities, liabilities in existence on the Effective Date and other liabilities incidental to its existence and permitted business and activities). Section 7.19. Changes in Accounting Policies; Fiscal Year. The Company shall not, and shall not permit any of its Subsidiaries to, (a) make any change to its accounting policies or reporting practices, except as required or permitted by GAAP or (b) change the last day of its fiscal year from December 31 of each year. ARTICLE 8 EVENTS OF DEFAULT Section 8.01. Events of Default. Each of the following shall constitute an "Event of Default": (a) Non Payment. The Company fails to pay (i) when and as required to be paid herein, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise, any amount of principal of any Loan, or (ii) within five days after the same becomes due, any interest, fee or any other amount payable hereunder or under any other Loan Document; or (b) Representation or Warranty. Any representation or warranty by the Company or any of its Subsidiaries made or deemed made herein or in connection with any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or contained in any certificate, document or financial or other statement by the Company, any Subsidiary or any Responsible Officer, furnished at any time in connection with this Agreement or in connection with any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, is incorrect in any material respect on or as of the date made or deemed made; or (c) Specific Defaults. The Company fails to perform or observe any term, covenant or agreement contained in any of (i) Section 6.03(a), Section 6.04(a) (with respect to the Company's corporate existence) or Article 7 (other than Section 7.16) or (ii) Section 7.16 and, in the case of clause (ii), such default shall continue unremedied for a period of 30 days (it being understood that if the Company takes any action during such 30 day period which action, if it had been taken on or prior to the relevant date on which compliance with Section 7.16, as applicable, was tested, would have resulted in the Company being in compliance with such Section on such test date, such default shall be deemed to have been remedied on the date on which such action was taken); or (d) Other Defaults. The Company or any of its Subsidiaries fails to perform or observe any other term or covenant contained in this Agreement or any other Loan Document, 74 and such default shall continue unremedied for a period of 30 days after the date upon which written notice thereof is given to the Company by the Agent or any Lender; or (e) Cross-Default. (i) The Company or any Subsidiary (A) fails to make any payment in respect of any Indebtedness or Contingent Obligation (other than in respect of Swap Contracts), having an aggregate principal amount of more than $40,000,000, when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise); or (B) fails to perform or observe any other condition or covenant, or any other event shall occur or condition exist, under any agreement or instrument relating to any such Indebtedness (and, solely in the case of a failure to comply with any financial statement or other information delivery or reporting requirement or in the case of the entry of any judgment or decree, so long as such judgment or decree constitutes a Default but not an Event of Default under Section 8.01(i), such failure or event continues after the applicable grace or notice period, if any, specified in the relevant document on the date of such failure or event) if the effect of such failure, event or condition is to cause, or to permit (or, with the giving of notice or lapse of time or both, would permit) the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, such Indebtedness to be declared to be due and payable prior to its stated maturity, or, in the case of any such Indebtedness consisting of Contingent Obligations, to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (x) any event of default under such Swap Contract as to which the Company or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (y) any Termination Event (as so defined) as to which the Company or any Subsidiary is an Affected Party (as so defined), and, in either event, the Swap Termination Value owed by the Company or such Subsidiary as a result thereof is greater than $40,000,000; or (f) Insolvency; Voluntary Proceedings. The Company or any Subsidiary (other than an Immaterial Subsidiary) (i) ceases or fails to be solvent, or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any, whether at stated maturity or otherwise; (ii) voluntarily ceases to conduct its business in the ordinary course; (iii) commences any Insolvency Proceeding with respect to itself; (iv) applies for or consents to the appointment of a receiver, trustee, custodian, conservator, liquidator, mortgagee in possession (or agent therefor), or other similar Person for itself or for a substantial part of its assets, or (v) takes any action to effectuate or authorize any of the foregoing; or (g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is commenced or filed against the Company or any Subsidiary (other than an Immaterial Subsidiary), or any writ, judgment, warrant of attachment, execution or similar process, is issued or levied against a substantial part of the Company's or any Subsidiary's (other than an Immaterial Subsidiary's) properties, and any such proceeding or petition shall not be dismissed, or such writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded within 60 days after commencement, filing or levy; (ii) the Company or any Subsidiary (other than an Immaterial Subsidiary) admits the material allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non-U.S. law) is ordered in any Insolvency Proceeding; (iii) the Company or any Subsidiary (other than an Immaterial Subsidiary) acquiesces in the appointment of a receiver, trustee, custodian, 75 conservator, liquidator, mortgagee in possession (or agent therefor), or other similar Person for itself or a substantial portion of its property or business; or (iv) any Subsidiary (other than an Immaterial Subsidiary) shall