FIRST SUPPLEMENTAL INDENTURE
between
CONSECO, INC.
and
FLEET NATIONAL BANK, AS TRUSTEE
Dated as of November 14, 1996
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.................................................................. 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount; Purchase Price; Payment of
Principal; Global Securities......................................................... 4
SECTION 2.2. Maturity............................................................................. 5
SECTION 2.3. Form and Payment. ................................................................... 6
SECTION 2.4. Global Debenture. ................................................................... 6
SECTION 2.5. Interest............................................................................. 7
SECTION 2.6. Authorized Denominations............................................................. 8
SECTION 2.7. Redemption........................................................................... 9
SECTION 2.8 Defeasance........................................................................... 9
SECTION 2.9 No Sinking Fund...................................................................... 9
SECTION 2.10 Depository........................................................................... 9
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special Event Redemption............................................................. 9
SECTION 3.2. Optional Redemption. ................................................................. 9
SECTION 3.3. Partial Redemption................................................................... 10
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period................................................. 10
SECTION 4.2. Notice of Extension. ................................................................ 11
SECTION 4.3. Limitation of Transactions. ......................................................... 11
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.................................................................. 12
SECTION 5.2. Payment Upon Resignation or Removal.................................................. 12
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ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. Listing on an Exchange. ............................................................. 13
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1. Form of Debenture.................................................................... 13
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1. Original Issue of Debentures......................................................... 21
SECTION 8.2. Reports by the Trustee............................................................... 21
ARTICLE IX
COVENANTS
SECTION 9.1. Covenants as to Trust................................................................ 22
ARTICLE X
DEFAULT
SECTION 10.1. Additional Event of Default.......................................................... 22
SECTION 10.2. Limitations on Waivers and Consents.................................................. 23
SECTION 10.3. Acknowledgment of Rights............................................................. 23
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Ratification of Indenture............................................................ 24
SECTION 11.2. Trustee Not Responsible for Recitals................................................. 24
SECTION 11.3. Governing Law........................................................................ 24
SECTION 11.4. Separability......................................................................... 24
SECTION 11.5. Counterparts......................................................................... 24
SECTION 11.6. Effect of Headings................................................................... 24
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FIRST SUPPLEMENTAL INDENTURE dated as of November 14, 1996 (the "First
Supplemental Indenture") between Conseco, Inc., an Indiana corporation (the
"Issuer"), and Fleet National Bank, as trustee (the "Trustee") under the
Indenture dated as of November 14, 1996 between the Issuer and the Trustee (the
"Indenture").
WHEREAS, the Issuer executed and delivered the Indenture to the Trustee
to provide for the future issuance of the Issuer's unsecured subordinated
debentures, notes or other evidence of indebtedness (the "Securities") to be
issued from time to time in one or more series as might be determined by the
Issuer under the Indenture, in an unlimited aggregate principal amount which may
be authenticated and delivered as provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to
provide for the establishment of a new series of its Securities to be known as
its 9.16% Subordinated Deferrable Interest Debentures due 2026 (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture;
WHEREAS, Conseco Financing Trust I, a Delaware statutory business trust
(the "Trust"), is offering to the public $275 million aggregate liquidation
amount of its 9.16% Trust Originated Preferred Securities (the "Preferred
Securities"), representing preferred undivided beneficial interests in the
assets of the Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Issuer
of $8,600,000 aggregate liquidation amount of its 9.16% Trust Originated Common
Securities (the"Common Securities"), in $283,600,000 aggregate principal amount
of the Debentures;
WHEREAS, the Issuer has requested that the Trustee execute and deliver
this First Supplemental Indenture; and
WHEREAS, all requirements necessary to make this First Supplemental
Indenture a valid instrument in accordance with its terms and to make the
Debentures, when executed by the Issuer and authenticated and delivered by the
Trustee as provided in the Indenture, the valid obligations of the Issuer have
been performed, and the execution and delivery of this First Supplemental
Indenture has been duly authorized in all respects.
NOW, THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Issuer covenants and agrees with
the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture (including as set forth in
the first paragraph of Section 1.1 of the Indenture) has the same meaning when
used in this First Supplemental Indenture unless otherwise defined herein;
(b) a term defined anywhere in this First Supplemental Indenture
has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article
of this First Supplemental Indenture unless otherwise specified herein;
(e) headings are for convenience of reference only and do not
affect interpretation;
(f) the following terms have the meanings given to them in
the Declaration (as defined herein) or in the terms of the Trust Securities
(as defined herein) as established in accordance with the Declaration:
(i) Affiliate;
(ii) Business Day;
(iii) Debenture Issuer;
(iv) Delaware Trustee;
(v) Distribution;
(vi) Investment Company Event;
(vii) Preferred Security Certificate;
(viii) Pricing Agreement;
(ix) Pro Rata;
(x) Property Trustee;
(xi) Regular Trustees;
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(xii) Securities;
(xiii) Securities Guarantees;
(xiv) Special Event;
(xv) Sponsor;
(xvi) Tax Event; and
(xvii) Underwriting Agreement;
(g) The following terms have the meanings given to them in this
Section 1.1(g):
"Additional Interest" shall have the meaning set forth in Section 2.5
(c).
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5(a).