become subject to any conservation, rehabilitation or liquidation order, directive or mandate issued by any Governmental Authority; or (h) Pension Plans and Welfare Plans. With respect to any Single Employer Pension Plan as to which the Company or any other ERISA Affiliate may have any liability, there shall exist an Unfunded Pension Liability of more than $30,000,000 in the aggregate as to the Company or any ERISA Affiliate, and steps are undertaken to terminate such plan or such Pension Plan is terminated or the Company or any other ERISA Affiliate withdraws from or institutes steps to withdraw from such Pension Plan, or the Company has knowledge that steps have been taken to terminate any Multiemployer Plan and such termination may result in liability to the Company or any ERISA Affiliate in excess of $30,000,000 in the aggregate or any Reportable Event with respect to such Pension Plan has occurred that could result in the incurrence of liability by the Company or any ERISA Affiliate in excess of $30,000,000 in the aggregate or steps are taken to terminate any Multiemployer Plan and such termination may result in any liability of the Company or any ERISA Affiliate in excess of $30,000,000 in the aggregate; or (i) Material Judgments. One or more judgments or decrees shall be entered against the Company or any of its Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance as to which the relevant insurance company has not denied coverage) of $40,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof, or any action shall be taken by a judgment creditor to attach or levy upon any asset of the Company or any of its Subsidiaries to enforce any such judgment or decree; or (j) Material Regulatory Matters. At any time either (x) the Debt to Total Capitalization Ratio is greater than 20% or (y) the Financial Strength Rating Condition is not satisfied, and (i) any Insurance Subsidiary shall not make a scheduled payment of interest or principal on any surplus note or similar form of indebtedness (due to actions of any Governmental Authority or otherwise), (ii) any Insurance Subsidiary's ability to pay fees to its Affiliates under existing agreements (or extensions of existing agreements) shall be restricted (due to actions of any Governmental Authority or otherwise) or (iii) in any Fiscal Year, an Insurance Subsidiary's ability to pay dividends to its stockholders is restricted in any manner (due to actions of any Governmental Authority or otherwise), other than by restrictions relating to dividends that apply generally to other insurance companies domiciled in the Insurance Subsidiary's state of domicile under the insurance law of the state, and (x) in the cases of clauses (i) through (iii) above, such event or condition, together with all other such events or conditions, could reasonably be expected to have a Material Adverse Effect and (y) in each case, such event or condition was not in effect as of the date hereof; or (k) Change of Control. There occurs any Change of Control; or (l) Subsidiary Guarantee. Any Subsidiary Guarantor's Secured Guarantee shall cease, for any reason, to constitute a valid and binding agreement of such Subsidiary Guarantor or to be in full force and effect (other than in accordance with the terms thereof or if released by 76 the Agent at the direction of the Required Lenders) or the Company or any Subsidiary of the Company shall so assert; or (m) Liens. Any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by the Company or any Subsidiary of the Company not to be, a valid and perfected Lien on any Collateral covered thereby, with the priority required by the applicable Security Document (except as a result of a sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or as a result of the Agent's failure to maintain possession of any stock certificates, promissory notes or other documents or possessory collateral delivered to it under the Security Agreement or if released by the Agent), except to the extent that such cessation would not, together with all other such cessations, be with respect to Collateral having a fair market value in excess of $25,000,000; or (n) Subordination Provisions. Any subordination provisions applicable to any Permitted Refinancing Indebtedness shall cease to be, or shall be asserted by the Company or any Subsidiary or by holders of 25% or more of the aggregate principal amount of such Indebtedness then outstanding not to be, valid and enforceable in accordance with the terms thereof; or the Obligations shall cease to constitute "Senior Debt" (howsoever defined) for purposes of any Permitted Refinancing Indebtedness. Section 8.02. Remedies. If any Event of Default shall have occurred and be continuing, the Agent shall, at the request of, or may, with the consent of, the Required Lenders, (a) declare the obligation of each Lender to make extensions or conversions of the Loans to be terminated; (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, whereupon such Loans, all interest accrued and unpaid thereon and all other amounts owing or payable hereunder or under any other Loan Document shall become immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company; and (c) exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable law; provided that upon the occurrence of any event specified in Section 8.01(f) or Section 8.01(g) upon the expiration of the 60-day period mentioned therein, the obligation of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Company. Section 8.03. Rights Not Exclusive. The rights provided for in this Agreement and the other Loan Documents are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by law or in equity, or under any other instrument, document or agreement now existing or hereafter arising. 77 ARTICLE 9 THE AGENT Section 9.01. Appointment and Authority. Each of the Lenders hereby irrevocably appoints BofA to act on its behalf as the Agent hereunder and under the other Loan Documents and authorizes the Agent to take such actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Agent and the Lenders, and neither the Company nor any other Obligor shall have rights as a third party beneficiary of any of such provisions. Section 9.02. Rights as a Lender. The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Agent and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Company or any Subsidiary or other Affiliate thereof as if such Person were not the Agent hereunder and without any duty to account therefor to the Lenders. Section 9.03. Exculpatory Provisions. The Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Agent: (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing; (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law; and (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Affiliates that is communicated to or obtained by the Person serving as the Agent or any of its Affiliates in any capacity. The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 8.02 and 10.01) or (ii) in the absence of its own gross negligence or willful misconduct. The Agent shall be deemed not to have knowledge of any 78 Default unless and until notice describing such Default is given to the Agent by the Company or a Lender. The Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent. Section 9.04. Reliance by Agent. The Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Agent may presume that such condition is satisfactory to such Lender unless the Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. Section 9.05. Delegation of Duties. The Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Agent. The Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Agent. Section 9.06. Resignation of Agent. The Agent may at any time give notice of its resignation to the Lenders and the Company. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation, then the retiring Agent may on behalf of the Lenders, appoint a successor Agent meeting the qualifications set forth above; provided that if the Agent shall notify the Company and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the 79 retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Agent on behalf of the Lenders under any of the Loan Documents, the retiring Agent shall continue to hold such collateral security until such time as a successor Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Agent as provided for above in this Section. Upon the acceptance of a successor's appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Company to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the retiring Agent's resignation hereunder and under the other Loan Documents, the provisions of this Article and Sections 10.04 and 10.05 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Agent was acting as Agent. Section 9.07. Non-Reliance on Agent and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. Section 9.08. No Other Duties, Etc.. Anything herein to the contrary notwithstanding, none of the joint lead arrangers or joint bookrunners listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Agent or a Lender hereunder. Section 9.09. Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Obligor, the Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Agent shall have made any demand on the Company) shall be entitled and empowered, by intervention in such proceeding or otherwise (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Agent and their respective agents and counsel and all other amounts due the Lenders and the Agent under Sections 2.10, 10.04 and 10.05) allowed in such judicial proceeding; and 80 (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Agent and, in the event that the Agent shall consent to the making of such payments directly to the Lenders, to pay to the Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agent and its agents and counsel, and any other amounts due the Agent under Sections 2.10, 10.04 and 10.05. Nothing contained herein shall be deemed to authorize the Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Agent to vote in respect of the claim of any Lender in any such proceeding. Section 9.10. Collateral and Guaranty Matters The Lenders irrevocably authorize the Agent, at its option and in its discretion, (a) to release any Lien on any property granted to or held by the Agent under any Loan Document (i) upon payment in full of all Obligations (other than contingent indemnification obligations), (ii) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale permitted hereunder or under any other Loan Document or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders; (b) to subordinate any Lien on any property granted to or held by the Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.02(i); and (c) to release any Subsidiary Guarantor from its obligations under the Secured Guarantee if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by the Agent at any time, the Required Lenders will confirm in writing the Agent's authority to release or subordinate its interest in particular types or items of property, or to release any Subsidiary Guarantor from its obligations under the Secured Guarantee pursuant to this Section 9.10. Section 9.11. Indemnification of Agent. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of the Company and without limiting the obligation of the Company to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person's own gross negligence or willful misconduct; and provided further that no action taken in accordance with the directions of the Required 81 Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse the Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document or any document contemplated by or referred to herein, to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Company. The undertaking in this Section shall survive the payment of all other Obligations and the resignation of the Agent. Section 9.12. Withholding Tax. (a) If any Lender (including a Lender that becomes a party to this Agreement by assignment in accordance with Section 10.07) is not a "United Stated Person" for U.S. federal income tax purposes as defined in Section 7701(a)(30) of the Code and such Lender claims exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such Lender