"Declaration" means the Amended and Restated Declaration of Trust of
Conseco Financing Trust I, a Delaware statutory business trust, dated as of
November 14, 1996.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means that as a result of an election by the
Issuer, the Trust is to be dissolved in accordance with the Declaration, and the
Debentures held by the Property Trustee are to be distributed to the holders of
the Trust Securities Pro Rata in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Extension Conditions" means the following:
(i) the Issuer is not in bankruptcy or otherwise insolvent;
(ii) the Issuer is not in default on any Debentures issued
to the Trust or to any trustee of the Trust in connection with
the issuance of Trust Securities by the Trust;
(iii) the Issuer has made timely payments on the Debentures
for the immediately preceding six quarters without deferrals;
(iv) the Trust is not in arrears on payments of Distributions
on the Trust Securities;
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(v) the Debentures or the Preferred Securities are rated
investment grade by any one of Standard & Poor's Corporation,
Xxxxx'x Investors Service, Inc., Fitch Investor Service, LP,
Duff & Xxxxxx Credit Rating Company or any other nationally
recognized statistical rating organization; and
(vi) the final maturity of such Debentures is no later than
the forty-ninth anniversary of the issuance of the Preferred
Securities.
"Global Debenture" shall have the meaning set forth in Section 2.4(a)
(i).
"Interest Deduction Date" shall have the meaning set forth in Section
2.2(b).
"Interest Payment Date" shall have the meaning set forth in Section 2.5
(a).
"Maturity Date" shall have the meaning set forth in Section 2.2(a).
"Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.4(a)(ii).
"Optional Redemption Price" shall have the meaning set forth in Section
3.2.
"Preceding Maturity Date" shall have the meaning set forth in Section
2.2(c).
"Redemption Price" shall have the meaning set forth in Section 3.1.
"Scheduled Maturity Date" means November 30, 2026.
"Trust Securities" shall mean the Securities.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount; Purchase Price; Payment of
Principal; Global Securities.
(a) There is hereby authorized a series of Securities designated the
"9.16% Subordinated Deferrable Interest Debentures due 2026," limited in
aggregate principal amount to $283,600,000 (not including Debentures
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Debentures pursuant to Sections 3.4, 3.5, 3.6, 8.6 or
10.7 of the Indenture), which amount shall be as set forth in a Company Order
for the authentication and delivery of Debentures pursuant to Section 3.3 of the
Indenture.
(b) The Debentures shall be issued for a purchase price equal to 100%
of the principal amount of such Debentures.
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(c) The principal of the Debentures shall be due and payable in full on
the Maturity Date.
(d) The Debentures shall initially be issued in fully registered
non-book entry certificated form in the aggregate principal amount of
$283,600,000.
SECTION 2.2. Maturity.
(a) The Maturity Date means the date on which the Debentures mature and
on which the principal shall be due and payable together with all accrued and
unpaid interest thereon (including Compounded Interest, if any), which date
shall be the Scheduled Maturity Date unless the Maturity Date has been changed
pursuant to Section 2.2(c) or (d), in which case the Maturity Date shall be the
Maturity Date most recently established in accordance with Section 2.2(c) or
(d).
(b) The Interest Deduction Date shall mean the date which is six months
earlier than the ending date of the maximum term (beginning on the date of issue
of the Debentures and including any extensions thereof), as determined under any
federal statute applicable by its terms to the Debentures which is enacted at
any time after the issuance of the Debentures, of a debt instrument for which
interest is deductible for federal income tax purposes.
(c) If the Issuer has elected to dissolve the Trust and cause the
Debentures to be distributed to the holders of the Trust Securities in
liquidation of the Trust in accordance with Section 8.1(a)(v) of the
Declaration, then the Issuer may elect to shorten the Maturity Date to a date
not earlier than November 19, 2001, or extend the Maturity Date to a date which
is not later than the earlier of (i) November 30, 2045, or (ii) the Interest
Deduction Date, and such election shall be made, and such change in the Maturity
Date shall be effective, on such date as notice thereof has been given in
accordance with Section 2.2(e) so long as, in the case of an extension of the
Maturity Date, the Issuer meets the Extension Conditions on such date; provided
that (i) any such extension of the Maturity Date shall cease to be in effect
(and the Maturity Date shall be the Maturity Date in effect prior to such
extension (the "Preceding Maturity Date")) unless the Extension Conditions also
are met on the Preceding Maturity Date, and (ii) in no event shall an extended
Maturity Date be later than the Interest Deduction Date even if the Maturity
Date has previously been extended to a date beyond the Interest Deduction Date.
(d) The Issuer may at any time before the date which is 90 days before
the Maturity Date, elect to extend the Maturity Date for one or more periods,
but in no event to a date later than the earlier of (i) November 30, 2045, or
(ii) the Interest Deduction Date, and such election shall be made, and such
extension of the Maturity Date shall be effective, on such date as notice
thereof has been given in accordance with Section 2.2(e) so long as the Issuer
meets the Extension Conditions on such date; provided that (i) any such
extension of the Maturity Date shall cease to be in effect (and the Maturity
Date shall be the Preceding Maturity Date) unless the Extension Conditions also
are met on the Preceding Maturity Date, and (ii) in no event shall an extended
Maturity Date be later than the Interest Deduction Date even if the Maturity
Date has previously been extended to a date beyond the Interest Deduction Date.
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(e) If the Issuer desires to change the Maturity Date pursuant to
Section 2.2(c) or (d), the Issuer shall give notice to Holders of the
Debentures, the Property Trustee, the Trust and the Trustee of the new Maturity
Date.
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued as
Registered Securities in fully registered certificated form without interest
coupons. The place where principal of and interest (including the Compounded
Interest, if any) on the Debentures will be payable, the Debentures may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in r spect of the Debentures and the Indenture may
be served shall be the Corporate Trust Office of the Trustee, provided, however,
that payment of interest may be made at the option of the Issuer by wire
transfer to an account maintained by a Holder (upon appropriate instructions
from such Holder) or by check mailed to the Holder at such address as shall
appear in the Register. Notwithstanding the foregoing, so long as the Holder of
any Debentures is the Property Trustee, the payment of the principal of and
interest (including Compounded Interest, if any) on such Debentures held by the
Property Trustee will be made by wire transfer of immediately available funds at
such place and to such account as may be designated by the Property Trustee.
Payment of principal of the Debentures will only be made upon surrender of the
Debentures to the Trustee. The Debentures will be denominated in Dollars and
payment of principal and interest on the Debentures shall be made in Dollars.
SECTION 2.4. Global Debenture.
(a) In connection with a distribution of the Debentures to the holders
of the Trust Securities pursuant to the Declaration:
(i) The Debentures in certificated form to be distributed to
the holders of Preferred Securities may be presented to the Trustee by the
Property Trustee in exchange for a global Debenture in an aggregate principal
amount equal to the agg egate principal amount of all Outstanding Debentures of
such series (a "Global Debenture"), to be registered in the name of the
Depository, or its nominee, and delivered by the Trustee to the Depository for
crediting to the accounts of its participants pursuant to the instructions of
the Regular Trustees. The Issuer upon any such presentation shall execute a
Global Debenture in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with the Indenture and
this First Supplemental Indenture. Payments on the Debentures issued as a Global
Debenture will be made to the Depository.
(ii) If any Preferred Securities are held in non book-entry
certificated form, the Debentures in certificated form may be presented to the
Trustee by the Property Trustee and any Preferred Security Certificate which
represents Preferred Securities other than Preferred Securities held by the
Depository or its nominee ("Non Book-Entry Preferred Securities") will be deemed
to represent beneficial interests in Debentures presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the aggregate
liquidation amount of the Non Book-Entry Preferred Securities until such
Preferred Security Certificates are presented to the Registrar for transfer or
reissuance at which time such Preferred Security Certificates will be canceled
and a Debenture, registered in the name of the holder of the
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Preferred Security Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred Security Certificate
canceled, will be executed by the Issuer and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and this First
Supplemental Indenture. On issue of such Debentures, Debentures with an
equivalent aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been canceled.
(b) Unless and until it is exchanged for Debentures in registered
certificated form, a Global Debenture may be transferred, in whole but not in
part, only by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository selected or approved by
the Issuer or a nominee of such successor Depository.
(c) If at any time the Depository for the Debentures notifies the
Issuer that it is unwilling or unable to continue as Depository for the
Debentures or if at any time the Depository for the Debentures shall no longer
be registered or in good standing as a clearing agency under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation, at
a time at which the Depository is required to be so registered to act as
Depository for the Debentures, and a successor Depository for such series is not
appointed by the Issuer within 90 days after the Issuer receives such notice or
becomes aware of such condition, as the case may be, the Issuer will execute,
and, subject to Article 3 of the Indenture, the Trustee, upon written notice
from the Issuer, will authenticate and deliver the Debentures in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. In addition, the Issuer, in its sole
discretion, may at any time determine that the Debentures shall no longer be
represented by a Global Debenture. In such event the Issuer will execute, and
subject to Article 3 of the Indenture, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Issuer, will authenticate and
deliver the Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in exchange for such Global Debenture.
Upon the exchange of the Global Debenture for such Debentures in definitive
registered form without coupons, in authorized denominations, the Global
Debenture shall be canceled by the Trustee. Such Debentures in definitive
registered form issued in exchange for the Global Debenture shall be registered
in such names and in such authorized denominations as the Depository, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee in writing. The Trustee shall deliver such registered
certificated Debentures in definitive form in exchange for the Global Debenture
to the Depository for delivery to the Persons in whose names such Debentures are
so registered.
SECTION 2.5. Interest.
(a) The Debentures will bear interest at the fixed rate of 9.16% per
annum (the "Coupon Rate") from the original date of issuance or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Coupon Rate,
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compounded quarterly, payable (subject to the provisions of Article IV)
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year (each, an "Interest Payment Date"), commencing on December 31, 1996.