agrees with and in favor of the Agent and the Company to deliver to the Agent and the Company: (i) if such Lender claims an exemption from, or a reduction of, withholding tax under a United States tax treaty, two properly completed and executed copies of IRS Form W-8BEN (or any successor form) before the payment of any interest in the first calendar year and before the payment of any interest in each third succeeding calendar year during which interest may be paid under this Agreement; (ii) if such Lender claims that interest paid under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Lender, two properly completed and executed copies of IRS Form W-8ECI (or any successor form) before the payment of any interest is due in the first taxable year of such Lender and in each third succeeding taxable year of such Lender during which interest may be paid under this Agreement; and (iii) such other form or forms as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding tax. Such Lender agrees to promptly notify the Agent and the Company of any change in circumstances which would modify or render invalid any claimed exemption or reduction. (b) If any Lender claims exemption from, or reduction of, withholding tax under a United States tax treaty by providing an IRS Form W-8BEN, W-8ECI or other required form and such Lender sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of the Company to such Lender, such Lender agrees to notify the Agent and the Company of the percentage amount in which it is no longer the beneficial owner of Obligations of the Company to such Lender. To the extent of such percentage amount, the Agent and the Company will treat such Lender's IRS Form W-8BEN, W-8ECI or other required form as no longer valid. 82 (c) If any Lender claiming exemption from United States withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants a participation in or otherwise transfers all or part of the Obligations of the Company to such Lender, such Lender agrees to undertake sole responsibility for complying with the withholding tax requirements imposed by Sections 1441 and 1442 of the Code. (d) If any Lender is entitled to a reduction in the applicable withholding tax, the Company may withhold from any interest payment to such Lender (or the Agent) an amount equivalent to the applicable withholding tax after taking into account such reduction. However, if the forms or other documentation required by subsection (a) of this Section are not delivered to the Company and the Agent, or if any Lender is not entitled to submit such forms or other documentation, then the Company may withhold from any interest payment to such Lender (or the Agent) an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction. If the Company withholds tax from any interest payment, it shall deliver to the Agent on the Interest Payment Date a written notice setting forth in reasonable detail the amount of withholding made and the reason for said calculation of such amount. (e) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that the Company or the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or was not properly executed, because such Lender failed to notify the Company or the Agent of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective or for any other reason) such Lender shall indemnify the Company or the Agent, as the case may be, fully for all amounts paid, directly or indirectly, by the Company or the Agent as tax or otherwise, including penalties and interest and including any taxes imposed by any jurisdiction on the amounts payable to the Company or the Agent under this Section, together with all costs and expenses (including Attorney Costs). The obligation of the Lenders under this subsection shall survive the payment of all Obligations and the resignation or replacement of the Agent. (f) Any amounts withheld from a Lender as a result of the failure of such Lender to claim an exemption from withholding available to it or otherwise to comply with this Section 9.12 shall not be subject to indemnification under Section 3.01, Section 10.05 or otherwise. ARTICLE 10 MISCELLANEOUS Section 10.01. Amendments and Waivers. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Company or any other Obligor therefrom, shall be effective unless in writing signed by the Required Lenders and the Company or the applicable Obligor, as the case may be, and acknowledged by the Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall: 83 (a) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender; (b) postpone or delay the maturity of the Loans, or any scheduled date of payment of the principal amount of the Term Loans under Section 2.07, or any date for the payment of any interest or fees due to the Lenders (or any of them) hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, without the written consent of each Lender affected thereby; (c) change the percentage of the Commitments or of the aggregate unpaid principal amount, in each case, under a Facility, of the Loans that is required for the Lenders under such Facility or any of them to take any action hereunder without the written consent of each Lender under such Facility; (d) amend the definition of "Interest Period" under a Facility to permit Interest Periods under such Facility with a duration of longer than six months without the written consent of each Lender such Facility; (e) release all or any substantial part of the Collateral from the Transaction Liens (except as expressly permitted hereunder or in the Security Agreement) without the written consent of each Lender; (f) amend this Section 10.01 without the written consent of each Lender; (g) change (i) Section 2.13 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or (ii) the order of application of any reduction in the Revolving Credit Commitments or any prepayment of Loans among the Facilities from the application thereof set forth in the applicable provisions of Section 2.05(c) or 2.08(c), respectively, in any manner that materially and adversely affects the Lenders under a Facility without the written consent of (i) if such Facility