Interest on the Debentures (except defaulted interest) shall be paid to the
Persons in whose name the Debentures are registered, at the close of business on
the regular Record Date for such interest installment (including Debentures that
are cancelled after the Record Date and before the Interest Payment Date),
which, with respect to any Debentures of which the Property Trustee is the
Holder or with respect to a Global Debenture, shall be the close of business on
the Business Day next preceding that Interest Payment Date. Notwithstanding the
foregoing sentence, if the Preferred Securities are no longer in book-entry only
form or if, pursuant to the Indenture and this First Supplemental Indenture the
Debentures are not represented by a Global Debenture, the Issuer may select a
regular Record Date for such interest installment which shall conform to the
rules of any securities exchange, interdealer quotation system or other
organization on which the Debentures are listed and which shall be at least one
Business Day but less than 60 Business Days before the applicable Interest
Payment Date. Notwithstanding the foregoing, any interest that is payable at
maturity shall be payable to the Person to whom principal payable at maturity
shall be payable.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months, and for any period shorter
than a full quarter on the basis of the actual number of days elapsed in such
90-day quarter. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, notwithstanding any provision of the Indenture to the contrary, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) If, at any time while the Property Trustee is the Holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessment or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges will be equal to the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.
SECTION 2.6. Authorized Denominations.
The Debentures shall be issuable in denominations of $25 and integral
multiples of $25 in excess thereof.
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SECTION 2.7. Redemption.
The Debentures are not subject to conversion at the option of the
Holder. The Debentures are not subject to redemption at the option of the Holder
and are subject to redemption at the option of the Issuer or otherwise as
provided in Article III hereof.
SECTION 2.8 Defeasance.
The Debentures shall not be subject to the provisions of Article 4 of
the Indenture concerning the satisfaction and discharge of the Issuer's
indebtedness and obligations under the Indenture and the termination of certain
covenants of the Issuer under the Indenture.
SECTION 2.9 No Sinking Fund.
The Debentures shall not be entitled to the benefit of any sinking fund
or analogous provision.
SECTION 2.10 Depository.
The Depository Trust Company (or its nominee) shall act as the initial
Depository for any Global Debenture which may be issued pursuant to this First
Supplemental Indenture.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special Event Redemption.
If a Special Event has occurred and is continuing then, notwithstanding
Section 3.2 but subject to the provisions of Article 10 of the Indenture, the
Issuer shall have the right, upon not less than 30 days' nor more than 60 days'
notice to the Holders of the Debentures, to redeem the Debentures, in whole (but
not in part), for cash within 90 days following the occurrence of such Special
Event at a redemption price equal to 100% of the principal amount to be redeemed
plus any accrued and unpaid interest thereon (including Compounded Interest, if
any) to the date of such redemption (the "Redemption Price"). The Redemption
Price shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Issuer determines and specifies in the
notice of redemption, provided the Issuer shall deposit with the Trustee an
amount sufficient to pay the Redemption Price at least one hour prior to the
time such Redemption Price is to be paid.
SECTION 3.2. Optional Redemption.
Subject to the provisions of Section 3.3 and Article 10 of the
Indenture, the Issuer shall have the right to redeem the Debentures, in whole or
in part, at any time or from time to time, on or after November 19, 2001, at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest thereon, (including Compounded Interest,
9
if any), to the date of such redemption (the "Optional Redemption Price"). Any
redemption pursuant to this paragraph will be made upon not less than 30 days
nor more than 60 days notice to the Holder of the Debentures, at the Optional
Redemption Price. The Optional Redemption Price shall be paid prior to 12:00
noon, New York time, on the date of such redemption or at such earlier time as
the Issuer determines and specifies in the notice of redemption, provided that
the Issuer shall deposit with the Trustee an amount sufficient to pay the
Optional Redemption Price at least one hour prior to the time, on the date such
Optional Redemption Price is to be paid.
SECTION 3.3. Partial Redemption.
(a) If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange, interdealer quotation system or other organization on which
the Preferred Securities are then listed, the Issuer shall not be permitted to
effect such partial redemption and may only redeem the Debentures in whole.
(b) The Issuer may not redeem fewer than all of the Outstanding
Debentures unless all accrued and unpaid interest on the Debentures has been
paid as of the Interest Payment Date next preceding the Redemption Date.
(c) If the Debentures are only partially redeemed pursuant to Section
3.2, the Debentures will be redeemed pro rata or by lot or by any other method
utilized by the Trustee; provided that if at the time of redemption the
Debentures are registered as a Global Debenture, the Depository shall determine,
in accordance with its procedures, the principal amount of such Debentures
credited to each of its participant accounts to be redeemed.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Issuer shall have the right, at any time and from time to time
during the term of the Debentures, to defer payments of interest on the
Debentures by extending the interest payment period of the Debentures for a
period not exceeding 20 consecutive quarters (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest shall be due
and payable; provided that no Extended Interest Payment Period may extend beyond
the Maturity Date. To the extent permitted by applicable law, interest, the
payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, will bear interest thereon at the
Coupon Rate compounded quarterly for each quarter of the Extended Interest
Payment Period ("Compounded Interest"). At the end of the Extended Interest
Payment Period, the Issuer shall pay all interest accrued and unpaid on the
Debentures, including any Compounded Interest (all such interest the "Deferred
Interest") that shall be payable to the Holders of the Debentures in whose names
the Subordinated Debentures are registered in the Register as of the Record Date
relating to the Interest Payment Date that corresponds to the end
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of such Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Issuer may further extend such period, provided
that such period together with all such previous and further extensions thereof
shall not exceed 20 consecutive quarters or extend beyond the Maturity Date.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Issuer may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Issuer may prepay at any time all or any
portion of the Deferred Interest accrued during an Extended Interest Payment
Period.
SECTION 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered Holder of the
Debentures at the time the Issuer selects an Extended Interest Payment Period,
the Issuer shall give written notice to the Trustee, the Regular Trustees and
the Property Trustee of its selection of such Extended Interest Payment Period
one Business Day before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities are payable, or (ii) the date the Regular
Trustees, on behalf of the Trust, are required to give notice of the record
date, or the date such Distributions are payable, to the New York Stock Exchange
or other applicable self-regulatory organization or to holders of the Preferred
Securities.
(b) If the Property Trustee is not the only Holder of the Debentures at
the time the Issuer selects an Extended Interest Payment Period, the Issuer
shall give the Trustee, the Property Trustee and the Holders of the Debentures
written notice of its selection of such Extended Interest Payment Period 10
Business Days before the earlier of (i) the next succeeding Interest Payment
Date, or (ii) the date the Issuer is required to give notice of the record or
payment date of such interest payment to the New York Stock Exchange or other
applicable self-regulatory organization or to Holders of the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 4.2 shall be counted as one of the 20 quarters permitted
in the maximum Extended Interest Payment Period permitted under Section 4.1.
SECTION 4.3. Limitation of Transactions.
If the Issuer shall exercise its right to defer payment of interest as
provided in Section 4.1, during any Extended Interest Payment Period (a) the
Issuer shall not declare or pay any dividends on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, (b) the Issuer shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Issuer that rank pari passu with or junior to the
Debentures and (c) the Issuer shall not make guarantee payments with respect to
the foregoing (other than pursuant to the Securities Guarantees); provided,
however, that notwithstanding the restriction in clause (a) above, the Issuer
may (i) declare and pay a stock dividend where the dividend stock is the same
stock as that on which the dividend is being paid and (ii) purchase or acquire
shares of its common stock in connection with the satisfaction by the Issuer of
its obligations under any employee benefit plans.
11
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures to
the Property Trustee in connection with the sale of the Trust Securities by the
Trust and during the existence of the Trust, the Issuer, in its capacity as
borrower with respect to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 6.9 of the Indenture;
(b) pay other debts and obligations of the Trust (other than with
respect to the Trust Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the organization,
maintenance and dissolution of the Trust, the offering, sale and issuance of the
Trust Securities (including commissions to the underwriters payable pursuant to
the Pricing Agreement), the retention of the Regular Trustees, reimbursement of
the Regular Trustees as provided in the Declaration, the fees and expenses of
the Property Trustee and the Delaware Trustee, the trustee under the Preferred
Securities Guarantee and the Common Securities Guarantee, the costs and expenses
relating to the operation of the Trust, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the acquisition, financing and disposition of Trust assets,
and the fees and expenses related to the enforcement by the Property Trustee of
the rights of the holders of the Preferred Securities) and all other amounts
payable by the Issuer pursuant to the Declaration;
(c) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
(d) pay any and all taxes, duties, assessments or governmental charges
of whatever nature (other than withholding taxes) imposed on the Trust or its
assets and all liabilities, costs and expenses of the Trust with respect to such
taxes, duties, assessments or governmental charges.
SECTION 5.2. Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the Indenture
or the removal or resignation of the Trustee pursuant to Section 6.10 of the
Indenture, the Issuer shall pay to the Trustee all amounts due to the Trustee
accrued to the date of such termination, removal or resignation. Upon
termination of the Declaration or the removal or resignation of the Delaware
Trustee or the Property Trustee, as the case may be, pursuant to Section 5.7 of
the Declaration,
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the Issuer shall pay to the Delaware Trustee or the Property Trustee, as the
case may be, all amounts due to such trustee accrued to the date of such
termination, removal or resignation.
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. Listing on an Exchange.
If the Debentures are to be distributed to the holders of the Preferred
Securities as described in Section 2.4(a), the Issuer will, if the Debentures
are not already so listed, use its best efforts to list such Subordinated
Debentures on the New York Stock Exchange, Inc. or on such other exchange or
other organization as the Preferred Securities are then listed.
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
(IF THE DEBENTURE IS TO BE IN A GLOBAL DEBENTURE, INSERT - This
Debenture is in Global form within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depository or a nominee of a
Depository. Unless and until it is exchanged in whole or in part for securities
in certificated form in the limited circumstances described in the indenture,
this security may not be transferred except as a whole by the depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
its agent for registration of transfer, exchange or payment, and any Debenture
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC (and any payment hereon is made to Cede &
Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.)
13
CONSECO, INC.