is the Term Facility, the Required Term Lenders, (ii) if such Facility is the Revolving Credit Facility, the Required Revolving Credit Lenders; or (h) impose any greater restriction on the ability of any Lender under a Facility to assign any of its rights or obligations hereunder without the written consent of (i) if such Facility is the Term Facility, the Required Term Lenders and (ii) if such Facility is the Revolving Credit Facility, the Required Revolving Credit Lenders; and provided further that (i) no such agreement shall, unless in writing and signed by the Agent in addition to the Required Lenders or all the Lenders, as the case may be, affect the rights or duties of the Agent under this Agreement or any other Loan Document (except with respect to the removal of the Agent) and (ii) any fee agreement referred to in Section 2.10 may be amended, or rights or privileges thereunder waived, in a writing executed by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except for any amendment, waiver or consent pursuant to Section 10.01(a), (b) or (c). 84 Section 10.02. Notices. (a) Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission). All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number (provided that any matter transmitted by the Company by facsimile (1) shall be immediately confirmed by a telephone call to the recipient at the number specified on Schedule 10.02, and (2) shall be followed promptly by delivery of a hard copy original thereof) or (subject to subsection (c) below) electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows: (i) if to the Company or the Agent, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 10.02 or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and (ii) if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its administrative questionnaire or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the Company and the Agent. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when delivered; provided that notices and other communications to the Agent pursuant to Article 2 shall not be effective until actually received by such Person. In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder. (b) Loan Documents may be transmitted and/or signed by facsimile or Adobe PDF delivered by electronic mail. The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as manually-signed originals and shall be binding on all Obligors, the Agent and the Lenders. The Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature. (c) Electronic mail and Internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information as provided in Section 6.02, and to distribute Loan Documents for execution by the parties thereto and may not be used for any other purpose. (d) The Agent and the Lenders shall be entitled to rely and act upon any notices purportedly given by or on behalf of the Company even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein or (ii) the terms thereof, as understood by the recipient, varied from any 85 confirmation thereof. The Company shall indemnify each Agent-Related Person and each Lender from all losses, costs, out-of-pocket expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Company; provided that such indemnity shall not, as to any such Person, be available to the extent that such losses, costs, expenses or liabilities are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Person. All telephonic notices to and other communications with the Agent may be recorded by the Agent, and each of the parties hereto hereby consents to such recording. Section 10.03. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Agent or any Lender, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. Section 10.04. Costs and Expenses. The Company agrees (a) to pay or reimburse the Agent for all reasonable costs and out-of-pocket expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Loan Documents and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated) and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or reimburse the Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Obligations and during any legal proceeding, including in any Insolvency Proceeding or appellate proceeding), including all fees, expenses and disbursements of any law firm or other external legal counsel and, without duplication, the allocated cost of internal legal services and all expenses and disbursements of internal counsel. The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto and other out-of-pocket expenses incurred by the Agent and the cost of independent public accountants and other outside experts retained by the Agent or any Lender. All amounts due under this Section shall be payable within ten Business Days after written demand therefor together with, if requested by the Company, backup documentation supporting such payment or reimbursement request. The agreements in this Section shall survive the repayment of the Loans and the other Obligations. Section 10.05. Company Indemnification; Damage Waiver. (a) Whether or not the transactions contemplated hereby are consummated, the Company shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact involved with the refinancing or the Transactions (collectively the "Indemnified Persons") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, charges and reasonable costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever (including those arising from or relating to any environmental matters) that may at any time be imposed on, incurred by or asserted against any such Indemnified Person in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, 86 performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment or Loan or the use or proposed use of the proceeds therefrom or (c) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnified Person is a party thereto (all the foregoing, collectively, the "Indemnified Liabilities"), in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnified Person; provided that such indemnity shall not, as to any Indemnified Person, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnified Person. No Indemnified