9.16% SUBORDINATED DEFERRABLE INTEREST DEBENTURE
No. ____ DUE NOVEMBER 30, 2026 REGISTERED
$______
Conseco, Inc., an Indiana corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to______ , or registered assigns, the
principal sum of______ Dollars on November 30, 2026 (or on such date that is no
earlier than November 19, 2001 or such date that is no later than the earlier
of: (i) November 30, 2045, or (ii) the Interest Deduction Date, if the Company
elects to shorten or extend the Maturity Date as further described herein), and
to pay interest on said principal sum from November 19, 1996, or from the most
recent interest payment date (each such date, an "Interest Payment Date") to
which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on March 31, June 30, September 30 and
December 31 of each year commencing December 31, 1996, at the rate of 9.16% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded quarterly. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarter on
the basis of the actual number of days elapsed in such 90-day quarter. In the
event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture is registered at the close of
business on the regular record date for such interest installment, which shall
be the close of business on the Business Day next preceding such Interest
Payment Date. [If the Preferred Securities are no longer represented by a global
certificate or if the Debentures are not represented by a global debenture -
which shall be the close of business on the Business Day next preceding such
Interest payment.] Notwithstanding the foregoing, any interest that is payable
on the Maturity Date shall be payable to the Person to whom principal payable at
the Maturity Date shall be payable. Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the registered
Holders on such regular record date and may be paid to the Person in whose name
this Debenture (or one or more Predecessor Security) is registered at the close
of business on a special record date to be fixed in accordance with the
provisions of Section 3.7(b) of the Indenture. The principal of and the interest
on this Debenture shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of
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interest may be made at the option of the Company by check mailed to the
registered Holder at such address as shall appear in the Register.
Notwithstanding the foregoing, so long as the Holder of this Debenture is the
Property Trustee, the payment of the principal of and interest on this Debenture
will be made by wire transfer in immediately available funds at such place and
to such account as may be designated by the Property Trustee. Payment of
principal of the Debentures will only be made upon surrender of the Debentures
to the Trustee or Paying Agent.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Debenture is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________________, 1996.
CONSECO, INC.
By: _________________________________
By: _________________________________
SEAL
15
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned
Indenture.
FLEET NATIONAL BANK, as Trustee
By: ______________________________
Authorized Signatory
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(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of the
Company (herein sometimes referred to as the "Debentures"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to an Indenture dated as of November 14, 1996, duly executed and delivered
between the Company and Fleet National Bank, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of November 14, 1996,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Debentures, and to all of which provisions the Holder of this
Debenture by acceptance hereof, assents and agrees. By the terms of the
Indenture, the Debentures are issuable in series that may vary as to amount,
date of maturity, rate of interest and in other respects as provided in the
Indenture. This series of Debentures is limited in aggregate principal amount as
specified in said Supplemental Indenture.
Except as provided in the next paragraph with respect to the occurrence
of a Special Event, the Debentures may not be redeemed by the Company prior
November 19, 2001. The Company shall have the right to redeem this Debenture at
the option of the Company, without premium or penalty, in whole or in part at
any time and from time to time on or after November 19, 2001 (an "Optional
Redemption"), at a redemption price equal to 100% of the principal amount plus
any accrued and unpaid interest, including any Compounded Interest, if any, to
the date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 nor more than 60
days' notice at the Optional Redemption Price.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Company
shall have the right, upon not less than 30 nor more than 60 days' notice, to
redeem the Debentures in whole (but not in part) for cash at the Optional
Redemption Price within 90 days following the occurrence of such Special Event.
"Tax Event" means that the Regular Trustees shall have received an
opinion of independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
(b) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment, or change is effective or
such pronouncement or decision is announced on or after the date of original
issuance of the Preferred Securities, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days after the date thereof, subject
to United States federal income tax with respect to interest accrued or received
on the Debentures, (ii) the Trust is, or will be within 90 days after the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable to the Trust on the Debentures
is not, or within 90 days of the date thereof, will not be deductible, in whole
or in part, by the Company for United States federal income tax purposes.
17
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in practice under the
Investment Company Act of 1940, as amended (the "1940 Act"), to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" which is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities.
If the Debentures are only partially redeemed by the Company pursuant
to an Optional Redemption, the Debentures will be redeemed pro rata or by lot or
in some other equitable manner determined by the Trustee. Notwithstanding the
foregoing, if a partial redemption of the Debentures would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, the
Company shall not be permitted to effect such partial redemption and will only
redeem the Debentures in whole.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series (for the unredeemed portion hereof) will
be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions and limitations provided
in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures; provided,
however, that no such supplemental indentures shall (i) change the Stated
Maturity of the principal or any installment of principal or any installment of
interest (other than as contemplated herein), or reduce the amount or principal
or interest thereon or any premium payable upon redemption or repayment thereof,
or change the Place of Payment or currency in which principal or any interest is
payable, or impair the right to institute suit for the enforcement of any
payment of the principal and any premium and interest without the consent of the
Holder of each Debenture so affected; (ii) reduce the aforesaid percentage of
Debentures, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Debenture
then outstanding and affected thereby; (iii) change any obligation of the
Company to maintain an office or agency in the Place of Payment; or (iv) modify
any of the above provisions. The Indenture also contains provisions permitting
the Holders of a majority in aggregate principal amount of the Debentures of any
series at the time outstanding affected thereby, on behalf of all of the Holders
of the Debentures of such series, to waive any past default in the performance
of any of the covenants contained in the Indenture, or established
18
pursuant to the Indenture with respect to such series, and its consequences,
except a default in the payment of the principal or interest on the Debentures
or a default in respect of a covenant or provision of the Indenture or the
Debentures of such series which cannot be modified or amended without the
consent of each Holder of Debentures of such series. Any such consent or waiver
by the registered Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Debenture and of any Debentures issued in exchange
herefor or in place hereof (whether by registration of transfer or otherwise),
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Debenture at the time and place and at the rate and in the money herein
prescribed.
The Company shall have the right at any time during the term of the
Debentures from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarters not to extend beyond the Maturity
Date of the Debentures (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Debentures to the
extent that payment of such interest is enforceable under applicable law). In
the event that the Company exercises the right to defer interest payments, then,
prior to the payment of all accrued interest on outstanding Debentures, (a) the
Company shall not declare or pay dividends on, or make a distribution with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock, (b) the Company shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to the
Debentures and (c) the Company shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Securities Guarantees);
provided, however, that restriction (a) above does not apply to (i) any stock
dividends paid by the Company where the dividend stock is the same stock as that
on which the dividend is being paid and (ii) purchases or acquisitions of shares
of Company Common Stock in connection with the satisfaction by the Company of
its obligation under any employee benefit plans. Before the termination of any
such Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended Interest Payment
Period together with all such previous and further extensions thereof shall not
exceed 20 consecutive quarters and shall not extend beyond the Maturity Date of
the Debentures. At the termination of any such Extended Interest Payment Period
and upon the payment of all accrued and unpaid interest and any additional
amounts then due, the Company may commence a new Extended Interest Payment
Period.
At any time the Company will have the right to dissolve the Trust and
cause the Debentures to be distributed to the holders of the Trust Securities in
liquidation of the Trust. If the Company elects to dissolve the Trust and
thereby causes the Debentures to be distributed to the holders of the Trust
Securities, the Company shall have the right to (a) shorten the Maturity Date to
any date that is not earlier than November 19, 2001 and (b) to extend the
Maturity Date to a date no later than the earlier of (i) November 30, 2045, or
(ii) the Interest Deduction Date, provided the conditions in clauses (i) through
(vi) below are met on the date
19
the Company exercises such right and on the Maturity Date in effect prior to
such proposed extension (the "Preceding Maturity Date"). In addition, the
Company shall have the right, which must be exercised at least 90 days prior to
the Maturity Date then in effect, to extend the Maturity Date for one or more
periods, but in no event to a date later than the earlier of (i) November 30,
2045, or (ii) the Interest Deduction Date, provided that the Company must
satisfy the following conditions on the date it exercises such right and on the
Preceding Maturity Date: (i) the Company is not in bankruptcy or otherwise
insolvent, (ii) the Company is not in default on any Debentures issued to the
Trust or any trustee of the Trust in connection with the issuance of Trust
Securities by the Trust, (iii) the Company has made timely payments on the
Debentures for the immediately preceding six quarters without deferrals, (iv)
the Trust is not in arrears on payment of distributions on the Trust Securities,
(v) the Debentures or the Preferred Securities are rated investment grade by a
nationally recognized statistical rating organization, and (vi) the final
maturity of the Debentures is no later than November 30, 2045. In the event the
conditions specified in clauses (i) through (vi) above are not satisfied on the
date of exercise of the right to extend the Maturity Date and on the Preceding
Maturity Date, then the Maturity Date of the Debentures shall be the Preceding
Maturity Date. In no event shall an extended Maturity Date be later than the
Interest Deduction Date even if the Maturity Date has previously been extended
to a date beyond the Interest Deduction Date.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on the
Register of the Company, upon surrender of this Debenture for registration of
transfer at the Corporate Trust Office of the Trustee accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present of future, as
such, of the Company or of any predecessor or 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 the consideration for the issuance hereof, expressly
waived and released.
20
[The Debentures of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof,
provided that this Global Debenture is exchangeable for Debentures in definitive
form only under certain limited circumstances set forth in the Indenture.] As
provided in the Indenture and subject to certain limitations herein and therein
set forth, Debentures of this series so issued are exchangeable for a like
aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering the same. All
terms used in this Debenture that are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
The Company and the Holder agree (i) that for United States federal,
state and local tax purposes it is intended that the Debenture constitute
indebtedness and (ii) to file all United States federal, state and local tax
returns and reports on such basis (unless the Company or the Holder, as the case
may be, shall have received an opinion of independent nationally recognized tax
counsel to the effect that as a result of a change in law after the date of the
issuance of the Debenture the Company or the Holder, as the case may be, is
prohibited from filing on such basis).
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $283,600,000 may, upon
execution of this First Supplemental Indenture, be executed by the Issuer and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver such Debentures to or upon the written order of the
Issuer, signed by its Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary,
without any further action by the Issuer.
SECTION 8.2. Reports by the Trustee.
Up until and including the Maturity Date, the Trustee shall, in respect
of each applicable date, make such reports within such time periods as are
required to be made by the Trustee under the Trust Indenture Act and the
Indenture.
21
ARTICLE IX
COVENANTS
SECTION 9.1. Covenants as to Trust.