Person shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnified Person have any liability for any indirect or consequential damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Effective Date). All amounts due under this Section shall be payable within thirty days after written demand therefor together with, if requested by the Company, backup documentation supporting such indemnification request. The agreements in this Section shall survive the resignation of the Agent, the replacement of any Lender and the repayment, satisfaction or discharge of all the other Obligations. (b) To the extent permitted by applicable law, the Company shall not assert, and hereby waives, any claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with or as a result of this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof. Section 10.06. Payments Set Aside. To the extent that the Company makes a payment to the Agent or the Lenders, or the Agent or the Lenders exercise their right of set-off, and such payment or the proceeds of such set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any Insolvency Proceeding or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred and (b) each Lender severally agrees to pay to the Agent upon demand its pro rata share of any amount so recovered from or repaid by the Agent. Section 10.07. Assignments, Participations, Etc. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Company may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an 87 Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) or (h) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Indemnified Persons and their permitted successors and assigns) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Loans at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender's Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund (as defined in subsection (g) of this Section) with respect to a Lender, the aggregate amount of the Loans subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1,000,000 unless each of the Agent and, so long as no Event of Default has occurred and is continuing, the Company otherwise consents (each such consent not to be unreasonably withheld or delayed); (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement with respect to the Loans assigned; (iii) any assignment of a Revolving Credit Loan or a Revolving Credit Commitment must be approved by the Agent unless the Person that is the proposed assignee is itself a Revolving Credit Lender (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties to each assignment shall execute and deliver to the Agent an Assignment and Assumption, together with a processing and recordation fee of $2,500 (which fee shall not, except in the case of an assignment pursuant to Section 3.07 (if such fee is not paid by the assignee), be payable by the Company); provided that no such fee shall be payable in the case of any assignment by a Lender to an Affiliate or Approved Fund of such Lender; provided further that in the case of two or more concurrent assignments to two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor (in each case, collectively, an "Assignee Group") (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), the fees payable with respect to such assignments and assumptions are set forth in Schedule 10.07(b) hereto. Subject to acceptance and recording thereof by the Agent pursuant to subsection (c) of this Section (but without prejudice to any right of the assigning Lender otherwise specified herein to make assignments hereunder without the consent of the Agent), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement (provided that, with respect to circumstances in effect on the effective date of such Assignment and Assumption, an Eligible Assignee shall not be entitled to receive any greater payment under Section 3.01 than the applicable Lender would have been entitled to receive had the assignment not taken place), 88 and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 3.01, Section 3.03, Section 3.04, Section 10.04 and Section 10.05 with respect to facts and circumstances occurring prior to the effective date of such assignment). Upon request, the Company (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section. (c) The Agent, acting solely for this purpose as an agent of the Company, shall maintain at the Agent's Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the principal amounts of the Loans owing to each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Company, the Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Company and any Lender at any reasonable time and from time to time upon reasonable prior notice. (d) Any Lender may at any time, without the consent of, or notice to, the Company or the Agent, sell participations to any Person (other than a natural person or the Company or any of the Company's Subsidiaries) (each, a "Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of the Loans owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Company, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that directly affects such Participant. Subject to subsection (e) of this Section, the Company agrees that each Participant shall be entitled to the benefits of Section 3.01, Section 3.03, and Section 3.04 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.09 as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. (e) A Participant shall not be entitled to receive any greater payment under Section 3.01 or Section 3.03 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Company's prior written consent. A Participant that is not a "United States 89 person" within the meaning of Section 7701(a)(30) of the Code shall not be entitled to the benefits of Section 3.01 unless the Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Company, to comply with Section 9.12 as though it were a Lender. (f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Lender; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. (g) As used herein, the following terms have the following meanings: "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Agent