In the event Debentures are issued and sold to the Property Trustee in
connection with the issuance of Trust Securities by the Trust, for so long as
the Trust Securities remain outstanding, the Issuer will (i) maintain 100%
direct or indirect ownership of the Common Securities of the Trust; provided,
however, that any permitted successor of the Issuer under the Indenture may
succeed to the Issuer's ownership of the Common Securities, (ii) not voluntary
dissolve, windup or terminate the Trust, except in connection with the
distribution of Debentures upon a Dissolution Event or otherwise, and in
connection with certain mergers, consolidations or amalgamations permitted by
the Declaration, (iii) timely perform its duties as sponsor of the Trust, (iv)
use its reasonable efforts to cause the Trust (a) to remain a business trust,
except in connection with the distribution of Debentures as provided in the
Declaration, the redemption of the Trust Securities or in connection with
certain mergers, consolidations or amalgamations as permitted by the
Declaration, and (b) otherwise continue not to be treated as an association
taxable as a corporation or partnership for United States federal income tax
purposes, and (v) use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an individual beneficial interest in the
Debentures. This covenant is intended solely for the benefit of the Holders of
the Debentures issued pursuant to this First Supplemental Indenture and shall
not be applicable to the Securities of any other series issued pursuant to the
Indenture.
ARTICLE X
DEFAULT
SECTION 10.1. Additional Event of Default.
There is hereby established as an additional Event of Default (as
contemplated by Section 5.1(7) of the Indenture) the following:
In the event the Debentures are issued and sold to
the Property Trustee in connection with the issuance of Trust
Securities by the Trust, the Trust shall have voluntarily or
involuntarily dissolved, wound-up its business or otherwise
terminated its existence except in connection with (i) the
distribution of the Debentures to holders of Trust Securities
in liquidation or redemption of their interests in the Trust,
(ii) the redemption of all or part of the outstanding Trust
Securities of the Trust or (iii) certain mergers,
consolidations or amalgamations of the Trust, each as
permitted by the Declaration of the Trust.
The foregoing Event of Default is intended solely for the benefit of
the Holders of the Debentures issued pursuant to this First Supplemental
Indenture and shall not be applicable to any other series of Securities
heretofore or hereafter issued pursuant to the Indenture.
22
SECTION 10.2. Limitations on Waivers and Consents.
(a) Notwithstanding anything to the contrary contained in Section 5.7
of the Indenture, if the Debentures are held by the Trust or by the Property
Trustee, a waiver of a past default or any modification to a waiver of a past
default shall not be effective until the holders of a majority in liquidation
amount of Trust Securities shall have consented to such waiver or modification;
provided, however, that if the consent of the Holder of each Outstanding
Debenture is required in connection with such waiver or modification, such
waiver or modification shall not be effective until each holder of the Trust
Securities shall have consented to such waiver or modification.
(b) Except for any supplemental indenture provided under Section 8.1 of
the Indenture and notwithstanding anything to the contrary contained in Section
3.8 of the Indenture, if the Debentures are held by the Trust or by the Property
Trustee, a supplemental indenture shall not be effective until the holders of a
majority in liquidation amount of Trust Securities shall have consented to such
supplemental indenture; provided, however, that if the consent of the Holder of
each Outstanding Debenture is required in connection with a supplemental
indenture, such supplemental indenture shall not be effective until each holder
of the Trust Securities shall have consented to such supplemental indenture.
SECTION 10.3. Acknowledgment of Rights.
The Issuer acknowledges that, with respect to any Debentures held
either by the Trust or by the Property Trustee, if the Property Trustee fails to
enforce its rights under the Indenture, this First Supplemental Indenture or the
Debentures as the Holder of the Debentures held as the assets of the Trust, any
record holder of Preferred Securities may institute legal proceedings directly
against the Issuer to enforce the Property Trustee's rights under the Indenture,
this First Supplemental Indenture or the Debentures without first instituting
any legal proceedings against such Property Trustee or any other person or
entity. Notwithstanding the foregoing, if an Event of Default under the
Declaration has occurred and is continuing and such event is attributable to the
failure of the Issuer to pay interest or principal on the Debentures on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the applicable redemption date), the Issuer acknowledges that a record holder
of Preferred Securities may institute a proceeding directly against the Issuer
for enforcement of payment to the record holder of the Preferred Securities of
the principal of or interest on the Debentures on or after the respective due
date specified in the Debentures, and the amount of payment will be based on the
holder's pro rata share of the amount due and owing on all the Preferred
Securities.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental Indenture, is
in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided.
SECTION 11.2. Trustee Not Responsible for Recitals.
The recitals contained herein and in the Debentures, except for the
Trustee's certificate of authentication, shall be taken as the statements of the
Issuer and not of the Trustee, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity
or sufficiency of this First Supplemental Indenture or of the Debentures.
SECTION 11.3. Governing Law.
This First Supplemental Indenture and each Debenture shall be deemed to
be a contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of said State, except as may
otherwise be required by mandatory provisions of law.
SECTION 11.4. Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this First
Supplemental Indenture or of the Debentures, but this First Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 11.5. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 11.6. Effect of Headings.
The Article and Section headings herein and the Table of Contents
hereto are for convenience only and shall not affect the construction hereof.
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24
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
CONSECO, INC.
By:/s/ XXXXXX X. XXXX
------------------
Name: Xxxxxx X. Xxxx
Title: Executive Vice President
FLEET NATIONAL BANK, as Trustee
By:/s/ XXXXXXX XXXXXXX
----------------------
Name:Xxxxxxx Xxxxxxx
Title:Vice President
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25