and (ii) unless an Event of Default has occurred and is continuing, the Company (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall not include the Company or any of the Company's Subsidiaries. "Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business. "Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender. (h) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may create a security interest in all or any portion of the Loans owing to it and the Note, if any, held by it to the trustee for holders of obligations owed, or securities issued, by such Fund as security for such obligations or securities, provided that unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise. Section 10.08. Confidentiality. Each Lender agrees to take and to cause its Affiliates to take normal and reasonable precautions and exercise due care to maintain the confidentiality of all information provided to it by the Company or any Subsidiary, or by the Agent on the Company's or such Subsidiary's behalf, under this Agreement or any other Loan Document, and neither it nor any of its Affiliates shall use any such information (x) other than in connection with or in enforcement of this Agreement and the other Loan Documents or in connection with other business now or hereafter existing or contemplated with the Company or any Subsidiary or (y) in any manner that would constitute a violation of applicable laws, except, in either case, to 90 the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by the Lender, or (ii) was or becomes available on a non-confidential basis from a source other than the Company, provided that such source is not bound by a confidentiality agreement with the Company known to the Lender; provided further that any Lender may disclose such information (a) at the request or pursuant to any requirement of any Governmental Authority to which the Lender is subject or in connection with an examination of such Lender by any such authority; (b) pursuant to subpoena or other court process; (c) when required to do so in accordance with the provisions of any applicable Requirement of Law; (d) to the extent reasonably required in connection with any litigation or proceeding to which the Agent or any Lender or their respective Affiliates may be party; (e) to the extent reasonably required in connection with the exercise of any remedy hereunder or under any other Loan Document; (f) to such Lender's independent auditors and other professional advisors; (g) to any Participant or Eligible Assignee, actual or potential, provided that such Person agrees in writing to keep such information confidential to the same extent required of the Lenders hereunder; (h) as to any Lender or its Affiliate, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Company or any Subsidiary is party with such Lender or such Affiliate; (i) to its Affiliates, provided that such Affiliates are not insurance companies; (j) to any other party to this Agreement; and (k) to any pledgee referred to in Section 10.07(f) or any direct contractual counterparty or prospective counterparty (or such counterparty's or prospective counterparty's professional advisor) to any credit derivative transaction relating to obligations of the Obligors (so long as all parties, including all counterparties and advisors agree to be bound by the provisions of this Section 10.08). Section 10.09. Set-off. In addition to any rights and remedies of the Lenders provided by law, if an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is authorized at any time and from time to time, without prior notice to the Company, any such notice being waived by the Company, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender or Affiliate to or for the credit or the account of the Company against any and all Obligations owing to such Lender, now or hereafter existing, irrespective of whether or not the Agent or such Lender shall have made demand under this Agreement or any Loan Document and although such Obligations may be contingent or unmatured; provided that neither any Lender nor any of its Affiliates shall be entitled to exercise any such set off with respect to any trust or payroll account. Each Lender agrees to promptly notify the Company and the Agent after any such set-off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application. Section 10.10. Notification of Addresses, Lending Offices, Etc. Each Lender shall notify the Agent in writing of any changes in the address to which notices to the Lender should be directed, of addresses of any Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agent shall reasonably request. Section 10.11. Counterparts. This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument. Notwithstanding the foregoing, any lender under the Existing Credit Agreement that has elected to convert all or a portion of its "Term Loan" thereunder into a Term Loan hereunder may become a Lender hereunder by executing a notice (a "Term Loan Conversion Notice") in substantially the form attached hereto as Exhibit J. Delivery by a Lender of a duly executed Term Loan Conversion Notice with respect to its Converted Term Loan (as defined in such Term Loan Conversion Notice) shall obviate the need for such Lender to execute this Agreement. Such Term Loan Conversion Notice shall be deemed for all purposes to be a signature to this Agreement and such Converted Term Loan shall be deemed to be a Term Loan for all purposes hereunder. 91 Section 10.12. Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Agent and each Lender, regardless of any investigation made by the Agent or any Lender or on their behalf, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied. Section 10.13. Severability. If any provision of any Loan Document is invalid, illegal or unenforceable in any jurisdiction then, to the fullest extent permitted by law, (i) such provision shall, as to such jurisdiction, be ineffective to the extent (but only to the extent) of such invalidity, illegality or unenforceability, (ii) the other provisions of the Loan Documents shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Lenders in order to carry out the intentions of the parties thereto as nearly as may be possible and (iii) the invalidity, illegality or unenforceability of any such provision in any jurisdiction shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. Section 10.14. Replacement of Defaulting Lenders and Non-Consenting Lenders. If any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Company may, at its sole expense and effort, upon notice to such Lender and the Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.07), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that: (a) the Agent shall have received the assignment fee specified in Section 10.07(b); (b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.04) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts). A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply. Section 10.15. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. (b) The Company irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any relevant appellate court, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each party hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be 92 heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. Each party hereto 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 any Loan Document shall affect any right that any Lender or the Agent may otherwise have to bring any action or proceeding relating to any Loan Document against any Obligor or its properties in the courts of any jurisdiction. (c) The Company irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to any Loan Document in any court referred to in subsection (b) of this Section. Each party hereto irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such suit, action or proceeding in any such court. (d) Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 10.02. Nothing in any Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law. Section 10.16. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. Section 10.17. USA PATRIOT Act Notice. Each Lender and the Agent (for itself and not on behalf of any Lender) hereby notifies the Company that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act"), it is required to obtain, verify and record information that identifies the Company, which information includes the name and address of the Company and other information that will allow such Lender or the Agent, as applicable, to identify the Company in accordance with the Patriot Act. Section 10.18. Entire Agreement. This Agreement, together with the other Loan Documents and any separate agreements with respect to fees payable to the Agent, embodies the entire agreement and understanding among the Company, the Lenders and the Agent and 93 supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof. [signature pages to follow] 94 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their proper and duly authorized officers as of the day and year first above written. CONSECO, INC. By: /s/ Daniel J. Murphy ------------------------------- Name: Daniel J. Murphy Title: Senior Vice President and Treasurer BANK OF AMERICA, N.A., as Agent and as Lender By: /s/ Leslie Nannen ------------------------------- Name: Leslie Nannen Title: Senior Vice President JPMORGAN CHASE BANK, N.A., as Syndication Agent and as Lender By: /s/ Helen L. Newcomb ------------------------------- Name: Helen L. Newcomb Title: Vice President LENDER: MORGAN STANLEY SENIOR FUNDING, INC. By: /s/ Eugene F. Martin -------------------------------- Name: Eugene F. Martin Title: Vice President Morgan Stanley Senior Funding, Inc. GOLDMAN SACHS CREDIT PARTNERS L.P. By: /s/ William Archer -------------------------------- Name: William Archer Title: Authorized Signatory LENDER: Lehman Commercial Paper Inc. By: /s/ Craig Malloy -------------------------------- Name: Craig Malloy Title: Authorized Signatory EX-99 5 release.txt EXHIBIT 99.1 Exhibit 99.1 news For Release Immediate Contacts (News Media) Tony Zehnder, EVP, Corporate Communications 312.396.7086 (Investors) Lowell Short, SVP, Finance 317.817.2893 Conseco closes private offering of convertible debentures and amendment of its credit facility Carmel, Ind., August 15, 2005 - Conseco, Inc. (NYSE:CNO) today closed its previously announced private offering of 3.50% Convertible Debentures due September 30, 2035 and completed the amendment of its senior secured credit facility. The initial purchasers in the convertible debenture offering exercised their option to purchase an additional $30 million of debentures, bringing the total principal amount of the offering to $330 million. Net proceeds from the offering of approximately $320 million were applied to repay term loans outstanding under the company's senior credit facility. The amendment of the senior credit facility provides for, among other things: o A reduction in the principal amount of the facility from $767 million to $447 million, using proceeds from the convertible debenture offering described above o A reduction in the interest spread on the term loan from 350 basis points over LIBOR to 200 basis points over LIBOR, with a further reduction to 175 basis points over LIBOR when the company's credit facility is rated Ba3 by Moody's Investor Services, Inc. o Relaxed financial covenants and increased flexibility for the company to enter into capital markets transactions The Company expects to recognize an after-tax expense of $2.0 million to $3.0 million during the third quarter of 2005 for the write-off of certain debt issuance costs related to the reduction of the principal amount borrowed under the senior secured credit facility. The debentures and the common shares issuable upon conversion thereof have not been registered under the Securities Act of 1933 or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the debentures, nor shall there be any sale of debentures in any state in which such offer, solicitation or sale would be unlawful. Conseco, Inc.'s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, long-term care, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial futures. - # # # # - -----END PRIVACY-ENHANCED MESSAGE-----